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Assignment on Management Accounting in Organization

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Added on  2020-04-07

Assignment on Management Accounting in Organization

   Added on 2020-04-07

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MANAGEMENTACCOUNTINGSTUDENT ID:[Pick the date]
Assignment on Management Accounting in Organization_1
MANAGEMENT ACCOUNTINGQuestion 1For the manufacturing overhead cost allocation as per ABC method, the first step would be todetermine the cost per activity based on the respective cost drivers which has been carried outbelow.Taking the above per activity cost, manufacturing overheads relating to each activity wouldbe allocated to Fred and Martha based on the given production data provided. This ishighlighted below.Allocation of Machine Related CostsMachine related cost per machine hour = $ 50 (from above table)One unit of Fred consumes four machine hours as against one machine hour consumed byeach unit of Martha.Hence, machine related costs allocated to every Fred unit = 4*50 = $ 200Hence, machine related costs allocated to every Martha unit = 1*50 = $ 50Allocation of Setup and InspectionEach run related setup cost = $ 4,500 (from above table)In each production run, the production of Fred and Martha amounts to 50 units and 250 unitsrespectively.Inspection cost on production of each Fred unit = (4500/50) = $ 90Inspection cost on production of each Martha unit = (4500/250) = $ 18
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