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Author Question: Aunt Ethel's Fancy Cookie Company manufactures and sells three flavors of cookies: Macaroon, Sugar, ... (Read 300 times)

notis

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on: Mar 6, 2021

Question 1

The cost data produced by an ABC system for either a service or a product are only derived from indirect costs.
◦ true
◦ false

Question 2

Aunt Ethel's Fancy Cookie Company manufactures and sells three flavors of cookies: Macaroon, Sugar, and Buttercream. The batch size for the cookies is limited to 1,000 cookies based on the size of the ovens and cookie molds owned by the company. Based on budgetary projections, the information listed below is available:

MacaroonSugar  Buttercream
Projected sales in units500,000800,000600,000
PER UNIT data:
Selling price$0.80$0.75$0.60
Direct materials$0.20$0.15$0.14
Direct labor$0.04$0.02$0.02
Hours per 1000-unit batch:
Direct labor hours211
Oven hours111
Packaging hours0.50.50.5

Total overhead costs and activity levels for the year are estimated as follows: 

ActivityOverhead costsActivity levels
Direct labor 2,400 hours
Oven$210,0001,900 oven hours
Packaging$150,000950 packaging hours
$360,000

Required:
a.Determine the activity-cost-driver rate for packaging costs. 
b.Using the ABC system, for the sugar cookie:
1.compute the estimated overhead costs per thousand cookies.
2.compute the estimated operating profit per thousand cookies. 
c.Using a traditional system (with direct labor hours as the overhead allocation base), for the 
sugar cookie:. 
1.compute the estimated overhead costs per thousand cookies.
2.compute the estimated operating profit per thousand cookies. 
d.Explain the difference between the profits obtained from the traditional system and the ABC 
system. Which system provides a better estimate of profitability? Why?
Horngren's Cost Accounting: A Managerial Emphasis ¦ Datar, Rajan ¦ 16th Edition
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Marked as best answer by notis on Mar 6, 2021

zoeyesther

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Reply #1 on: Mar 6, 2021
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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Saed Hqer

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Reply #2 on: Apr 7, 2023
Thank you


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