ACC349TeamA.P4-4A.parte.Week3teamassignment - off of output...

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Memorandum To: Tyler Silva From: Team A Date: June 22, 2011 Subject: Analysis of Cost As per your request, this memo will explain the difference of activity-based costing compared to traditional costing as cost differences per liter. Activity based accounting is a system that allocates the overhead costs in a way that follows the cost drivers to best follow expense reporting. In contrast, the traditional approach allocates costs
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Unformatted text preview: off of output of product. This way of reporting can misrepresent results by recording either too little or too much without considering the activity. By allocating more overhead to Cool Day, LiteMist would be $2.47 and CoolDay would be around $1.09. With activity based costing , LiteMist would be $3.43 and Cool Day $0.90. This would make both products give a higher profit....
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