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Managerial Accounting: Traditional Costing vs Activity Based Costing

   

Added on  2023-04-19

10 Pages1859 Words185 Views
MGMT E-1600 - Managerial Accounting
Case Assignment
Managerial Accounting: Traditional Costing vs Activity Based Costing_1
Table of Contents
Question 1........................................................................................................................................3
Question 2........................................................................................................................................3
Question 3........................................................................................................................................4
Question 4........................................................................................................................................6
Question 5........................................................................................................................................6
Question 6........................................................................................................................................8
References......................................................................................................................................10
Managerial Accounting: Traditional Costing vs Activity Based Costing_2
QUESTION 1
Table 1: Statement Showing Gross Margin using Traditional Costing Method in 2018
Particulars Traditional Products Modern Products
Sales Units 12500 12500
Direct Labor Hours 2500 1250
Sales Price / Unit $400.00 $550.00
Total Sales $ 5,000,000.00 $6,875,000.00
Change in Inventory $ - $ -
$ 5,000,000.00 $6,875,000.00
Direct Material $2,500,000.00 $4,375,000.00
Direct Labor $462,962.50 $ 234,182.50
Manufacturing Overhead $1,450,000.00 $ 725,000.00
Total Direct Cost $ 4,412,962.50 $5,334,182.50
Gross Profit $587,037.50 $1,540,817.50
QUESTION 2
Table 2 Statement Showing Gross Margin using Activity Based Costing Method in 2018
Particulars Traditional
Products Modern Products
Sales Units 12500 12500
Direct Labor Hours 2500 1250
Sales Price / Unit $400.00 $550.00
Total Sales $ 5,000,000.00 $6,875,000.00
Change in Inventory
$
- $ -
$ 5,000,000.00 $6,875,000.00
Direct Material $2,500,000.00 $4,375,000.00
Direct Labor $462,962.50 $ 234,182.50
Manufacturing Overhead (Working Note 1) $685,212.23 $ 1,489,787.77
Total Direct Cost $3,648,174.73 $6,098,970.27
Managerial Accounting: Traditional Costing vs Activity Based Costing_3

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