Ch7_-_CD_Solutions (2) - MGTB03 Chapter 7 Solutions to...

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MGTB03 Chapter 7 – Solutions to Class Discussion Questions 7.21 Identifying Costs Using the ABC Cost Hierarchies – Steam Whistle Brewing Following are the CMA answers to this question. However, one could argue that some of the unit-level costs could instead be categorized as batch-level. A. Facility-level costs: Manufacturing facility $1,500,000 B. Product-sustaining costs: Product development $1,250,000 C. Batch-level costs: Production setup $700,000 D. Unit-level costs: Materials handling $ 850,000 Production line labour 2,500,000 Power 500,000 Total unit-level costs $3,850,000 7.24 Traditional Versus ABC Costing - Kalder Products A. Total engineering change cost (6*$300) $1,800 Total allocated cost for AJ40 (1*1,000/(1*1,000 + 1.5*1,000)*(6*300) 720 Remainder is allocated to AJ60 $1,080 B. Total engineering change cost (6*$300) $1,800 Total allocated cost for AJ40 (4*$300) 1,200 Remainder is allocated to AJ60 $ 600 C. Comparison of costs allocated under the two systems: AJ40 AJ60
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Ch7_-_CD_Solutions (2) - MGTB03 Chapter 7 Solutions to...

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