Tiêu đề Costing Systems - Chapter 3 - Problem.pdf ✅

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ABC Company, a manufacturing organization, has raised concerns that its traditional cost system might be producing inaccurate or misleading cost information. Currently, the company applies its manufacturing overhead (MOH) based solely on machine hours. The company is now considering implementing an Activity-Based Costing (ABC) system to improve cost accuracy. For the upcoming year, the organization anticipates using 100,000 direct labor hours and 60,000 machine hours. The following information reflects the budgeted manufacturing overhead (MOH) for the year. Problem 2 Activity Cost Driver Budgeted Activity Budgeted Cost Material handling # of parts handled 12,000,000 $1,440,000 Machine Setup No. of setups 1500 630,000 Machining Machine hours 60,000 1,080,000 Quality control No. of batches 1000 450,000 Expected Total manufacturing overhead costs $3,600,000
The Costs, sales, and production data for one of the organization's products (ABC) for the coming year Prime Costs: Direct material cost $2.5 per unit (traceable) Direct labor cost S1.2 per unit (traceable). Total prime costs = $3.7 per unit Sales and production data for xyz: Expected production and sales 40,000 units 1Batch size 10,000 units (4 batches) Setups 2 per batch (8 setups) Total parts per finished unit 10 parts Machine hours needed 160 MH per batch (160M.H/10,000 units= 0.016 M.H/unit) Required: Compute O.H. costs applied (allocated) to each unit of ABC under 1- Traditional Costing System 2- ABC costing System