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    Activity Based Costing Notes

    Uploaded by

    Lovely

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd

    Activity Based Costing Notes

    Uploaded by

    Lovely
    9 views4 pages

    Original Title

    Activity based costing notes

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    © © All Rights Reserved

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    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    9 views4 pages

    Activity Based Costing Notes

    Uploaded by

    Lovely

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
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    123

    A B
    DM 10.00 20.00
    DL 20.00 30.00
    Units produce 8,000.00 2,000.00
    Machine hours 16,400.00 3,600.00
    Inspection hours 300.00 2,700.00
    Inspection cost P4,500,000

    Requirement 4,500,000.00
    Product X Product Y OH rate
    1 16,400.00 3,600.00 20,000.00 225.00
    2 300.00 2,700.00 3,000.00 1,500.00

    123
    3A TRADITIONAL A B
    DM 10.00 20.00
    DL 20.00 30.00
    to get this, 225 (which is the FO FOH 461.25 405.00
    TOTAL 491.25 455.00
    Units produce 8,000.00 2,000.00
    Machine hours 16,400.00 3,600.00
    Inspection hours 300.00 2,700.00
    Inspection cost P4,500,000

    3C A
    TRADITIONAL ABC PER UNIT COST
    TOTAL 491.25 86.25 405.00 OVERSTATED
    NET INCOME UNDERSTATED
    per machine hours
    per inspection hours for ABC

    3B AB A B
    DM 10.00 20.00
    DL 20.00 30.00
    FOH 56.25 2,025.00
    per unit cost TOTAL 86.25 2,075.00 per unit cost
    Units produce 8,000.00 2,000.00
    Machine hours 16,400.00 3,600.00
    Inspection hours 300.00 2,700.00
    Inspection cost P4,500,000

    B
    TRADITIONAL ABC PER UNIT COST
    TOTAL 455.00 2,075.00 (1,620.00) UNDERSTATED
    INCOME UNDERSTATED NET INCOME OVERSTATED
    Aguila Company

    1 1 2 total
    annual revenue 200,000 600,000 800,000
    proportion 0.25 0.75
    total factory OH 180,000 180,000
    allocation of OH 45,000 135,000

    2 1 2
    annual revenue 200,000 600,000 800,000
    annual salesperson salaries 30,000 45,000 75,000
    allocated OH 45,000 135,000
    income 125,000 420,000

    3 1 2 cost driver rate per driver


    miles driven 80,000 40,000 120,000
    number of customers 50 75 125
    travel 36,000 0.3
    entertainment 144,000 1,152

    allocated - travel 24,000 12,000


    allocated - entertainment 57,600 86,400
    total 81,600 98,400

    4 1 2 total
    annual revenue 200,000 600,000 800,000
    annual salesperson salaries 30,000 45,000 75,000
    allocated OH 81,600 98,400 180,000
    income 88,400 456,600 545,000
    1 2 total
    annual revenue 200,000 600,000 800,000
    annual salesperson salaries 30,000 45,000 75,000
    number of customers 50 75 125
    miles driven 80,000 40,000 120,000

    OH costs:
    1 2
    travel 36,000 miles driven
    entertainment 144,000 no. of customers
    administrative 150,000 salaries
    total 330,000
    rate per driver

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