managerial accounting 16th ed textbook solutions manual chapter 07
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managerial accounting 16th ed textbook solutions manual chapter 07
Chapter 7Activity-Based Costing: A Tool to Aid Decision MakingSolutions to Questions7-1 Activity-based costing differs from traditional costing system managerial accounting 16th ed textbook solutions manual chapter 07 ms in a number of ways. In activity-, based costing, non manufacturing as well as mặnufacturing costs may be assigned to products: And, some manufacturing costs—including the costs of idle capacity—may be. excluded from product costs. An activity-based costing system typically includes a number of a managerial accounting 16th ed textbook solutions manual chapter 07 ctivity cost pools, each of which has its unique measure of activity. These measures of activity often differ from the allocation bases used in traditmanagerial accounting 16th ed textbook solutions manual chapter 07
ional costing systems.7-2 When direct labor is used as an. allocation base for overhead, it, is implicitly assumed that oyerhead cost is directly propChapter 7Activity-Based Costing: A Tool to Aid Decision MakingSolutions to Questions7-1 Activity-based costing differs from traditional costing system managerial accounting 16th ed textbook solutions manual chapter 07 labor has declined in importance over the years while overhead has been increasing. This suggests that there is no longer a direct link between the level of direct labor and overhead. Indeed, when a company automates, direct labor is replaced by machines; a decrease in direct labor is accompanied b managerial accounting 16th ed textbook solutions manual chapter 07 y an increase in overhead. This violates the assumption that overhead cost is directly proportional to direct labor, pvẹrhệad cost appears to be drivemanagerial accounting 16th ed textbook solutions manual chapter 07
n by factors such as product diversity © The McGraw-Hill Companies, Inc.,and complexity as well as by volume, for which direct labor has served as a cChapter 7Activity-Based Costing: A Tool to Aid Decision MakingSolutions to Questions7-1 Activity-based costing differs from traditional costing system managerial accounting 16th ed textbook solutions manual chapter 07 gers alsộ have the authority to link ABC data to the, employee evaluation and reward system. Cross-functional employees are also important because they possess intimate knowledge of operations that is needed to design an effective ABC system Tapping, the knowledge of cross-functional employees also managerial accounting 16th ed textbook solutions manual chapter 07 lessens their resistance to ABC because they feel included in the implementation process.7-4 Unit-level activities are . perfprmed for each unit thatmanagerial accounting 16th ed textbook solutions manual chapter 07
is produced Batch-level activities are performed for each batch regardless of how many units are in the batch. Product-level activities must be carrieChapter 7Activity-Based Costing: A Tool to Aid Decision MakingSolutions to Questions7-1 Activity-based costing differs from traditional costing system managerial accounting 16th ed textbook solutions manual chapter 07 s regardless of what products or services they buy. Organizationsustaining activities are carried out regardless, of the company's precise product mix or mix of customers.2018. All rights reserved.Solutions Mani”1 7TStuDocu.comThis document IS available free of charge onDownloaded by Pham Quang Huy managerial accounting 16th ed textbook solutions manual chapter 07 (etxx>K4you oniine@gmaii com)7-5 Organization-sustaining costs, customer-level costs and the costs of idle capacity should not be assigned to productsmanagerial accounting 16th ed textbook solutions manual chapter 07
. These costs represent resources that are not consumed by the products.7-6 In activity-based costing, costs must first be allocated to activity cost Chapter 7Activity-Based Costing: A Tool to Aid Decision MakingSolutions to Questions7-1 Activity-based costing differs from traditional costing system managerial accounting 16th ed textbook solutions manual chapter 07 more than one activity, some wav must be found to estimate how much time they spend in each activity. The most practical approach is often to ask employees how they spend their time. It is also possible to ask people to keep records of how they spehd their time or observe them as they perform their managerial accounting 16th ed textbook solutions manual chapter 07 tasks, but both of these alternatives are costly and it is not obvious that the data would be any better. People who know they are being observed maymanagerial accounting 16th ed textbook solutions manual chapter 07
change how they behave.7-8 In traditional cost systems, product-level costs are indiscriminately spread across all products using direct labor-hours Chapter 7Activity-Based Costing: A Tool to Aid Decision MakingSolutions to Questions7-1 Activity-based costing differs from traditional costing system managerial accounting 16th ed textbook solutions manual chapter 07 le for 40% of the direct labdr in a factory it will be assigned 40% or the manufacturing overhead cost in the factory—including 40% of the product-level costs oflow-volume products. In an activity-based costing system, batch-level and product-level costs are assigned more appropriately. This results managerial accounting 16th ed textbook solutions manual chapter 07 in shifting product-level costs back to the products that cause them and away from, the high-volume products. (Ạ similar effect will be observed withmanagerial accounting 16th ed textbook solutions manual chapter 07
batchlevel costs if high-volume products are produced in larger batches than low-volume products.)7-9 Activity rates tell managers the average cost oChapter 7Activity-Based Costing: A Tool to Aid Decision MakingSolutions to Questions7-1 Activity-based costing differs from traditional costing system managerial accounting 16th ed textbook solutions manual chapter 07 date for process improvements. Benchmarking can be used to identify which activities have unusually large costs. If some other organization IS able.to carry put the activity at a significantly lower cost, it is reasonable to suppose that improvement may be possible.7-10 The activity-based costing ap managerial accounting 16th ed textbook solutions manual chapter 07 proach described jn the chapter is probably unacceptable for external financial reports for two reasons. First, actiyity-based product costs, as descrmanagerial accounting 16th ed textbook solutions manual chapter 07
ibed in this chapter, exclude some manufacturing costs and include some non manufacturing costs. Second, the first-stage allocations are based on inteChapter 7Activity-Based Costing: A Tool to Aid Decision MakingSolutions to Questions7-1 Activity-based costing differs from traditional costing system managerial accounting 16th ed textbook solutions manual chapter 07 ed by Pham Quang Huy (e(x»K4you oniine@gmaii com)© The McGraw-Hill Companies, Inc., 2018. All rights reserved.Solutions Mani”173StuDocu.comThis document is available free of charge onDownloaded by Pham Quang Huy iebooMyouChapter 7: Applying ExcelThe completed worksheet is shown below.© The McGraw-Hi managerial accounting 16th ed textbook solutions manual chapter 07 ll Companies, Inc., 2018. All rights reserved.Managerial Accounting, 16th EditionChapter 7Activity-Based Costing: A Tool to Aid Decision MakingSolutions to Questions7-1 Activity-based costing differs from traditional costing systemChapter 7Activity-Based Costing: A Tool to Aid Decision MakingSolutions to Questions7-1 Activity-based costing differs from traditional costing systemGọi ngay
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