Carl's Car Wash recently changed to the activity-based costing (ABC) approach to more accurately allocate overhead...
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Carl's Car Wash recently changed to the activity-based costing (ABC) approach to more accurately allocate overhead costs. 1. List three activities (other than the example activity shown below) that the car wash could identify in applying the ABC approach. (3 points) Example: Washing cars 2. For each activity you identified in question #1, list one cost driver. (3 points) 3. The office manager at Carl's Car Wash proposes that the car wash allocating more overhead costs for luxury car washes compared to cash washes for non-luxury vehicles. (a) Should the car wash adopt the office manager's proposal? Why or why not? Explain. (5 points) (b) If the office manager's suggestion results in higher pricing for luxury cash washes, compared to other car washes for non-luxury vehicles, is the office manager's proposal ethical? Why or why not? Explain. (4 points) Carl's Car Wash recently changed to the activity-based costing (ABC) approach to more accurately allocate overhead costs. 1. List three activities (other than the example activity shown below) that the car wash could identify in applying the ABC approach. (3 points) Example: Washing cars 2. For each activity you identified in question #1, list one cost driver. (3 points) 3. The office manager at Carl's Car Wash proposes that the car wash allocating more overhead costs for luxury car washes compared to cash washes for non-luxury vehicles. (a) Should the car wash adopt the office manager's proposal? Why or why not? Explain. (5 points) (b) If the office manager's suggestion results in higher pricing for luxury cash washes, compared to other car washes for non-luxury vehicles, is the office manager's proposal ethical? Why or why not? Explain. (4 points)
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1 Activities a Cleaning and vacuuming interior of vehicles b Cleaning and polishing exterior of vehi... View the full answer
Related Book For
Managerial Accounting A Focus on Ethical Decision Making
ISBN: 978-0324663853
5th edition
Authors: Steve Jackson, Roby Sawyers, Greg Jenkins
Posted Date:
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