Harris Systems has decided to adopt ABC costing. To remain competitive, Harris Systems management believes the company
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Harris Systems specializes in servers for workgroup, e-commerce, and ERP applications. The companys original job costing system has two direct cost categories: direct materials and direct labor. Overhead is allocated to jobs at the single rate of $ 22 per direct labor hour. A task force headed by Harriss CFO recently designed an ABC system with four activities. The ABC system retains the current systems two direct cost categories. Overhead costs are reflected in the four activities. Pertinent data follow:
Harris Systems has been awarded two new contracts, which will be produced as Job A and Job B. Budget data relating to the contracts follow:
Compute the assembling cost savings required per Job B-type server to meet the $ 5,400 target cost.
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Related Book For
Horngrens Financial and Managerial Accounting
ISBN: 978-0133255584
4th Edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura
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