What is the goal of using a predetermined overhead rate in allocating the manufacturing overhead costs to
Question:
What is the goal of using a predetermined overhead rate in allocating the manufacturing overhead costs to SUW products?
Why is there a need for Blue Bear Berhad to consider a transition from the current traditional costing method to activity-based costing?
Tanjiro believes Rafael's (the General Manager) priority on a profit proposition is misplaced. He believes it is more important to priorities quality over quantity in Blue Bear Berhad's products. In-line with Tanjiro's view, Mathan recommends to establish a Total Quality Management (TQM) process in SUW's Quality Control Department.
How will the implementation of Total Quality Management (TQM) be valuable?
One of the costs analysts has noted on how having improved product quality would reduce the need for inventories. The analysts suggest the use of just-in-time (JIT) inventory initiatives together with the Total Quality Management (TQM) process as a cost reduction measure.
(i) Is the analyst's opinion on TQM and improved product quality guaranteed? Why or why not?
(ii)Would the use of JIT be suitable for Blue Bear Berhad?
Expert Answer:
1 A predetermined overhead rate is calculated at the beginning of the accounting period It is calculated by dividing the estimated manufacturing overh... View the full answer
