Revising a time-driven ABC system, cost increases, and process changes Refer to the time-driven ABC analysis of
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(a) Suppose indirect labor costs have increased by 10% from the original setting but all other information remains the same. Determine the total time-driven activity-based costs assigned to each of the four products (flavors) after incorporating the 10% increase in indirect labor costs and prepare an income statement similar to that shown in Exhibit 5-5.
(b) Suppose that in addition to the change in part a, the unit time for scheduling a production run decreased from four hours per run to three hours per run. Determine the new total timedriven activity-based costs assigned to each of the four products (flavors) and prepare an income statement similar to that shown in Exhibit but also showing the total cost of unused capacity.
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Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young
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