Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. volume based and abc allocations, manufacturing (l

Volume based and ABC allocations, manufacturing (LO2). Cesar Ablang is a product manager for a...

60.1K

Verified Solution

Question

Accounting

Volume based and ABC allocations, manufacturing (LO2). Cesar Ablang is a product manager for a Malaysian firm. His product is made in batches of 2,500 units each. In past years, his product cost was $14.50 per unit, including $8 in variable costs. The remainder is overhead, allocated based on the number of units. Cesar's firm recently implemented an ABC system. Under this system, the overhead allocated based on the number of units dropped to $3.50 per unit. In addition, each batch is allocated $3,500 in overhead and each variety of the product is allocated $14,500 for product-level costs. Suppose Cesar wants to increase the volume of operations to 15,000 units, comprising of 3 product varieties (7,000, 4,000 and 4,000 units each). For each variety, the maximum possible batch size will remain at 2,500 units.

Required:

a.Estimate the total cost for all 15,000 units under the "old" allocation system.

b. Estimate the cost for all 15,000 units using the ABC system.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Assume that females have pulse rates that are normally distributed with a mean of mu equals...

Statistics
Q

Do you think disorders such as chronic fatigue syndrome are “last chance” diagnoses for patients with...

Biology
Q

Q3 In the presence of a template DNA, a primer and deoxyribonucleotides, DNA polymerase synthesises DNA...

Biology
Q

DOUBLE LEG BRIDGE WITH RESISTANCE (362): 1. What is the PRIMARY muscle (agonist) responsible for holding tension...

Medical Sciences
Q

Some time ago, Julie purchased eleven acres of land costing $14,890. Today, that land is valued...

Finance
Q

"Off Balance Sheet Financing" Harold Walker is CEO and Owner of Walker Enterprises (WE), a company that...

Accounting
Q

Q12 Using the data see table please answer the following question How many students are...

Biology
Q

Calculate the sample standard deviation of the quantitative data shown Round to two decimal place...

Statistics
Q

Solve for z log x log z 3 5

Algebra
Q

x is evaluating a project which costs 1.500.000, customs + duties are 10% of purchase...

Accounting
Q

Question 8 of 8 Note 1 $ Note 2 $...

Accounting
Q

Employee Net Pay all earnings, what is Inverness's net pay? If required, round your answer...

Accounting