Archive for the ‘Activity-Based Costing’ Category

Activity Based Costing Question No.5 (with answer)

A company manufactures two products, X and Y, using the same equipment and similar processes. Data for the production of these items in one period is shown below:

Data:

Quantity produced per period

X

Y

Material cost per unit

20,000

10,000

Direct labor hours per unit

$20

Machine hours [...]

December 5, 2009  Tags: Activity based costing questions, Activity based costing questions and answers  Posted in: Activity-Based Costing  No Comments

Activity Based System Question No 4 (with answer)

Question:
1(a) For below table, please fill up the following values
(i)   Overhead per cost driver unit
(ii)  Total Overhead per product per activity
(iii) Cost per item

Activity

Total Overheads

Total Cost driver units

Overhead per cost driver unit

Cost driver [...]

December 4, 2009  Tags: Activity based costing questions, Activity based costing questions and answers  Posted in: Activity-Based Costing  No Comments

What is The Bolton Consulting Group (BCG) Matrix And Explain The Different Stage Of BCG matrix ( Part 1)

The Bolton Consulting Group (BCG) matrix is a model which basically enables one to plan for strategies at each stage at which an individual product-market is perceived be in terms of market growth and the firm’s relative strength (market share).
Before going further, let’s look at the features of this BCG matrix.
The BCG matrix focuses on [...]

November 24, 2009  Tags: BCG matrix, BUSINESS STRATEGY, corporate strategy  Posted in: Activity-Based Costing, BUSINESS STRATEGY  No Comments

Answer To Management Accounting Question No:ABC2 on Activity Based Costing

Refer to Accounting Test Question No.ABC2
 

(a) Computation of the activity based overheads
Step 1: Compute cost per unit of cost driver
= Cost pool / cost driver volume

Activity

Cost pool (a)

Cost driver volume/yr (b)

Cost/unit of cost driver (a)/(b)

Purchasing

$75,000

1,500

$50/purchase order

Setting

$112,000

2,800

$40/batch

Materials handling

96,000

8,000

$12/movement

Inspection

$70,000

2,800

$25/batch

Machining

$150,000

50,000

$3/machine hour

Step 2: Compute the volume of cost drivers consumed by Product XX

Purchase orders (given) =25

Batches=15,000/100=150

Materials movement=150 batches [...]

November 23, 2007  Tags: Activity based costing questions and answers  Posted in: Activity-Based Costing  One Comment

Management Accounting Question ABC No2 On Activity Based Costing

Company XYZ has 6 standard products from stainless steel and brass.The company’s most popular product is Product XX.   
The following are Product XX’s data for next year budget:

Activity
Cost Driver
Cost driver volume/yr
Cost pool

Purchasing
Purchase orders
1,500
$75,000

Setting
Batches produced
 2,800
 $112,000

Materials handling

Materials movements

 8,000

 $96,000

Inspection

Batches produced

 2,800

 $70,000

Machining costs
Machine hours
 50,000
 $150,000

 

Purchase orders
25

Output
15,000 units

Production batch size
100 units

Materials movements per batch
6

Machine hours per unit
0.1

Required:
(a) Calculate the budgeted overhead costs using [...]

November 23, 2007  Tags: Activity based costing questions  Posted in: Activity-Based Costing  2 Comments

Answer To Accounting Test Question No. 1 On Activity Based Costing

Refer to Accounting Test Question No.1
 
(a) Computation of the activity based costs and profits for each contract.
Step 1: Compute cost per unit of cost driver
= Cost pool / cost driver volume

Activity

Cost pool (a)

Cost driver volume/yr [...]

November 23, 2007  Tags: Activity based costing questions  Posted in: Activity-Based Costing  2 Comments

Accounting Question No ABC1 On Activity-Based Costing

Company XYZ has 2 fixed price contract for 2 different customers.The company has enough capacity for both contracts but is uncertain whether they will be profitable.
Data as follows:

Customer

AAA

BBB

Component Type

A999

B999

Contract Value($)

$27,000

$100,000

Contract Quantity

1,000 unit

2,000 units

Material cost/unit

$15

$20

Moulding time/batch

5 hours

7.5 hours

Batch Size

100 units

50 units

Annual Budgeted overheads [...]

November 23, 2007  Tags: activity based costing, Activity based costing questions  Posted in: Activity-Based Costing  2 Comments


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