Ch4 ABC

Ch4 ABC - $300,000 = Total Estimated OHD /$150,000...

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Ch4 Activity-Based Costing Monday, February 07, 2011 9:38 AM ASSUME: a company has a 100% markup on cost Sales = $400,000, what is cost? $$ % Sales $400,000 200% -Cost $200,000 100% Markup(Gross Profit) 100% ASSUME: a company has a 50% markup on sales Sales = $400,000, what is cost? $$ % Sales $400,000 100% -Cost $200,000 50% Markup(GP) 50% ASSUME: a company has a 60% markup on cost Sales = $320,000, what is cost? $$ % Sales $320,000 160% -Cost $200,000 100% Markup(GP) 60% ASSUME: a company has a 40% markup on sales Cost = $400,000, what is sales? $$ % Sales $666,667 100% -Cost $400,000 60% Markup (GP) 40% ABC- Activity Based Costing (Multiple Cost Drivers) Traditional (Ch 2.) - one cost driver Cost driver= a factor of activity that has a direct cause and effect relationship with resources consumed Example - Exercise 4-1 a.Traditional
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Unformatted text preview: $300,000 = Total Estimated OHD /$150,000 /Estimated DL Costs [Std - $50,000; Custom - $100,000] 2(DL Costs) = Application Rate 200% of DL Costs a.Machining costs = $200,000 Machine hours [Std- 1000, Custom - 1000] Machine set-up costs - $100,000 Set-up hours [Std- 100, Custom - 400] Machining $200,000 2000 Machine Hours = $100/machine hour Set Up $100,000 500 Set Up Hours = $200/set up hour Traditional STD CUSTOM STD: $50,000 (200%) = $100,000 Custom: $100,000 (200%) = $200,000 ABC STD Custom Machining Costs: Standard 1000 x $100 = $100000 Custom 1000 x $100 = $100000 Set Up Costs: Standard 100 x $200 = $20,000 Custom 400 x $200 = $80,000 $120,000 $180,000 Standard - Underpriced Custom - Overpriced The percentage is 100% for the word following "on" [bolded words]...
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This note was uploaded on 02/27/2012 for the course BUSI 101 taught by Professor Skender during the Spring '08 term at UNC.

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Ch4 ABC - $300,000 = Total Estimated OHD /$150,000...

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