Accounting Assignment 2 Solutions

Accounting Assignment 2 Solutions - Assignment #2 SUGGESTED...

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Page 1 Assignment #2 SUGGESTED Solution Question #1 a) Handler time – Show – 25 horses x 8 hours = 200 hours – Movie- 8 horses x (8 hours + 2 extra hours) x 2 days = 160 hours Total = 200 + 160 = 360 hours Total costs = $29,758/360 = 82.66 per handler hour Show = 200 hours x 82.66 = $16,532 Movie =160 hours x 82.66 = $13,226 b) One rate does not take into account the: Differing rates of pay for the handlers Handler hours have no relationship to many of the costs incurred. Too many variables to rest with only one driver Contains facility sustaining costs that do not aid in costing out individual products or events. Ignores cause and effect concept, what is the driver It will distort their understanding of costs and lead to poor business decisions It will “over-cost” any event using more handlers It will “under-cost” any event that uses unusually low amount of handling There are six cost categories, they should logically seek out more than one driver; for example, how related are the handler hours to horse food costs? c) & d) SHOW MOVIE HANDLERS 25 handlers x 8hrs x $20/hr X 1 day = $4,000 8 handlers x 10hrs*** x $35/hr X 2 days = $5,600 *** 8 hours + 2 hours “extra hours…calming…” GROOMERS 5 groomers* x $500 = $2,500 *5 required to groom 25 horses
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Accounting Assignment 2 Solutions - Assignment #2 SUGGESTED...

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