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Volume Based Costing Pdf Download

 
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MessagePosté le: Ven 28 Oct - 16:51 (2016)    Sujet du message: Volume Based Costing Pdf Download Répondre en citant




Volume Based Costing Pdf Download > bit.ly/2eMPHMl

























































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The cost per product unit figures for product A and product B (second and fourth columns) are derived from the cost sums for each activity pool (first and third columns) divided by the number of product units produced and sold for each product (Table 2, line 1). ABC Stage-1 allocation (batch level allocation) for product A: Activity pools, cost drivers, cost per cost driver unit, and total cost for these activities. Indirect labor cost / direct labor cost proportion: = $1,422,500 / $1,500,000 = 0.948 = 94.8%. Budgeting and financial planning: Overhead / indirect costs and funding needs may be anticipated with greater accuracy and more certainty under ABC. Finding overhead costs per unit in ABC. The total product unit costs for each product correspond to the total indirect costs for each product from the traditional costing approach. Activity based costing approaches overhead costs essentially as direct costs, in that cost estimates reflect actual cost driver usage for each product. Direct labor costs used by each product. Note especially that the purpose of ABC is to provide management with information for decision support and planning. These can include, for example, the costfor person minutes or person hours per product unit for running production machines.

Whatisactivity based costing?. Activity based management: Moving beyond manufacturing. These operations are typically performed regularly and often, but not for each individual product unit. ABC based costing shows the reverse. This can be problematic, when management needs to know exactly which products are making money, and which are being sold at a loss. Product Profitability (Gross Profit Margin) Product A Product B Traditional cost allocation (Production volume based allocation) 42.5% 26.3% Activity based costing approach 26.1% 36.8% Table 7. Why do companies and organizations use activity based costing?. For the profitability figures shown in Table 7 above,the activity based costing results may be taken as the more accurate resultsmore closely reflecting the "true" production costs of products A and Bthan the profitability figures from the traditional costing approach. Direct materials costs[ = 1 * 4 ] $675,000 $1,050,000 $1,725,000 8. ABC costing for the same product A and product B begins with the same summary of units produced and sold, sales revenues, and direct costs from the traditional example, as shown again in another copy of Table 2:.

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