1. Why the activity based costing system is unacceptable for external financial report?

2. Explain how activity based costing differ from traditional product costing?

3. "The principal purpose of the cash budget is to see how much cash the company will have in the

bank at the end of the year." Do you agree? Explain.

5. The marketing department of Graber Corporation has submitted the following sales forecast for

the

upcoming fiscal year. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Budgeted unit sales . . . . . . . . 18,000 15,000 16,000 17,000

The selling price of the company's product is $22.00 per unit. Management expects to collect 70%

of sales in the quarter in which the sales are made, 25% in the following quarter, and 5% of sales

are expected to be uncollectible. The beginning balance of accounts receivable, all of which is

expected to be collected in the first quarter, is $66,000.

The company expects to start the first quarter with 3,200 units in finished goods inventory.

Management desires an ending finished goods inventory in each quarter equal to 20% of the next

quarter's budgeted sales. The desired ending finished goods inventory for the fourth quarter is 3,400

units.

Requirements:

i. Prepare the company's sales budget and schedule of expected cash collections.

ii. Prepare the company's production budget for the upcoming fiscal year.

4. Silicon Optics has supplied the following data for use in its activity-based costing system: Overhead Costs Taka Wages and salaries. . . . . . . . . . .. . . . 350.000 Other overhead costs . . . . . . . . . . 200,000 Total overhead costs . . . .. . 550.000 Activity Cost Pool Activity Measure Total Activity Direct labor support Number of direct labor hours 5,000 DLHs Order processing . . . Number of orders 400 orders Customer support Number of customers 100 customers Other . . . . . . . .. This is an organization-sustaining activity Not applicable Distribution of Resource Consumption Across Activities Direct Labor Order Customer Other Total Support Processing support Wages & salaries 35% 30% 20% 15% 100% Other overhead 30% 10% 40% 20% 100% costs During the year, Silicon Optics completed an order for a special optical switch for a new customer, Indus Telecom. This customer did not order any other products during the year. Data concerning that order follow: Data Concerning the Indus Telecom Order Selling price . . . . . . . . . Tk 395 per unit Units ordered 200 units Direct materials Tk 264 per unit Direct labor hour 0.5 DLH per unit Requirement: Direct labor rate Tk 25 per hour i. Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools. ii. Compute the activity rates for the activity cost pools. ili. Prepare a report showing the customer margin for Indus Telecom.6. Maxwell Company manufactures and sells a single product. The following costs were incurred during the company first year of operations: Variable Costs per unit: Direct Material Taka 28 Direct labor Variable manufacturing overhead 4 Variable selling and administrative 6 Fixed cost per year: Fixed manufacturing overhead Taka Fixed selling and administrative 160.000 exp 180.000 During the year the company produced 30,000 units and sold 28000 units. The selling price of the company's product is taka 90 per unit. Requirements: I. Compute the unit product cost and income statement for the year using a variable costing method. II. Reconcile the variable costing net income to absorption costing net income