Abc Costing (10 Edition)-2008
This document was uploaded by user and they confirmed that they have the permission to share it. If you are author or own the copyright of this book, please report to us by using this DMCA report form. Report DMCA
Overview
Download & View Abc Costing (10 Edition)-2008 as PDF for free.
More details
- Words: 924
- Pages: 7
1. First Stage of Allocation of cost to the activity cost pools: Particular Assembling Units Manufacturing overhead
Processing Cost
Other
175,000
25,000
50,000
500,000
30,000
135,000
75,000
60,000
300,000
280,000
310,000
100,000
110,000
800,000
2. Activity Rates for the Activity Cost Pools: Activity Cost Pools Processing Supporting Cost Customers
Assembling Units Total cost incurred in Activity Pool
280,000
310,000
100,000
Measurement of Activity
Nos. of units
Nos. of orders
Nos. of customers
Total activity in activity cost pool
1,000 units
250 orders
100 customers
ACTIVITY RATE
280
1,240
3. Total cost incured on Office Mart's Order: Activity Cost Pool Activity Rate Assembling Unit 280 per unit
Nos. of activity 80 cabnits
Processing Cost
1,240 per order
4 orders
Supporting custmer
1,000 per customer
01 Custmer
Product Margin on 80 filling cabnits: Sales
(80 units x Rs. 595)
Cost incurred: a) Direct Material b) Direct Labor c) Volume related overhead d) Order related overhead
Total
250,000
Selling and Administrative Overhead TOTAL COST
Activity Cost Pools Supporting Customers
(80 units x Rs. 180) (80 units x Rs. 50)
PRODUCT MARGIN Customer Margin: Product Margin Less: Customer support overhead CUSTOMER MARGIN
1,000
ABC Cost 22,400 4,960 1,000 28,360
47,600
14,400 4,000 22,400 4,960
(45,760) 1,840 1,840 (1,000) 840
Req no.1: Activity rate for the activity cost pools are: Particular Assembling Units Manufacturing overhead Selling and Administrative Overhead TOTAL COST
Processing Cost
Activity Cost Pools Supporting Customers
Total
250,000
175,000
25,000
50,000
500,000
30,000
135,000
75,000
60,000
300,000
280,000
310,000
100,000
110,000
800,000
Activity rate:
Assembling Units
Processing Cost
Supporting Customers
Total Activity Allocated rate Manufacturing overhead
1,000 units
250 orders
100 customers
Selling and Administrative Overhead TOTAL RATE
250
700
250
30 280
540 1,240
750 1,000
Required no.2: Overhead cost for the four orders of total of 80 filling cabinets of Office Mart: PRODUCT MARGIN Customer Margin Assembling Processing Supporting Units Cost Customers Total Activity during Office mart order
Other
80 units
4 orders
1 customer
Manufacturing overhead cost
20,000
2,800
250
Selling and Admin. Overhead cost
2,400 22,400
2,160 4,960
750 1,000
Required no. 3: ACTION ANALYSIS: PRODUCT MARGIN Sales Less: Green color cost Direct Material
Less: Yellow color cost: Direct labor Manufacturing overhead Assembling dept cost Processing cost Less: Red color cost: Selling and administrative overhead Assembling dept cost Processing cost
CUSTOMER MARGIN Sales Less: Green color cost Direct Material Less: Yellow color cost: Direct labor Manufacturing overhead Assembling dept cost Processing cost Supporting customer Less: Red color cost: Selling and administrative overhead Assembling dept cost Processing cost Supporting customer
(80 cabinets x Rs. 595)
(80 cabinets x Rs. 180) GREEN MARGIN
(80 cabinets xRs. 50) 20,000 2,800 YELLOW MARGIN
47,600
14,400
4,000
22,800
2,400 2,160 RED MARGIN
(80 cabinets xRs. 50) 20,000 2,800 250 YELLOW MARGIN
2,400 2,160 750 RED MARGIN
(26,800) 6,400
(4,560) 1,840
(80 cabinets x Rs. 595)
(80 cabinets x Rs. 180) GREEN MARGIN
(14,400) 33,200
47,600
14,400
(14,400) 33,200
4,000
23,050
(27,050) 6,150
(5,310) 840
Solution of Pb 8-6 of 10th edition. Activity Pools
Activity rate
Activity done
Total Cost
Order size
17.60 per direct150 labor hours hour
Customer order
360 per customer 01 order customer order
Product Testing
79 per testing hour 18 testing hours
1,422
Selling
1,494 per sales 3call sales calls
4,482
2,640 360
Total cost incured on Hard Rock drill's8,904 order
Solution of Pb 8-7 of 10th edition
Particulars Order Size
Total activity done for the order
150 hours
01 customer order 150
Manufacturing: Indirect labor Factory Depreciation Factory Utilities Factory Administration General Selling and Administrative: Wages and Salaries Depreciation Taxes and Insurance Selling expenses
Activity Pools Customer Product Order Testing
Total Selling
18 testing 3 sales hours calls 1 18 3
1,440 1,050 30 -
231 46
648 324 18 432
36
2,319 1,374 48 514
120 2,640
72 11 360
1,422
2,895 108 147 1,296 4,482
3,087 119 147 1,296 8,904
Prob 8-8 Total Cost assigned to order: Activity Cost Pools
Activity Rate
Nos. of Activity
ABC Cost
Volume
12 per direct labor 1,920 direct labor hours
Batch Processing
96 per batch
Order Processing
284 per order 01 order
4 batches
384 284
Customer Services
2620 per customer 01 customer Total cost assigned Total Direct Labor hours: Nos. of units produced
23,040
2,620 26,328
2,400
Time allocated for one unit
0.80
Total Direct Labor hours
1,920
Required no. 1: Profitability of the order PRODUCT MARGIN Sales Less: Cost:
(2,400 units x Rs. 137.95)
Direct Material Direct Labor Volume Batch processing Order Processing
(2,400 units x Rs. 112) (2,400 units x Rs. 14.4)
331,080
268,800 34,560 23,040 384 284
TOTAL COST PRODUCT MARGIN CUSTOMER MARGIN Product Margin
4,012
(327,068) 4,012
Less: Customer services cost CUSTOMER MARGIN
(2,620) 1,392
ex-8-9
Particulars
Volume
Batch Processing
Order Processing
Activity
1920 D/L hours 4 Batchers 01 order 1,920 4
Customer Services
Total
01 customer 1
1
Production Overhead: Indirect Labor Factory equipment depreciation Factory administration
3,456 14,112 4,032
288 13 28
18 28
268
3,762 14,125 4,356
960
52 3 384
153 6 79 284
1,864 26 462 2,620
3,029 35 1,021 26,328
General Selling & Admin. Overhead: Wages & Salaries Depreciation Marketing Expenses Total Cost
480 23,040
ACTION ANALYSIS - CUSTOMER MARGIN Sales Less: Green Cost Direct material
(2,400 units x 137.95)
331,080.00
(2,400 units x 112)
(268,800.00)
GREEN MARGIN Less: Yellow cost Direct Labor Indirect Labor Marketing Expenses
(2,400 units x 14.40)
62,280.00
34,560.00 3,762.00 1,021.00
YELLOW MARGIN Less: Red Cost Factory equipment depreciation Factory administration Selling and admin wages & salaries Selling and admin depreciation
14,125.00 4,356.00 3,029.00 35.00 RED MARGIN
(39,343.00) 22,937.00
(21,545.00) 1,392.00
Processing Cost
Other
175,000
25,000
50,000
500,000
30,000
135,000
75,000
60,000
300,000
280,000
310,000
100,000
110,000
800,000
2. Activity Rates for the Activity Cost Pools: Activity Cost Pools Processing Supporting Cost Customers
Assembling Units Total cost incurred in Activity Pool
280,000
310,000
100,000
Measurement of Activity
Nos. of units
Nos. of orders
Nos. of customers
Total activity in activity cost pool
1,000 units
250 orders
100 customers
ACTIVITY RATE
280
1,240
3. Total cost incured on Office Mart's Order: Activity Cost Pool Activity Rate Assembling Unit 280 per unit
Nos. of activity 80 cabnits
Processing Cost
1,240 per order
4 orders
Supporting custmer
1,000 per customer
01 Custmer
Product Margin on 80 filling cabnits: Sales
(80 units x Rs. 595)
Cost incurred: a) Direct Material b) Direct Labor c) Volume related overhead d) Order related overhead
Total
250,000
Selling and Administrative Overhead TOTAL COST
Activity Cost Pools Supporting Customers
(80 units x Rs. 180) (80 units x Rs. 50)
PRODUCT MARGIN Customer Margin: Product Margin Less: Customer support overhead CUSTOMER MARGIN
1,000
ABC Cost 22,400 4,960 1,000 28,360
47,600
14,400 4,000 22,400 4,960
(45,760) 1,840 1,840 (1,000) 840
Req no.1: Activity rate for the activity cost pools are: Particular Assembling Units Manufacturing overhead Selling and Administrative Overhead TOTAL COST
Processing Cost
Activity Cost Pools Supporting Customers
Total
250,000
175,000
25,000
50,000
500,000
30,000
135,000
75,000
60,000
300,000
280,000
310,000
100,000
110,000
800,000
Activity rate:
Assembling Units
Processing Cost
Supporting Customers
Total Activity Allocated rate Manufacturing overhead
1,000 units
250 orders
100 customers
Selling and Administrative Overhead TOTAL RATE
250
700
250
30 280
540 1,240
750 1,000
Required no.2: Overhead cost for the four orders of total of 80 filling cabinets of Office Mart: PRODUCT MARGIN Customer Margin Assembling Processing Supporting Units Cost Customers Total Activity during Office mart order
Other
80 units
4 orders
1 customer
Manufacturing overhead cost
20,000
2,800
250
Selling and Admin. Overhead cost
2,400 22,400
2,160 4,960
750 1,000
Required no. 3: ACTION ANALYSIS: PRODUCT MARGIN Sales Less: Green color cost Direct Material
Less: Yellow color cost: Direct labor Manufacturing overhead Assembling dept cost Processing cost Less: Red color cost: Selling and administrative overhead Assembling dept cost Processing cost
CUSTOMER MARGIN Sales Less: Green color cost Direct Material Less: Yellow color cost: Direct labor Manufacturing overhead Assembling dept cost Processing cost Supporting customer Less: Red color cost: Selling and administrative overhead Assembling dept cost Processing cost Supporting customer
(80 cabinets x Rs. 595)
(80 cabinets x Rs. 180) GREEN MARGIN
(80 cabinets xRs. 50) 20,000 2,800 YELLOW MARGIN
47,600
14,400
4,000
22,800
2,400 2,160 RED MARGIN
(80 cabinets xRs. 50) 20,000 2,800 250 YELLOW MARGIN
2,400 2,160 750 RED MARGIN
(26,800) 6,400
(4,560) 1,840
(80 cabinets x Rs. 595)
(80 cabinets x Rs. 180) GREEN MARGIN
(14,400) 33,200
47,600
14,400
(14,400) 33,200
4,000
23,050
(27,050) 6,150
(5,310) 840
Solution of Pb 8-6 of 10th edition. Activity Pools
Activity rate
Activity done
Total Cost
Order size
17.60 per direct150 labor hours hour
Customer order
360 per customer 01 order customer order
Product Testing
79 per testing hour 18 testing hours
1,422
Selling
1,494 per sales 3call sales calls
4,482
2,640 360
Total cost incured on Hard Rock drill's8,904 order
Solution of Pb 8-7 of 10th edition
Particulars Order Size
Total activity done for the order
150 hours
01 customer order 150
Manufacturing: Indirect labor Factory Depreciation Factory Utilities Factory Administration General Selling and Administrative: Wages and Salaries Depreciation Taxes and Insurance Selling expenses
Activity Pools Customer Product Order Testing
Total Selling
18 testing 3 sales hours calls 1 18 3
1,440 1,050 30 -
231 46
648 324 18 432
36
2,319 1,374 48 514
120 2,640
72 11 360
1,422
2,895 108 147 1,296 4,482
3,087 119 147 1,296 8,904
Prob 8-8 Total Cost assigned to order: Activity Cost Pools
Activity Rate
Nos. of Activity
ABC Cost
Volume
12 per direct labor 1,920 direct labor hours
Batch Processing
96 per batch
Order Processing
284 per order 01 order
4 batches
384 284
Customer Services
2620 per customer 01 customer Total cost assigned Total Direct Labor hours: Nos. of units produced
23,040
2,620 26,328
2,400
Time allocated for one unit
0.80
Total Direct Labor hours
1,920
Required no. 1: Profitability of the order PRODUCT MARGIN Sales Less: Cost:
(2,400 units x Rs. 137.95)
Direct Material Direct Labor Volume Batch processing Order Processing
(2,400 units x Rs. 112) (2,400 units x Rs. 14.4)
331,080
268,800 34,560 23,040 384 284
TOTAL COST PRODUCT MARGIN CUSTOMER MARGIN Product Margin
4,012
(327,068) 4,012
Less: Customer services cost CUSTOMER MARGIN
(2,620) 1,392
ex-8-9
Particulars
Volume
Batch Processing
Order Processing
Activity
1920 D/L hours 4 Batchers 01 order 1,920 4
Customer Services
Total
01 customer 1
1
Production Overhead: Indirect Labor Factory equipment depreciation Factory administration
3,456 14,112 4,032
288 13 28
18 28
268
3,762 14,125 4,356
960
52 3 384
153 6 79 284
1,864 26 462 2,620
3,029 35 1,021 26,328
General Selling & Admin. Overhead: Wages & Salaries Depreciation Marketing Expenses Total Cost
480 23,040
ACTION ANALYSIS - CUSTOMER MARGIN Sales Less: Green Cost Direct material
(2,400 units x 137.95)
331,080.00
(2,400 units x 112)
(268,800.00)
GREEN MARGIN Less: Yellow cost Direct Labor Indirect Labor Marketing Expenses
(2,400 units x 14.40)
62,280.00
34,560.00 3,762.00 1,021.00
YELLOW MARGIN Less: Red Cost Factory equipment depreciation Factory administration Selling and admin wages & salaries Selling and admin depreciation
14,125.00 4,356.00 3,029.00 35.00 RED MARGIN
(39,343.00) 22,937.00
(21,545.00) 1,392.00
Related Documents
Abc Costing
May 2020 7
Abc Costing (10 Edition)-2008
June 2020 3
Abc Costing System (cost Accounting)
June 2020 9
Unit Cost Under Abc Costing Method
May 2020 23
Costing
December 2019 40
Costing
November 2019 42More Documents from ""
Divisional Profit Measurement (collin)-examples
June 2020 6
Flexible Budget Examples( Chapter 18)
June 2020 6
Cost Volume Profit Analysis -cvp Exmaples
June 2020 7
Capital Budgeting Examples
June 2020 9
Process Costing Examples (matz Uzry)
June 2020 10