costacctg13_sm_ch05

4 informat ion fro m the abc system can also help

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Unformatted text preview: anufacturing co mpanies, where the outputs are obvious because they are tangible and measurable, the outputs of service organizat ions are more difficult to measure. Examples are “cured” patients as dist inguished from “processed” or “discharged” pat ients, “educated” as dist inguished fro m “partially educated” students, and so on. 5-41 5­37 (25 min.) Unused capacity, activity­based costing, activity­based management. 1. Number of batches Machine­hours Basketballs 300 11,000 Volleyballs 400 12,500 Total 700 23,500 Setup cost per batch = $143,500 ÷ 700 batches = $205 per batch. Equipment and maintenance = $109,900 ÷ 23,500 machine­hours = $4.6766 per machine­hour. Lease rent, insurance, utilit ies = $216,000 ÷ 12,000 sq. ft. of capacit y = $18 per sq. ft. Capacity Capacity used for 2. Unused capacity = Total capacity - basketball used for v olleyball production production = 12, 000 - 3, 360 - 5, 040 = 3, 600 sq. ft. Cost of unused capacit y = $18 per sq. ft × 3,600 sq. ft. = $64,80...
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This note was uploaded on 10/11/2010 for the course ACCT 321 taught by Professor Cole during the Spring '10 term at University of Miami.

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