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Which costing method do you think is better for the company?

17 / 01 / 2019 Research Papers

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Senkowski Ltd. cost information: Activity-Purchasing, Allocation Base -Purchase ord 1 answer below » Senkowski Ltd. cost information: Activity-Purchasing, Allocation Base -Purchase orders, Volume of Activity 30,000, Overhead costs $150,000. Activity-Receiving,
Allocation base Shipments received, Volume of Activity 15,000, Overhead Cost 60,000. Activity-Machine setups, Allocation Base-Setups, Volume of Activity 2,500,
Overhead costs 200,000. Activity- Quality control, Allocation base Inspections, Volume of Activity 18,000, Overhead costs 90,000. Direct materials are $15 per unit
for luxury handbags and $11 per unit for deluxe handbags. There were 12, 500 direct labor hours, each of which View complete question » Senkowski Ltd. cost information: Activity-Purchasing, Allocation Base -Purchase orders, Volume of Activity 30,000, Overhead costs $150,000. Activity-Receiving,
Allocation base Shipments received, Volume of Activity 15,000, Overhead Cost 60,000. Activity-Machine setups, Allocation Base-Setups, Volume of Activity 2,500,
Overhead costs 200,000. Activity- Quality control, Allocation base Inspections, Volume of Activity 18,000, Overhead costs 90,000. Direct materials are $15 per unit
for luxury handbags and $11 per unit for deluxe handbags. There were 12, 500 direct labor hours, each of which was charged to inventory at $18 per hour. A.
Management is trying to decide between using the traditional allocation method based on direct labor hours and using activity-based costing. Calculate the overhead
rates for each method. B. One particular batch of 40 luxury handbags had the following specifications: direct labor hours 8, purchase orders 4, shipments received
3, setups 2, inspections 12. Calculate the overhead to be allocated to the bags under the traditional and activity-based costing techniques. C.Which costing method
do you think is better for the company? Why? View less » Oct 26 2013 05:27 PM


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