Question

Name: ________________________________________ How does Activity Based Costing differ from the traditional overhead allocation system? _______________________________________________________________________________________________________________________

Name: ________________________________________

How does Activity Based Costing differ from the traditional overhead allocation system?

__________________________________________________________________________________________________________________________________________________________________________

Quality Management:

Type of Quality Cost

Voluntary or Failure?

Type?

Downtime

Reliability testing

Warranty

Product design

Training costs

Scrap

Customer relations

Inventory inspection

Downtime

Re-inspection

Repair and rework

Identify 3 products that would use Job order costing:

(1)_____________________________________________

(2) _____________________________________________

(3)_____________________________________________

Identify 3 products that would use process costing:

1)_____________________________________________

(2) _____________________________________________

(3)_____________________________________________

Homework Answers

Answer #1

How does Activity Based Costing differ from the traditional overhead allocation system?

Regarding Overhead cost allocation and mainly large Manuafcaturing organization , Activity Based Costing (ABC) is more accurate and perfect measure to derived Overhead cost rather than Traditional overhead cost allocation .

Definitely Acitivity Based costing system is expensive but this ABC system will provide accurate number , Profitability about the Company. It gives more accurate cost of each product With hep of this costing system , it is easy to identify which process and cost , overhead cost creating issue in generating Profitability .

More accutate information , cost allocation , details profitability , perfect way of overhead allocation – ABC system is the best . The method expand expand the number of indirect cost pool that can be allocated to specific products . Under traditional method , consider ONLY one pool of a company total overhead cost to allocate

Ans relates to Job order

Job order costing followed by – Printing Company, Aircraft and Construction . Under this costing method three basic head would be – Direct material , direct labour , and Factory Overhead

Identify 3 products that would use process costing:

Sprots drink Manufacturer - Coca Cola company is using Process costing

Shampoo Manufacturer - Unilever used process base costing

Bag mabufacture

Reliability testing – Voluntary cost- This test conduct to verify whether product meet Reliable product quality or Not

Warranty – Failure cost – This cost incurred or mainly relates after product shipped and delivered to the customer

Product design – Voluntary cost – Thie cost mainly relates to Research and Development phase cost

Training cost – Volutary cost - Training is essential to prevent any failure

Scrap – Internal Failure cost

Customer relation – Failure cost – This are mainly relates to after the product is delivered and its come under “ Failure cost “

Inventory Inspection – Voluntary cost – This is basically treated as “ prevention cost . Inventory inspection is most import cost measurement

Downtime – fall under Failure cost – This cost incurred before final delivery of the product

Repair and work – falling under “ Failure cost” Repair , reqork are internal cost and done before final delivery of goods

Re Inspection cost – Voluntary cost-

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Free Manufacturing Company (FMC) is based in San Diego California. FMC wants to determine the cost...
Free Manufacturing Company (FMC) is based in San Diego California. FMC wants to determine the cost of quality for the products manufactured. Using the provided data, complete the Cost of Quality (COQ) Report by answering the following question Costs Allocation Rate Quantity of Costs Allocation Base Customer Support 60 per hour 10,000 hours Design Engineering 100 per hour 5,000 hours Inspection (manufacturing) 50 per hour 40,000 hours Process Engineering 80 per hour 6,000 hours Rework 100 per hour 10,000 hours...
Activity-Based Supplier Costing Levy Inc. manufactures tractors for agricultural usage. Levy purchases the engines needed for...
Activity-Based Supplier Costing Levy Inc. manufactures tractors for agricultural usage. Levy purchases the engines needed for its tractors from two sources: Johnson Engines and Watson Company. The Johnson engine has a price of $1,000. The Watson engine is $900 per unit. Levy produces and sells 22,000 tractors. Of the 22,000 engines needed for the tractors, 4,000 are purchased from Johnson Engines, and 18,000 are purchased from Watson Company. The production manager, Jamie Murray, prefers the Johnson engine. However, Jan Booth,...
An example of an Appraisal Quality cost is: A. rework costs B. reliability testing C. promotion...
An example of an Appraisal Quality cost is: A. rework costs B. reliability testing C. promotion and awards to employee D. warranty repairs and replacement costs E. None of the above When considering whether to accept a special one-time order at a discounted price, in additional to making a quantitative analysis (analyzing costs and revenue implications), a qualitative (nonfinancial) analysis should also be made to consider the impact on: A. the practicality of your product B. your irrelevant costs C....
Value-Added and Non-Value-Added Costs, Unused Capacity For Situations 1 through 6, provide the following information: An...
Value-Added and Non-Value-Added Costs, Unused Capacity For Situations 1 through 6, provide the following information: An estimate of the non-value-added cost caused by each activity. If required, round your final answer to the nearest dollar. The root causes of the activity cost (such as plant layout, process design, and product design). The appropriate cost reduction measure: activity elimination, activity reduction, activity sharing, or activity selection. Choose " Multiple" in the Root cause column, wherever there is more than one root...
Urban Elite Cosmetics has used a traditional cost accounting system to apply quality-control costs uniformly to...
Urban Elite Cosmetics has used a traditional cost accounting system to apply quality-control costs uniformly to all products at a rate of 18 percent of direct-labor cost. Monthly direct-labor cost for Satin Sheen makeup is $111,000. In an attempt to more equitably distribute quality-control costs, management is considering activity-based costing. The monthly data shown in the following chart have been gathered for Satin Sheen makeup. Activity Cost Pool Cost Driver Pool Rates Quantity of Driver for Satin Sheen Incoming material...
Fine Clothing Company produces Jackets from leather, fabric, and synthetic materials in a single production department....
Fine Clothing Company produces Jackets from leather, fabric, and synthetic materials in a single production department. The basic product is a standard jacket made from leather and lined with fabric. Fine Clothing has a good reputation in the market because the standard jacket is a high-quality item that has been produced for many years. Last year, the company decided to expand its product line and produce specialty jackets for special orders. These jackets differ from the standard in that they...
Fine Clothing Company produces Jackets from leather, fabric, and synthetic materials in a single production department....
Fine Clothing Company produces Jackets from leather, fabric, and synthetic materials in a single production department. The basic product is a standard jacket made from leather and lined with fabric. Fine Clothing has a good reputation in the market because the standard jacket is a high-quality item that has been produced for many years. Last year, the company decided to expand its product line and produce specialty jackets for special orders. These jackets differ from the standard in that they...
*** Please show excel formulas, thanks *** Babaloo leather company produces briefcases from leather, fabric, and...
*** Please show excel formulas, thanks *** Babaloo leather company produces briefcases from leather, fabric, and synthetic materials in a single production department. The basic product is a standard briefcase made from leather and lined with fabric. Babaloo has a good reputation in the market because the standard briefcase is a high-quality item that has been produced for many years. Last year, the company decided to expand its product line and produce specialty briefcases for special orders. These briefcases differ...
Case Abstract: Company ABC, an AE, constructor and construction management firm, recently assigned Bob Ironside to...
Case Abstract: Company ABC, an AE, constructor and construction management firm, recently assigned Bob Ironside to turn a major coal fired generating station project around. Currently at 36 percent construction completion, the project is shifting from an emphasis on civil and structural work to bulk production. Cooperation of the owner, the multi-prime contractors, and strong labor unions is cach vital for performance improvement. The analysis of this project involves: 1) identification of significant external influences on the project organization, 2)...
PRODUCTION PLANNING AT VIKTOR LENAC SHIPYARD Professor Giorgio Sinković and Professor David M. Currie prepared this...
PRODUCTION PLANNING AT VIKTOR LENAC SHIPYARD Professor Giorgio Sinković and Professor David M. Currie prepared this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction...