Final Practice with Solutions

A company produces three products that use the same manufacturing facilities. The details of the selling price and costs of each product are as follows:

Step 3: From the calculation above, the management consider that 16 557 unit of demand/production is the break-even point for the whole three processes. Compare the fix cost and the variables cost three processes between Metal Drawing Process, Outsourcing and Plastic

The selection of the right cost calculation method is of critical importance when it comes to determining the real product profitability. Activity Based Costing is one approach that can be used. Activity based costing is a managerial accounting system that determines the cost of activities without distortion and provides management with relevant and timely information (Dunn, 2009). This paper will briefly summarize Colombo’s competitive environment and General Mills strategy in response to that environment, using the ABC analysis, Team A will determine new segment

The cost system in place at Superior Manufacturing did not allow them to see enough of the indirect costs associated with each product. The inability to determine actual costs incurred by each product line inhibits Superior Manufacturing from reporting accurate information. A main example of this is displayed with the indirect expenses associated with each product building. The reports that the management used in the cost system referenced their standard costs, which were based on the previous year prices. If any of the direct costs were actually lower than the standards listed it resulted in higher revenues. A few suggestions that I would recommend to Waters regarding the cost accounting system and reports would to also look at more of the actual sales and expenses in reports. The cost system that is being utilized focuses mainly on past results.

Activity Based Costing (ABC) is more relevant than traditional costing in companies, where product mix is diverse in; batch sizes, physical sizes, degree or complexity, and raw material characteristics. ABC will also provide more decision useful information for the service industry, characterized by diversity in range of services provided. If the products in a plant or services provided posses similar characteristics, wither volume based or an activity based cost driver will provide reasonably accurate costs. The strategic goal of ABC is to provide decision useful cost and profitability information for optimal pricing decisions, appropriate product mix, and

2. Yes. Slopes has a budgeted cash balance of $69,650 on 10/1/2012 and so it will be in a

One of the recommendations on the type of costing approach that should be employed that will help the Humble Patisseries Bhd to determine more accurate cost information for their pricing and product decisions is Activity-Based Costing approach. Activity-based costing is an approach to apportion costs in view of the measure of a product or service consumes. The application of Activity-based costing is mainly imperative to businesses that give customized products or services. A tailored production condition requires ABC's allotment of definite indirect expenses to a product to recognize its actual cost. ABC activities are employed for almost 20 years in which many companies in a array of sectors have executed activity based thinking.

Accounting to determine which items or jobs are generating the most net income can be extremely important to financial managers in today’s economy. Managers must determine which products are making performing the best so that they can capitalize on profits. This also helps to know when it should cut its losses. There are three very useful methods of identifying costs associated to a particular item which are job order costing, activity based costing (ABC), process costing. Job order costing isolates costs to a particular job. ABC compares multiple items which are manufactured. Process costing assesses items which are massed produced and provides analysis to the cost through the various stages from beginning to completion. This essay will explain each of these methods and then provide examples for each of them.

|Costs per attendee (total costs[pic]number|  | $20.00 |$12.50 | $10.00 |$ 8.75 |$ 8.00 |$ 7.50 |

I think that following option A is most suitable because its cost can maximise the profit margin needed for the company in order to be a success.

Many organisations have different products and services that they provide to their customers and it can be extremely difficult to disperse costs between them. Some may prefer to distribute variable costs evenly within cost objects or some may prefer to distribute costs per unit or batch taking into consideration other factors such as machine or labour hours. There are two main systems used; traditional costing and activity based costing (ABC). Included in this essay will be the definitions and comparisons of the two costing systems as well as how activity based costing can lead to higher profits. An example of a company will be given to see if adopting the ABC system can lead to an increase in profits and will then finish with a

Its strategy consists of two parts: promoting organic cotton and improving conventional cotton growing. The company increase its use of organic cotton every year. Garments made with 100 percent organic cotton can be found in all department, including children’s clothing. Those product have special label.

* The income statements prepared under absorption costing and variable costing usually produce different net operating income figures. Under absorption costing if inventories increase then some of the fixed manufacturing costs of the current period will not appear on the income statement as part of cost of goods sold. Instead, these costs are deferred to a future period and are carried on the balance sheet as part of the inventory account. Such a deferral of cost is known as fixed manufacturing overhead deferred in inventory, as the accountant said that the July production was well below standard volume because of employee vacations this caused overhead to be under

There were no opening stocks of raw materials, WIP or finished goods. It should be assumed that there are no direct materials variance for the

Selling expenses were budgeted on a "fixed" or "appropriation" basis. Each October, the accounting department sent to the branch managers and to other managers who were in charge of selling departments a detailed record of the actual expenses of their department for the preceding year and for the current year- to- date.