Chapter 4 Activity-Based Costing 3. Calculate the global consumption ratios. 4. Calculate the consumption ratios for welding and materials handling (Assembly) and show that two drivers, welding hours and number of parts, can be used to achieve the same ABC product costs calculated in Requirement 2. Explain the value of this simplification. 5. Calculate the consumption ratios for inspection and engineering, and show that the drivers for these two activities also duplicate the ABC product costs calculated in Requirement 2. Problem 4.37 Approximately Relevant ABC Refer to the data given in Problem 4.36 and suppose that the expected activity costs are reported as follows (all other data remain the same): 2 Process Activity Cost Cutting and Welding Welding $2,000,000 Machining
Chapter 4 Activity-Based Costing 3. Calculate the global consumption ratios. 4. Calculate the consumption ratios for welding and materials handling (Assembly) and show that two drivers, welding hours and number of parts, can be used to achieve the same ABC product costs calculated in Requirement 2. Explain the value of this simplification. 5. Calculate the consumption ratios for inspection and engineering, and show that the drivers for these two activities also duplicate the ABC product costs calculated in Requirement 2. Problem 4.37 Approximately Relevant ABC Refer to the data given in Problem 4.36 and suppose that the expected activity costs are reported as follows (all other data remain the same): 2 Process Activity Cost Cutting and Welding Welding $2,000,000 Machining
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Chapter 4 Activity-Based Costing
3. Calculate the global consumption ratios.
4. Calculate the consumption ratios for welding and materials handling (Assembly) and show
that two drivers, welding hours and number of parts, can be used to achieve the same ABC
product costs calculated in Requirement 2. Explain the value of this simplification.
5. Calculate the consumption ratios for inspection and engineering, and show that the drivers
for these two activities also duplicate the ABC product costs calculated in Requirement 2.
Problem 4.37 Approximately Relevant ABC
Refer to the data given in Problem 4.36 and suppose that the expected activity costs are reported
as follows (all other data remain the same):
2
Process
Activity
Cost
Cutting and Welding
Welding
$2,000,000
Machining
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