Unformatted text preview: ith prior costing system Costs per unit with act ivit ybased costing Job Order 410 10 $1,332.50 1,820.00 Job Order 411 200 $571.375 547.750 Job order 410 has an increase in reported unit cost of 36.6% [($1,820 – $1,332.50) ÷ $1,332.50], while jo b order 411 has a decrease in reported unit cost of 4.1% [($547.75 – $571.375) ÷ $571.375]. A co mmo n finding when act ivit ybased costing is implemented is that lowvo lume products have increases in their reported costs while highvo lume products have decreases in their reported cost. This result is also found in requirements 1 and 2 o f this problem. Costs such as materialshandling costs vary wit h the number of parts handled (a funct ion of batches and complexit y o f products) rather than with direct manufacturing laborhours, an outputunit leve l cost driver, which was the only cost driver in the previous jo bcosting system. The product cost figures co mputed in requirements 1 and 2 differ because a. the job orders differ in the way they use each of five activit y...
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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.
- Spring '10
- Cost Accounting