{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

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

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
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
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

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]...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern