Cost management systems have three primary purposes. Two of these are providing information for strategic and operational purposes. Companies often adopt ABC systems to increase the accuracy of cost information used by managers for strategic and operational decisions. Suppose a company produces only one product. This means that 100% of its costs are direct with respect to the product cost object. The accurate product unit cost is simply all costs incurred divided by the total units produced. Might this company be interested in an ABC system? Why or why not?
Answer to relevant QuestionsSuppose that AT&T used benchmarking to compare the activity-based costs among its various divisions. As part of its benchmarking efforts, AT&T compared the activity cost per driver unit for similar activities and cost per ...A part of the activity analysis conducted at the Maple Lake branch of Buffalo State Savings Bank (BSSB) was identifying potential cost drivers for each major activity. The following cost drivers were chosen because they were ...Dover High Fashions Company manufactured and sold 1,000 leather handbags during July. Selected data for this month follow:Sales .............. $130,000Direct materials used ......... 35,000Direct labor ............ ...The wireless phone manufacturing division of a consumer electronics company uses activity-based costing. For simplicity, assume that its accountants have identified only the following three activities and related cost ...Northwest Desserts, Inc., (NDI) produces a variety of premium cheesecakes and sells them in individual packages directly to retail customers and in packages of 10 cakes to restaurants in Washington, Oregon, Idaho, and ...
Post your question