Homework Answers
Solution for the Requirement asked in the Question as per below Images
Requirement 3:
Comment on Cost differences between two systems:
1) Cost per Kilograms of Chips for institutional market as per Existing system is € 1.13 whereas cost as per refined system is € 0.62
2) Refined Method uses Activity Based costing system for allocation of Indirect cost. Activity based costing system assign costs to activities rather than products or services. Activity based costing system is the most appropriate method for allocation of Indirect cost.
3) Under the refined costing system cost per Kilogram of Chips is low as compared to existing System So McCarthy can bid for Low price and take better decisions
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Intermediate level *11.11 ABC, product-cost cross-subsidisation (30 minutes) McCarthy Potatoes processes potatoes into chips at its...
*11.12 ABC, activity area cost driver rates (continuation of Exercise 11.11) (30 minutes) Exercise 11.11 reports...
*11.12 ABC, activity area cost driver rates (continuation of Exercise 11.11) (30 minutes) Exercise 11.11 reports ABC data for the three activity areas (cleaning, cutting and packaging) on a per output unit basis (per kilogram of chips). This format emphasises product costing. An alternative approach that emphasises the costs of individual processes (activities) is to identify (a) the costs at each activity area, and (b) the rate per unit of the cost driver at each activity area. The following information...
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Idaho Potatoes (IP) grows and processes potatoes in its one plant. It sells potatoes to two markets...
Idaho Potatoes (IP) grows and processes potatoes in its one
plant. It sells potatoes to two markets – retail and
institutional. The following information is available
after a recent year-end:
Retail
Institutional
Total
Pounds of Potatoes
900,000
100,000
1,000,000
Direct Material Cost
$135,000
$15,000
$150,000
Production Support
$983,000
IP currently allocates production support on the basis of
pounds of potatoes.
IP recently made a bid to supply 25,000 pounds of potatoes to a
college. It wants to add a profit of 20% of...
Idaho Potatoes (IP) grows and processes potatoes in its one plant. It sells potatoes to two...
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Exercise 4-10 (Video) (Part Level Submission) Kragan Clothing Company manufactures its own designed and labeled athletic...
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Direct labor or machine hours may not be the appropriate cost driver for overhead in all...
Direct labor or machine hours may not be the appropriate cost
driver for overhead in all areas of manufacturing due to the
complexities of many manufacturing processes. Many companies use
activity-based costing (ABC) which uses multiple drivers (items
that consume resources) rather than just one driver to apply
overhead to their activities. With ABC, a company can use a cost
driver that has a direct cause/effect relationship in its applied
overhead costs.
Waterways looked into ABC as a method of...
*11.12 ABC, activity area cost driver rates (continuation of Exercise 11.11) (30 minutes) Exercise 11.11 reports ABC data for the three activity areas (cleaning, cutting and packaging) on a per output unit basis (per kilogram of chips). This format emphasises product costing. An alternative approach that emphasises the costs of individual processes (activities) is to identify (a) the costs at each activity area, and (b) the rate per unit of the cost driver at each activity area. The following information...
Idaho Potatoes (IP) grows and processes potatoes in its one
plant. It sells potatoes to two markets – retail and
institutional. The following information is available
after a recent year-end:
Retail
Institutional
Total
Pounds of Potatoes
900,000
100,000
1,000,000
Direct Material Cost
$135,000
$15,000
$150,000
Production Support
$983,000
IP currently allocates production support on the basis of
pounds of potatoes.
IP recently made a bid to supply 25,000 pounds of potatoes to a
college. It wants to add a profit of 20% of...
Idaho Potatoes (IP) grows and processes potatoes in its one plant. It sells potatoes to two markets - retail and institutional. The following information is available after a recent year-end: Retail 900,000 Institutional 100,000 Total 1,000,000 $135,000 $15,000 $150,000 Pounds of Potatoes Direct Material Cost Production Support $983,000 IP currently allocates production support on the basis of pounds of potatoes. IP recently made a bid to supply 25,000 pounds of potatoes to a college. It wants to add a profit...
Exercise 4-10 (Video) (Part Level Submission) Kragan Clothing Company manufactures its own designed and labeled athletic wear and sells its products through catalog sales and retail outlets. While Kragan has for years used activity-based costing in its manufacturing activities, it has always used traditional costing in assigning its selling costs to its product lines. Selling costs have traditionally been assigned to Kragan's product lines at a rate of 70% of direct materials costs. Its direct materials costs for the month...
overhead sing onal costing and ABC 3 AP E17.10 Kragan Clothing Company manufactures its own designed and labeled athletic wear and sells its products through catalog sales and retail outlets. While Kragan has for years used activity-based costing in its manufacturing activities, it has always used traditional costing in assigning its selline costs to its product lines. Selling costs have traditionally been assigned to Kragan's product lines at a rate of 70% of direct materials costs. Its direct materials costs...
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Direct labor or machine hours may not be the appropriate cost driver for overhead in all areas of manufacturing due to the complexities of many manufacturing processes. Many companies use activity-based costing (ABC) which uses multiple drivers (items that consume resources) rather than just one driver to apply overhead to their activities. With ABC, a company can use a cost driver that has a direct cause/effect relationship in its applied overhead costs. Waterways looked into ABC as a method of...
Direct labor or machine hours may not be the appropriate cost
driver for overhead in all areas of manufacturing due to the
complexities of many manufacturing processes. Many companies use
activity-based costing (ABC) which uses multiple drivers (items
that consume resources) rather than just one driver to apply
overhead to their activities. With ABC, a company can use a cost
driver that has a direct cause/effect relationship in its applied
overhead costs.
Waterways looked into ABC as a method of...
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