This document discusses traditional costing systems and activity-based costing (ABC). Traditional systems allocate overhead based on a single rate like direct labor hours, which can over- or under-cost complex products. ABC allocates overhead using multiple cost drivers like direct labor hours, machine hours, and purchase orders. It provides a more accurate allocation of overhead to products. The document provides an example comparing traditional and ABC allocation for two products, Widget A and B, showing ABC results in a more accurate costing. ABC is more appropriate when products differ significantly in volume and complexity.
This document discusses traditional costing systems and activity-based costing (ABC). Traditional systems allocate overhead based on a single rate like direct labor hours, which can over- or under-cost complex products. ABC allocates overhead using multiple cost drivers like direct labor hours, machine hours, and purchase orders. It calculates overhead rates for each activity cost pool and allocates costs to products based on their usage of each activity. ABC provides a more accurate allocation of overhead costs than traditional methods when production is complex.
This document discusses traditional costing systems and activity-based costing (ABC). Traditional costing systems allocate overhead using a single rate, such as direct labor hours, which can over- or under-cost complex products. ABC allocates overhead using multiple cost drivers that better reflect resource usage. The document provides an example comparing traditional and ABC costing for two products. ABC costing allocated overhead more accurately without leftover/missing costs. ABC is recommended when products and processes are complex or diverse. It can also be used for activity-based management to reduce non-value adding activities.
A presentation on Activity Based Costing.pptxSimmiAgrawal8
Activity based costing (ABC) is an approach that allocates overhead costs to products based on their use of resources or cost drivers. Traditional costing systems often allocate overhead based on a single driver like direct labor hours, which can result in under or overcosting complex products. ABC identifies multiple cost drivers like machine hours, labor hours, and purchase orders. It assigns costs to these "activity pools" and then allocates the pool costs to products based on their consumption of each activity. This provides a more accurate allocation of overhead costs than traditional methods.
This document provides an overview of activity-based costing (ABC) and how it differs from traditional costing systems. ABC assigns overhead costs to products based on their use of activities and cost drivers, rather than simple allocation bases like direct labor hours. This leads to more accurate product costs. The document outlines the steps in ABC, including identifying cost drivers, creating activity cost pools, calculating activity rates, and allocating costs to products. An example is provided to demonstrate how ABC can allocate overhead differently than traditional methods. ABC is more appropriate when products differ in complexity or overhead costs are significant.
cost accounting chapter 6, fundamentals of product and service designBeaDelaPenia1
This document discusses job-order costing systems used by manufacturing firms that produce unique products in small batches. It explains the key aspects of setting up a job-order costing system including cost accumulation, measurement, and assignment. Costs like direct materials, direct labor, and applied overhead are traced to individual jobs and accumulated on job cost sheets. The chapter compares using a single overhead rate versus multiple rates and how they impact cost assignment.
- Traditional costing systems allocate overhead based on a single rate like direct labor hours, which can result in inaccurate product costs.
- Activity-based costing (ABC) assigns costs to products based on their use of activities like machine setups, quality inspections, etc. rather than a single rate.
- The example of Bilson Company shows that ABC results in more accurate product costs for Product A and B compared to traditional costing, with A's costs increasing and B's decreasing. This better informs management decisions.
Cost and Management Accounting I Chapter 3 (2)(2)-1 (1).pptxObsaKamil
This document discusses cost allocation, which is the process of assigning indirect costs to cost objects like products or services using an allocation base. It provides definitions for key terms like cost object, cost pool, and cost driver. It also outlines the steps in the cost allocation process, including planning, application, recording, and reconciliation. Finally, it compares traditional cost allocation using a single overhead rate to activity-based costing, which uses multiple cost pools and drivers.
This document discusses job costing, including its definition, purpose, characteristics, applicability, differences from process costing, basic terminology, the seven steps of job costing, related journal entries, and an example problem involving actual, normal, and variance costing for a job. Job costing involves collecting and assigning costs to identifiable jobs or orders, and is used when production involves made-to-order or custom goods of short duration. It helps with planning, cost control, and decision making.
This document discusses traditional costing systems and activity-based costing (ABC). Traditional systems allocate overhead based on a single rate like direct labor hours, which can over- or under-cost complex products. ABC allocates overhead using multiple cost drivers like direct labor hours, machine hours, and purchase orders. It calculates overhead rates for each activity cost pool and allocates costs to products based on their usage of each activity. ABC provides a more accurate allocation of overhead costs than traditional methods when production is complex.
This document discusses traditional costing systems and activity-based costing (ABC). Traditional costing systems allocate overhead using a single rate, such as direct labor hours, which can over- or under-cost complex products. ABC allocates overhead using multiple cost drivers that better reflect resource usage. The document provides an example comparing traditional and ABC costing for two products. ABC costing allocated overhead more accurately without leftover/missing costs. ABC is recommended when products and processes are complex or diverse. It can also be used for activity-based management to reduce non-value adding activities.
A presentation on Activity Based Costing.pptxSimmiAgrawal8
Activity based costing (ABC) is an approach that allocates overhead costs to products based on their use of resources or cost drivers. Traditional costing systems often allocate overhead based on a single driver like direct labor hours, which can result in under or overcosting complex products. ABC identifies multiple cost drivers like machine hours, labor hours, and purchase orders. It assigns costs to these "activity pools" and then allocates the pool costs to products based on their consumption of each activity. This provides a more accurate allocation of overhead costs than traditional methods.
This document provides an overview of activity-based costing (ABC) and how it differs from traditional costing systems. ABC assigns overhead costs to products based on their use of activities and cost drivers, rather than simple allocation bases like direct labor hours. This leads to more accurate product costs. The document outlines the steps in ABC, including identifying cost drivers, creating activity cost pools, calculating activity rates, and allocating costs to products. An example is provided to demonstrate how ABC can allocate overhead differently than traditional methods. ABC is more appropriate when products differ in complexity or overhead costs are significant.
cost accounting chapter 6, fundamentals of product and service designBeaDelaPenia1
This document discusses job-order costing systems used by manufacturing firms that produce unique products in small batches. It explains the key aspects of setting up a job-order costing system including cost accumulation, measurement, and assignment. Costs like direct materials, direct labor, and applied overhead are traced to individual jobs and accumulated on job cost sheets. The chapter compares using a single overhead rate versus multiple rates and how they impact cost assignment.
- Traditional costing systems allocate overhead based on a single rate like direct labor hours, which can result in inaccurate product costs.
- Activity-based costing (ABC) assigns costs to products based on their use of activities like machine setups, quality inspections, etc. rather than a single rate.
- The example of Bilson Company shows that ABC results in more accurate product costs for Product A and B compared to traditional costing, with A's costs increasing and B's decreasing. This better informs management decisions.
Cost and Management Accounting I Chapter 3 (2)(2)-1 (1).pptxObsaKamil
This document discusses cost allocation, which is the process of assigning indirect costs to cost objects like products or services using an allocation base. It provides definitions for key terms like cost object, cost pool, and cost driver. It also outlines the steps in the cost allocation process, including planning, application, recording, and reconciliation. Finally, it compares traditional cost allocation using a single overhead rate to activity-based costing, which uses multiple cost pools and drivers.
This document discusses job costing, including its definition, purpose, characteristics, applicability, differences from process costing, basic terminology, the seven steps of job costing, related journal entries, and an example problem involving actual, normal, and variance costing for a job. Job costing involves collecting and assigning costs to identifiable jobs or orders, and is used when production involves made-to-order or custom goods of short duration. It helps with planning, cost control, and decision making.
Activity based costing is considered to be useful only for Manufacturing Organizations whereas reality is that it is equally usefull to Service providers
The document discusses job costing and batch costing. It defines job costing as a method where cost is compiled for specific jobs or work orders, rather than for stock. Cost is charged directly to jobs for materials, labor, and expenses. Overhead is apportioned to jobs based on department rates. Batch costing determines cost per unit by dividing total batch costs by the number of units in a batch. The document also discusses determining economic batch quantity to minimize setup and carrying costs, and provides examples of job and batch costing applications.
This document provides an overview of activity-based costing (ABC). It discusses the limitations of traditional costing systems and the need for ABC. It describes ABC as focusing on identifying activities associated with making products and linking resource costs to activities and products. The document outlines the key steps in an ABC system: 1) tracing costs to activities, 2) selecting cost drivers, and 3) tracing costs from activities to products. It also provides an example comparing product costs and profits under traditional and ABC systems.
This document discusses job costing, which is a costing system where the cost object is a distinct unit or job. It may use different amounts of resources than other jobs. The document outlines the key concepts of job costing, including actual and normal costing approaches, tracking costs through journal entries, and adjusting for over- or under-applied manufacturing overhead at year-end using different methods. It provides examples to illustrate job costing calculations and journal entries.
This document provides an overview of cost accounting concepts including:
- The differences between cost accounting and standard accounting, with cost accounting providing more detailed product and department-level cost information.
- The two main approaches to cost accounting: job costing and process costing.
- Key cost accounting definitions including direct costs, overhead costs, variances, and flexible budgets.
- How to analyze costs and volume relationships to understand profitability impacts.
- Methods for implementing cost accounting systems and overcoming resistance to change.
This document provides information about unit costing and cost sheets. It defines key costing terms like unit cost, prime cost, factory cost, office cost, selling and distribution cost, and total cost. It explains the objectives and components of a cost sheet, including a sample proforma cost sheet. Examples are provided to demonstrate how to calculate costs from raw material consumption, work in progress, finished goods, and to prepare a full cost sheet. The treatment of scrap and various cost control techniques are also summarized.
01.Understand the concept of ‘Overheads’.
02.Understand classification, allocation, apportionment and absorption of overheads.
03. Understand the Primary and Secondary Distribution of Overheads.
04. Understand the Traditional & Activity Based Costing methods
05. Identify the value added & non value added activity
Process costing is used to assign costs to units produced in continuous production and calculates equivalent units of production to account for incomplete units, while job order costing tracks costs for individual jobs or orders; process costing uses weighted average or FIFO methods to calculate equivalent units, with the difference being whether beginning inventory is combined or separated from current production; a company may use a hybrid costing system to apply aspects of both job order and process costing to different product lines or processes within the company.
1) Activity-based costing (ABC) is a cost accounting method that allocates overhead costs to products and services based on their actual consumption of resources instead of traditional methods that use less accurate cost drivers.
2) Target costing is a process that sets a target cost for a product by subtracting the desired profit margin from an estimated selling price and then works to reduce costs to meet the target.
3) Life-cycle costing tracks and accumulates all costs associated with a product or service over its entire lifetime from design through disposal to determine total profitability.
Job order costing is used by companies that produce custom or batch products. Key documents include bills of materials, time tickets, and cost sheets to accumulate costs for each job. Manufacturing overhead is applied using a predetermined overhead rate based on budgeted overhead costs and activity, such as direct labor hours. This ensures accurate overhead assignment to individual products. Variances may occur between actual and applied overhead costs.
In this 30-minute session, you will learn:
1) ERP’s role in capturing manufacturing costs
2) The different methods used to track manufacturing costs
3) How overhead is calculated in total cost
This document provides information about job order costing and process costing systems. It defines job order costing as a system that separately accumulates costs for each unique job, while process costing collects costs by department for mass produced homogeneous items. The key differences are that job order costing tracks heterogeneous jobs individually, while process costing tracks homogeneous production on a departmental basis. The document also includes examples of journal entries, a job order cost sheet, and a process costing production report with calculations.
Cost is the measurement of resources expended to obtain an object or complete an activity, usually expressed in monetary terms. There are different types of costs including product and period costs, variable and fixed costs, direct and indirect costs. Costs are also classified by their purpose such as differential costs and sunk costs. Manufacturing overhead costs from a shared facility can be allocated to products using different allocation bases like units produced, direct labor hours, or machine hours.
1) The document discusses various product costing models including unit-level, functional-based, and activity-based costing.
2) It provides examples of how overhead costs are assigned to products using plantwide or departmental predetermined overhead rates under unit-level costing.
3) Under activity-based costing, it describes the design steps which include identifying activities, assigning resource costs to activities, assigning activity costs to cost objects, and calculating activity rates to determine unit costs.
1) The document discusses various product costing models including unit-level, functional-based, and activity-based costing.
2) It provides examples of how overhead costs are assigned to products using plantwide or departmental predetermined overhead rates under unit-level costing.
3) Under activity-based costing, it describes the design steps which include identifying activities, assigning resource costs to activities, assigning activity costs to cost objects, and calculating activity rates to determine unit costs.
This document discusses activity-based costing and its advantages over traditional costing methods. It covers key concepts such as tracing overhead costs to activities and products using cost drivers, calculating activity and product unit costs, and addressing issues like product cost distortions that can occur when products consume overhead activities in different proportions. The document provides examples of calculating predetermined overhead rates and variances, and assigning costs using multiple cost drivers and activity rates. It explains how activity-based costing can provide more accurate product costing than traditional methods.
- The document discusses key aspects of job-order costing, including tracking the flow of costs through raw materials, work in process, finished goods, and cost of goods sold accounts.
- It explains how to record transactions like purchasing raw materials, applying labor costs, applying manufacturing overhead, and transferring completed jobs to finished goods inventory.
- Journal entries are provided as examples to record these transactions and show the flow of costs through a job-order costing system.
This document provides the questions and answers to the ACC 349 Final Exam from July 2016. It includes 50 multiple choice questions covering topics like job order costing, absorption costing, activity-based costing, budgeting, and decision making. The document encourages students to purchase the answers to the exam questions.
This document provides the questions and answers to the ACC 349 Final Exam from July 2016. It includes 50 multiple choice questions covering topics like job order costing, absorption costing, variable costing, budgeting, standard costs, and decision making. The document provides a full solution key for studying for or cheating on the ACC 349 Final Exam.
Activity based costing is considered to be useful only for Manufacturing Organizations whereas reality is that it is equally usefull to Service providers
The document discusses job costing and batch costing. It defines job costing as a method where cost is compiled for specific jobs or work orders, rather than for stock. Cost is charged directly to jobs for materials, labor, and expenses. Overhead is apportioned to jobs based on department rates. Batch costing determines cost per unit by dividing total batch costs by the number of units in a batch. The document also discusses determining economic batch quantity to minimize setup and carrying costs, and provides examples of job and batch costing applications.
This document provides an overview of activity-based costing (ABC). It discusses the limitations of traditional costing systems and the need for ABC. It describes ABC as focusing on identifying activities associated with making products and linking resource costs to activities and products. The document outlines the key steps in an ABC system: 1) tracing costs to activities, 2) selecting cost drivers, and 3) tracing costs from activities to products. It also provides an example comparing product costs and profits under traditional and ABC systems.
This document discusses job costing, which is a costing system where the cost object is a distinct unit or job. It may use different amounts of resources than other jobs. The document outlines the key concepts of job costing, including actual and normal costing approaches, tracking costs through journal entries, and adjusting for over- or under-applied manufacturing overhead at year-end using different methods. It provides examples to illustrate job costing calculations and journal entries.
This document provides an overview of cost accounting concepts including:
- The differences between cost accounting and standard accounting, with cost accounting providing more detailed product and department-level cost information.
- The two main approaches to cost accounting: job costing and process costing.
- Key cost accounting definitions including direct costs, overhead costs, variances, and flexible budgets.
- How to analyze costs and volume relationships to understand profitability impacts.
- Methods for implementing cost accounting systems and overcoming resistance to change.
This document provides information about unit costing and cost sheets. It defines key costing terms like unit cost, prime cost, factory cost, office cost, selling and distribution cost, and total cost. It explains the objectives and components of a cost sheet, including a sample proforma cost sheet. Examples are provided to demonstrate how to calculate costs from raw material consumption, work in progress, finished goods, and to prepare a full cost sheet. The treatment of scrap and various cost control techniques are also summarized.
01.Understand the concept of ‘Overheads’.
02.Understand classification, allocation, apportionment and absorption of overheads.
03. Understand the Primary and Secondary Distribution of Overheads.
04. Understand the Traditional & Activity Based Costing methods
05. Identify the value added & non value added activity
Process costing is used to assign costs to units produced in continuous production and calculates equivalent units of production to account for incomplete units, while job order costing tracks costs for individual jobs or orders; process costing uses weighted average or FIFO methods to calculate equivalent units, with the difference being whether beginning inventory is combined or separated from current production; a company may use a hybrid costing system to apply aspects of both job order and process costing to different product lines or processes within the company.
1) Activity-based costing (ABC) is a cost accounting method that allocates overhead costs to products and services based on their actual consumption of resources instead of traditional methods that use less accurate cost drivers.
2) Target costing is a process that sets a target cost for a product by subtracting the desired profit margin from an estimated selling price and then works to reduce costs to meet the target.
3) Life-cycle costing tracks and accumulates all costs associated with a product or service over its entire lifetime from design through disposal to determine total profitability.
Job order costing is used by companies that produce custom or batch products. Key documents include bills of materials, time tickets, and cost sheets to accumulate costs for each job. Manufacturing overhead is applied using a predetermined overhead rate based on budgeted overhead costs and activity, such as direct labor hours. This ensures accurate overhead assignment to individual products. Variances may occur between actual and applied overhead costs.
In this 30-minute session, you will learn:
1) ERP’s role in capturing manufacturing costs
2) The different methods used to track manufacturing costs
3) How overhead is calculated in total cost
This document provides information about job order costing and process costing systems. It defines job order costing as a system that separately accumulates costs for each unique job, while process costing collects costs by department for mass produced homogeneous items. The key differences are that job order costing tracks heterogeneous jobs individually, while process costing tracks homogeneous production on a departmental basis. The document also includes examples of journal entries, a job order cost sheet, and a process costing production report with calculations.
Cost is the measurement of resources expended to obtain an object or complete an activity, usually expressed in monetary terms. There are different types of costs including product and period costs, variable and fixed costs, direct and indirect costs. Costs are also classified by their purpose such as differential costs and sunk costs. Manufacturing overhead costs from a shared facility can be allocated to products using different allocation bases like units produced, direct labor hours, or machine hours.
1) The document discusses various product costing models including unit-level, functional-based, and activity-based costing.
2) It provides examples of how overhead costs are assigned to products using plantwide or departmental predetermined overhead rates under unit-level costing.
3) Under activity-based costing, it describes the design steps which include identifying activities, assigning resource costs to activities, assigning activity costs to cost objects, and calculating activity rates to determine unit costs.
1) The document discusses various product costing models including unit-level, functional-based, and activity-based costing.
2) It provides examples of how overhead costs are assigned to products using plantwide or departmental predetermined overhead rates under unit-level costing.
3) Under activity-based costing, it describes the design steps which include identifying activities, assigning resource costs to activities, assigning activity costs to cost objects, and calculating activity rates to determine unit costs.
This document discusses activity-based costing and its advantages over traditional costing methods. It covers key concepts such as tracing overhead costs to activities and products using cost drivers, calculating activity and product unit costs, and addressing issues like product cost distortions that can occur when products consume overhead activities in different proportions. The document provides examples of calculating predetermined overhead rates and variances, and assigning costs using multiple cost drivers and activity rates. It explains how activity-based costing can provide more accurate product costing than traditional methods.
- The document discusses key aspects of job-order costing, including tracking the flow of costs through raw materials, work in process, finished goods, and cost of goods sold accounts.
- It explains how to record transactions like purchasing raw materials, applying labor costs, applying manufacturing overhead, and transferring completed jobs to finished goods inventory.
- Journal entries are provided as examples to record these transactions and show the flow of costs through a job-order costing system.
This document provides the questions and answers to the ACC 349 Final Exam from July 2016. It includes 50 multiple choice questions covering topics like job order costing, absorption costing, activity-based costing, budgeting, and decision making. The document encourages students to purchase the answers to the exam questions.
This document provides the questions and answers to the ACC 349 Final Exam from July 2016. It includes 50 multiple choice questions covering topics like job order costing, absorption costing, variable costing, budgeting, standard costs, and decision making. The document provides a full solution key for studying for or cheating on the ACC 349 Final Exam.
(2)AMR Presentation on 29-30 Decemer Pheak 281222 2.pptxLayTekchhay2
1) The report analyzed AMR surveillance data from January to October 2020 from five sentinel sites that sent bacterial isolates to the NPHL for identification and antibiotic susceptibility testing confirmation.
2) The identification confirmation results were 100% correct across all sites, while some AST discrepancies were identified, particularly for Streptococcus pneumoniae, Klebsiella pneumoniae, and Escherichia coli.
3)Notable findings included the detection of ESBL-producing E. coli and K. pneumoniae isolates and MRSA-positive Staphylococcus aureus isolates.
The document discusses Chinese animal signs for 2023, highlighting challenging, opportunistic, and neutral signs. The Rabbit is identified as the "Grand Duke" or most influential sign of 2023. Challenging signs to watch out for are the Rooster, which may clash with opportunities, the Dragon which could bring negative emotions, and the Horse which may cause sudden changes. Signs of opportunity include the Dog, which combines harmoniously, and the Pig and Goat which allow for collaboration. Neutral signs are the Tiger, Snake, and Ox, which may bring neither significant benefit nor harm.
The document discusses the benefits of exercise for mental health. Regular physical activity can help reduce anxiety and depression and improve mood and cognitive functioning. Exercise causes chemical changes in the brain that may help boost feelings of calmness, happiness and focus.
The document discusses the four pillars of destiny framework for analyzing relationships and marriage compatibility. It explains the elements associated with men and women and their money, intelligence, and power attributes. It also discusses analyzing the timing, nature, and age of a potential spouse based on comparing heavenly stems and earthly branches between two people's birth charts. It provides examples of relationship analyses for several celebrity couples.
This document lists the International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS) as well as notes about replacements and effective dates. It also outlines the components of a complete set of financial statements.
The document discusses budgeting and master budget preparation for a company called Royal. It includes budgets for sales, production, materials, labor, and cash collections and disbursements. The sales, production, materials and labor budgets are prepared on a monthly basis for the next quarter. The cash budgets estimate expected cash inflows from collections and outflows for material purchases. Maintaining proper inventory levels and paying materials suppliers on time are also addressed. The master budget integrates these individual budgets to summarize the company's overall financial plans.
The document provides information about the statement of cash flows, including:
- It describes typical cash inflows and outflows from operating, investing, and financing activities.
- It explains how to convert accrual-based net income into cash-based net cash provided by operating activities using both the indirect and direct methods.
- It provides examples of adjusting the income statement for non-cash items and changes in current assets/liabilities under the indirect method.
- It demonstrates calculating the cash flows from operating activities section of the statement of cash flows using both the indirect and direct methods based on sample company income statement and balance sheet information.
The document outlines the basic framework and process for budgeting. It discusses key elements like the production budget, direct materials budget, direct labor budget, and cash budget. The purpose of budgeting is to aid in planning, coordination, and control of financial and other resources to help achieve organizational objectives.
This document discusses traditional costing systems and activity-based costing (ABC). Traditional systems allocate overhead based on a single rate like direct labor hours, which can over- or under-cost complex products. ABC allocates overhead using multiple cost drivers like direct labor hours, machine hours, and purchase orders. It provides a more accurate allocation of overhead to products. The document provides an example comparing traditional and ABC allocation for two products, Widget A and B, showing ABC results in a more accurate costing. ABC is more appropriate when products differ significantly in volume and complexity.
Accounting for Branches and Combined Financial Statements.pptLayTekchhay2
This document discusses accounting for branches and divisions of a business entity. It defines branches and divisions as separate economic units from the home office but not separate legal entities. Branches carry out sales and collections while divisions have more autonomy. Startup costs for new branches are expensed. Branches can maintain their own accounting records or use the home office as an accounting center. Home offices allocate expenses to branches and may charge interest on capital invested. Combined financial statements are prepared to view the entity as a whole by eliminating reciprocal accounts and intracompany profits/losses.
1) Dividends are returns of wealth by a corporation to its shareholders that may be paid in cash or additional shares. Cash dividends must be paid to preferred shareholders before common shareholders and can only be paid if the corporation has retained earnings, adequate cash, and has declared the dividend.
2) There are different impacts to shareholders' equity depending on if the dividend is paid as cash or additional shares. A cash dividend decreases retained earnings and shareholders' equity, while a stock dividend transfers value from retained earnings to common stock, keeping total equity the same.
3) Retained earnings can be decreased by prior period adjustments to correct errors or changes in accounting principles from previous years, as well as net losses and cash divid
The document provides financial statement analysis of Lincoln Company for 2003 and 2002. It includes comparative balance sheets and income statements, as well as calculations of key financial ratios to analyze the company's solvency, profitability, and efficiency. Ratios such as the current ratio, inventory turnover, and return on assets are presented to evaluate Lincoln Company's performance over the two years.
This document discusses different types of accounting errors that can occur, including errors that do and do not affect the trial balance totals. It describes errors such as omissions, commissions, principles, compensating entries, original entries, and complete reversals that do not affect the totals. Errors that do affect the totals include single entries, overcasting or undercasting of accounts, and recording income as expense or vice versa. The document provides examples and corrections for each type of error.
BONKMILLON Unleashes Its Bonkers Potential on Solana.pdfcoingabbar
Introducing BONKMILLON - The Most Bonkers Meme Coin Yet
Let's be real for a second – the world of meme coins can feel like a bit of a circus at times. Every other day, there's a new token promising to take you "to the moon" or offering some groundbreaking utility that'll change the game forever. But how many of them actually deliver on that hype?
Lecture slide titled Fraud Risk Mitigation, Webinar Lecture Delivered at the Society for West African Internal Audit Practitioners (SWAIAP) on Wednesday, November 8, 2023.
Independent Study - College of Wooster Research (2023-2024) FDI, Culture, Glo...AntoniaOwensDetwiler
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
STREETONOMICS: Exploring the Uncharted Territories of Informal Markets throug...sameer shah
Delve into the world of STREETONOMICS, where a team of 7 enthusiasts embarks on a journey to understand unorganized markets. By engaging with a coffee street vendor and crafting questionnaires, this project uncovers valuable insights into consumer behavior and market dynamics in informal settings."
[4:55 p.m.] Bryan Oates
OJPs are becoming a critical resource for policy-makers and researchers who study the labour market. LMIC continues to work with Vicinity Jobs’ data on OJPs, which can be explored in our Canadian Job Trends Dashboard. Valuable insights have been gained through our analysis of OJP data, including LMIC research lead
Suzanne Spiteri’s recent report on improving the quality and accessibility of job postings to reduce employment barriers for neurodivergent people.
Decoding job postings: Improving accessibility for neurodivergent job seekers
Improving the quality and accessibility of job postings is one way to reduce employment barriers for neurodivergent people.
Seminar: Gender Board Diversity through Ownership NetworksGRAPE
Seminar on gender diversity spillovers through ownership networks at FAME|GRAPE. Presenting novel research. Studies in economics and management using econometrics methods.
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2. Elemental Economics - Mineral demand.pdfNeal Brewster
After this second you should be able to: Explain the main determinants of demand for any mineral product, and their relative importance; recognise and explain how demand for any product is likely to change with economic activity; recognise and explain the roles of technology and relative prices in influencing demand; be able to explain the differences between the rates of growth of demand for different products.
5 Tips for Creating Standard Financial ReportsEasyReports
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2. Traditional Costing Systems
• Product Costs
– Direct labor
– Direct materials
– Factory Overhead
• Period Costs
– Administrative expense
– Sales expense
Appear on the income
statement when
goods are sold, prior
to that time they are
stored on the balance
sheet as inventory.
Appear on the income
statement in the
period incurred.
2
3. Traditional Costing Systems
• Product Costs
– Direct labor
– Direct materials
– Factory Overhead
• Period Costs
– Administrative expense
– Sales expense
Direct labor and direct
materials are easy to
trace to products.
The problem comes
with factory
overhead.
3
4. Traditional Costing Systems
• Typically used one rate to allocate overhead to
products.
• This rate was often based on direct labor
dollars or direct labor hours.
• This made sense, as direct labor was a major
cost driver in early manufacturing plants.
4
5. Problems with Traditional Costing
Systems
• Manufacturing processes and the products
they produce are now more complex.
• This results in over-costing or under-costing.
– Complex products are not allocated an adequate
amount of overhead costs.
– Simple products get too much.
5
6. Today’s Manufacturing Plants
• Are more complex
• Are often automated
• Often make more than one product
• Use proportionately smaller amount of direct
labor making direct labor a poor allocation
base for factory overhead.
6
7. When the manufacturing process is
more complex:
• Then multiple allocation bases should be
used to allocate overhead expense.
• In such situations, managers need to
consider using activity based costing
(ABC).
7
8. ABC Definitions
• Activity based costing is an approach for
allocating overhead costs.
• An activity is an event that incurs costs.
• A cost driver is any factor or activity that has a
direct cause and effect relationship with the
resources consumed.
8
9. ABC Steps
• Overhead cost drivers are determined.
• Activity cost pools are created.
– A activity cost pool is a pool of individual costs
that all have the same cost driver.
• All overhead costs are then allocated to one of
the activity cost pools.
9
10. ABC Steps:
• An overhead rate is then calculated for each
cost pool using the following formula:
– Costs in activity cost pool/base
– The base is, of course, the cost driver
• Overhead costs are then allocated to each
product according to how much of each base
the product uses.
10
11. Let’s work an example . . .
• Assume that a company makes widgets
• Management decides to install an ABC system
11
12. Overhead Cost Drivers are Determined:
• Management decides that all overhead costs
only have three cost drivers—sometimes
called activities (obviously a simplification of
the real world)
– Direct labor hours
– Machine hours
– Number of purchase orders
12
13. All overhead costs are then allocated to one of the
activity cost pools.
Direct Labor
Machine Hours
# of Purchase Orders
General Ledger
Payroll taxes $1,000
Machine maintenance $500
Purchasing Dept. labor $4,000
Fringe benefits $2,000
Purchasing Dept. Supplies $250
Equipment depreciation $750
Electricity $1,250
Unemployment insurance $1,500
Which overhead costs do you
think are driven by direct labor
hours?
13
14. All overhead costs are then allocated to one of the
activity cost pools.
Direct Labor
Machine Hours
# of Purchase Orders
General Ledger
Payroll taxes $1,000
Machine maintenance $500
Purchasing Dept. labor $4,000
Fringe benefits $2,000
Purchasing Dept. Supplies $250
Equipment depreciation $750
Electricity $1,250
Unemployment insurance $1,500
$1,000
2,000
1,500
$4,500
Overhead driver by direct labor
hours
14
15. All overhead costs are then allocated to one of the
activity cost pools.
Direct Labor
Machine Hours
# of Purchase Orders
General Ledger
Payroll taxes $1,000
Machine maintenance $500
Purchasing Dept. labor $4,000
Fringe benefits $2,000
Purchasing Dept. Supplies $250
Equipment depreciation $750
Electricity $1,250
Unemployment insurance $1,500
$1,000
2,000
1,500
$4,500
Which overhead costs are
driven by machine hours?
$ 500
750
1,250
$2,500
15
16. All overhead costs are then allocated to one of the
activity cost pools.
Direct Labor
Machine Hours
# of Purchase Orders
General Ledger
Payroll taxes $1,000
Machine maintenance $500
Purchasing Dept. labor $4,000
Fringe benefits $2,000
Purchasing Dept. Supplies $250
Equipment depreciation $750
Electricity $1,250
Unemployment insurance $1,500
$1,000
2,000
1,500
$4,500
And finally, which overhead
costs are driven by # of
purchase orders?
$ 500
750
1,250
$2,500
$4,000
250
$4,250
16
17. An overhead rate is then calculated for each cost
pool:
Direct Labor
Machine Hours
# of Purchase Orders
$1,000
2,000
1,500
$4,500
$ 500
750
1,250
$2,500
$4,000
250
$4,250
Again the formulas is:
Costs in Activity Cost Pool/Base = rate
Assume the following bases:
Direct labor hours = 1,000
Machine hours = 250
Purchase orders = 100
$4,500/1,000 = $4.50 per direct labor hour
$2,500/250 = $10 per machine hour
$4,250/100 = $42.50 per purchase order
The ABC rates are:
17
18. Overhead costs are then allocated to each
product according to how much of each base the
product uses.
$4,500/1,000 = $4.50 per direct labor hour
$2,500/250 = $10 per machine hour
$4,250/100 = $42.50 per purchase order
The ABC rates are:
Lets assume the company makes two products, Widget A and Widget B:
Let’s also assume that each product uses the following quantity
of overhead cost drivers:
Base Widget A Widget B Total
Direct labor hours 400 600 1,000
Machine hours 100 150 250
Purchase orders 50 50 100
Notice that
all base units
are
accounted
for.
18
19. Now let’s allocate overhead to Widget
A:
Base A Rate Allocated
Direct labor hours 400 $ 4.50 $ 1,800.00
Just like we learned in Accounting 2020, we multiply
the base used by the rate.
In this case, 400 hours used to make Widget A is
multiplied by the rate of $4.50. This gives total overhead
applied for this activity cost pool of $1,800 to
Widget A.
19
20. Continuing the calculation:
Widget A Base Rate Allocated
Direct labor hours 400 $ 4.50 $ 1,800.00
Machine hours 100 $ 10.00 $ 1,000.00
Purchase orders 50 $ 42.50 $ 2,125.00
Total $ 4,925.00
Let’s do the same thing for the other two rates, to get the total amount
of overhead applied to Widget A:
20
21. Now let’s allocate overhead to Widget
B:
Let’s do the same thing for the other two rates, to get the total amount
of overhead applied.
Widget B Base Rate Allocated
Direct labor hours 600 $ 4.50 $ 2,700.00
Machine hours 150 $ 10.00 $ 1,500.00
Purchase orders 50 $ 42.50 $ 2,125.00
Total $ 6,325.00
The original overhead to be applied was $4,500 of direct labor
driven overhead + $2,500 of machine hour driven overhead + $4,250 of
purchase order driven overhead = $11,250 total overhead to apply.
The actual overhead allocated was $4,925 for Widget A + $6,350 =
$11,250 overhead applied.
21
22. Same Problems Traditional Method
• Okay, so what if we had allocated the
overhead in this company using traditional
cost accounting allocation.
• Let’s assume the base is direct labor hours.
• What would be the amount allocated to each
product?
22
23. Calculation
General Ledger
Payroll taxes $1,000
Machine maintenance $500
Purchasing Dept. labor $4,000
Fringe benefits $2,000
Purchasing Dept. Supplies $250
Equipment depreciation $750
Electricity $1,250
Unemployment insurance $1,500
This the total
overhead we were
given, the total
amount is $11,250
as explained on
the previous slide.
Base Widget A Widget B Total
Direct labor hours 400 600 1,000
Machine hours 100 150 250
Purchase orders 40 60 100
Total direct labor
hours are 1,000, also
given earlier.
23
24. Calculation
• The rate would be:
– OH Rate = Overhead/Direct Labor Hours
– $11,250/1,000 = $11.25 per hour.
• Applying overhead using this rate:
– Widget A: 400 hours x $11.25 = $4,500
– Widget B: 600 hours x $11.25 = $6,750
– Total overhead applied = $11,250
24
25. Comparison
Widget A Widget B Total
Traditional Method $4,500 $6,750 $11,250
Activity Based
Costing
$4,925 $6,325 $11,250
Difference -$425 $425 -0-
Which is more accurate?
ABC Costing!
Note these are total costs. To get per-unit costs we would divide by the
number of units produced.
25
26. When do we use ABC costing?
• When one or more of the following conditions
are present:
• Product lines differ in volume and
manufacturing complexity.
• Product lines are numerous and diverse, and
they require different degrees of support
services.
• Overhead costs constitute a significant portion
of total costs.
26
27. When do we use ABC costing?
• The manufacturing process or number of
products has changed significantly—for
example, from labor intensive to capital
intensive automation.
• Production or marketing managers are
ignoring data provided by the existing system
and are instead using “bootleg” costing data
or other alternative data when pricing or
making other product decisions.
27
28. Additional Uses of ABC
• Activity Based Management (ABM)
– Extends the use of ABC from product costing to a
comprehensive management tool that focuses on
reducing costs and improving processes and
decision making.
28
29. ABM
• ABM classifies all activities as value-added or
non-value-added.
– Value-added activities increase the worth of a
product or service to the customer.
• Example: Addition of a sun roof to an automobile.
– Non-value added activities don’t.
• Example: The cost of moving or storing the product
prior to sale.
29
30. The Objective of ABM . . .
• To reduce or eliminate non-value related
activities (and therefore costs).
• Attention to ABM is a part of continuous
improvement of operations and activities.
30
31. Possible Cost Drivers
• Machine hours
• Direct labor hours
• Number of setups
• Number of products
• Number of purchase orders
• Number of employees
• Number of square feet
31
32. Common Classification System
• Unit-level activities. Activities performed for
each unit of production.
• Batch-level activities. Activities performed for
each of bath of products.
• Product-level activities. Activities performed
in support of an entire product line.
• Facility-level activities. Activities required to
sustain an entire production process.
32
33. Common Classification System
• This system provides a structured way of
thinking about relationship between activities
and the resources they consume.
33
34. Facility Sustaining Activities
• Have no good cost driver
• May or may not be allocated to products
depending upon the purpose for which the
information is to be used
• Examples
– Housekeeping
– Factory yard maintenance
34
35. Manufacturing Systems
• Traditional
– “Just-in-Case.”
• Inventories of raw materials are maintained just in case
some items are of poor quality or key suppliers don’t
delivery on time.
– Push approach manufacturing.
• Materials are pushed through the manufacturing
process.
– Based on standard costs. Once a standard is
reached improvement ceases.
35
36. Manufacturing Systems
• Progressive
– “Just in Time.”
• Raw materials arrive just in time for use in production.
• Finished goods are manufactured just in time to meet
customer needs.
– Pull approach manufacturing.
• Raw materials are not put into the process until the
next department requests them.
– Continuous quality improvement.
36
37. Three important elements must exist
for JIT systems to work:
• Dependable suppliers who can delivery on
short notice.
• Multiskilled workforce who can work in work
cells or work stations.
– One worker may operate several kinds of
machines.
• Total quality management. Objective is no
defects.
37
38. Objectives of JIT
• Reduction or elimination of inventories
• Enhanced production quality
• Reduction or elimination of rework costs
• Production cost savings from improved flow of
goods through the process.
38