Benefits of Replacing Activity Based Costing (ABC)
Sami Design Ltd manufactures Sami musical instruments for use by high school students. The company uses a job costing system in which manufacturing overhead is applied on the basis of direct labour hours. The company’s budget for the current year included the following predictions: Budgeted total manufacturing overhead 15 15 426300.0 Budgeted total direct labour hours 15 15 20300.0 During March, the firm began two production jobs: 15 15 76.0 15 15 110.0 The events of March are described as follows: 15 1000.0 15 1000.0 5000.0 15 400.0 15 400.0 4000.0 The following requisitions were filed on 5 March: — requisition number 112: 250 square metres of Sami sheet metal @ $5 per square metre (for job
11 Pages2518 Words65 Views
Added on 2023-01-11
About This Document
This document discusses the benefits of replacing Activity Based Costing (ABC) in manufacturing job costing systems. It explains the issues with traditional costing systems and how ABC can provide more accurate cost allocation. The document also highlights the improvements in cost estimation, operational control, and performance evaluation that ABC can bring. Overall, it emphasizes the advantages of using ABC in manufacturing job costing.
No documents found. Try with a different documents.
Costing and Budgeting Analysis for Manufacturing and Production
|7
|881
|206
Job Order Costing Concept 2022
|15
|2268
|24
Management Accounting(MA) Assignment
|9
|1516
|73
Chapter 4 Systems Design: Process Costing
|53
|9865
|196