Reference no: EM13788008
The following information was provided by a client to you regarding Activity Based Costing (ABC). The client is very happy that you have just taken ACCT& 203 at TCC and that you have a thorough understanding of ABC Costing. Check ALL that apply below to show the client the advantages of ABC Costing:
ABC Costing cannot be used for internal reporting as it is incompatible with accounting standards
ABC Costing shows creditors and investors the true cost or margin of a product as it ignores idle capacity and organization sustaining activities.
Management is usually resistant to the use of ABC Costing
ABC Costing prevents cross-subsidizing of products
ABC Costing ignores total overhead in its calculation as this represents idle capacity and organization sustaining activities
ABC Costing is mostly useful when a company produces few different products that consume resources homogeneously
ABC Costing cannot be used for external reporting.
ABC Costing can be very time consuming
ABC Costing does not allocate idle capacity to products.
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Production on the basis of direct labor costs
: Deltan Corp. allocates overhead to production on the basis of direct labor costs. If Deltan's total estimated overhead is $705,000 and estimated direct labor cost is $307,500, determine the amount of overhead to be allocated to finished goods invento..
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Preparing a cash budget
: Northern Company is preparing a cash budget for June. The company has $15,000 cash at the beginning of June and anticipates $39,000 in cash receipts and $45,000 in cash disbursements during June. Northern Company has an agreement with its bank to mai..
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Beginning cash balance-payments on merchandise purchases
: Use the following information to prepare the July cash budget for Acco Co. It should show expected cash receipts and cash disbursements for the month and the cash balance expected on July 31. Payments on merchandise purchases: 60% in the month of pur..
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Current portion of mortgage payable
: The monthly payment on a 1,000,000 15 yr. mortgage at 6% is 8,438.57 per month. How much of that 1,000,000 on day 1 is deemed to be "current portion of mortgage payable"?
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Regarding activity based costing
: The following information was provided by a client to you regarding Activity Based Costing (ABC). The client is very happy that you have just taken ACCT& 203 at TCC and that you have a thorough understanding of ABC Costing. Check ALL that apply below..
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Under the new revenue recognition principle ifrs
: On January 1, 2014, Gordon Co. enters into a contract to sell a customer a wiring base and shelving unit that sits on the base in exchange or $3,000. The contract requires delivery of the base first but states that payment for the base will not be ma..
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Compute the current break-even sales
: Currently, the unit selling price of a product is $390, the unit variable cost is $320, and the total fixed costs are $1,008,000. A proposal is being evaluated to increase the unit selling price to $440. Compute the current break-even sales
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Target costing
: Oregon Equipment Company wants to develop a new log-splitting machine for rural homeowners. Market research has determined that the company could sell 5,000 log-splitting machines per year at a retail price of $700 each. An independent catalog compan..
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Product pricing-two products
: Quality Data manufactures two products, CDs and DVDs, both on the same assembly lines and packaged 10 disks per pack. The predicted sales are 400,000 packs of CDs and 500,000 packs of DVDs. What price should Quality Data charge for each disk pack if ..
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