Company XYZ has 6 standard products from stainless steel and brass. The company's most popular product...
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Company XYZ has 6 standard products from stainless steel and brass. The company's most popular product is Product XX The following are Product XX's data for next year budget: Activity Cost Driver Cost driver Cost volume/yr pool Purchasing Purchase orders 1,500 $75,000 Batches $112,000 Setting 2,800 produced Materials Materials $96,000 8,000 handling movements Batches $70,000 Inspection 2,800 produced Machining costs $150,000 Machine hours 50,000 Purchase orders 25 Output 15,000 units Production batch size 100 units Materials movements per batch Machine hours per unit 0.1 Required: (a) Calculate the budgeted overhead costs using activity based costing principles (b) Calculate the budgeted overhead costs using absorption costing (absorb overhead using machine hours) (c) How can the company reduce the ABC for Product XX Company XYZ has 6 standard products from stainless steel and brass. The company's most popular product is Product XX The following are Product XX's data for next year budget: Activity Cost Driver Cost driver Cost volume/yr pool Purchasing Purchase orders 1,500 $75,000 Batches $112,000 Setting 2,800 produced Materials Materials $96,000 8,000 handling movements Batches $70,000 Inspection 2,800 produced Machining costs $150,000 Machine hours 50,000 Purchase orders 25 Output 15,000 units Production batch size 100 units Materials movements per batch Machine hours per unit 0.1 Required: (a) Calculate the budgeted overhead costs using activity based costing principles (b) Calculate the budgeted overhead costs using absorption costing (absorb overhead using machine hours) (c) How can the company reduce the ABC for Product XX
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Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
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