Henriksen AS manufactures and sells packaging machines. It recently used an activity based approach to refine the

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Henriksen AS manufactures and sells packaging machines. It recently used an activity based approach to refine the job-costing system at its Vejle plant. The resulting job-costing system has one direct-cost category (direct materials) and four indirect manufacturing cost pools. These four indirect-cost pools and their allocation bases were chosen by a team of product designers, manufacturing personnel and marketing personnel:

Henriksen AS manufactures and sells packaging machines. It recently used

Required
1. Present overview diagrams of the prior job-costing system and the refined activity-based job-costing system.
2. Calculate the unit manufacturing costs (using ABC) of each machine and the total manufacturing cost of the Lange land job.
3. The activity-based job-costing system of Henriksen has only one manufacturing direct cost category: direct materials. A competitor of the Henriksen Company has two direct-cost categories at its manufacturing plant: direct materials and direct manufacturing labour. Why might Henriksen not have a direct manufacturing labour costs category in its job-costing system? Where are the manufacturing labour costs included in the Henriksen costing system?
4. What information might members of the team that refined the prior costing system find useful in the activity-based job-costing system?

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Management and Cost Accounting

ISBN: 978-1405888202

4th edition

Authors: Alnoor Bhimani, Charles T. Horngren, Srikant M. Datar, George Foster

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