Problem 2Ticketprint Corporation owns a small printing press that prints tickets for concerts, sport events and other liveevents Ticketprint classifies its various printing loads as standard loads or special loads Ticketprint's simplejob-costing system has two direct-cost categories (direct materials and direct labor) and a single indirect-costpool Ticketprint allocates all indirect costs using printing machine-hours as the allocation base.Ticketprint is concerned about the accuracy of the costs assigned to standard and special loads andtherefore is planning to implement an activity-based costing (ABC) system Ticketprint's ABC systemwould have the same direct-cost categories as its simple costing system. However, instead of a singleindirect cost pool there would now be six categories for assigning indirect costs: design, purchasing.setup, printing machine operations, marketing and administration. To see how ABC system would affectthe costs of standard and special loads, Ticketprint collects the following information for the fiscal year2017 that just ended.Number of printingloadsPrice per loadCost of supplies perloadDesign costsDirect manufacturinglabor cost per loadPrinting machine hoursper loadCost of printingmachine operationsSetup hours per loadSetup costsTotal number ofpurchase ordersPurchase order costsMarketing andadministration costs54400$4,000StandardLoad200$905% ofsalesprice$600$10075500SpecialLoad100$750$125$100$16.0005% ofsalespriceTotal$75,000$45,000$18,000$20,000$39,000Cause-and-effect relationship betweenAllocation Base and Activity CostIndirect costs of operating machinesIncrease with printing machine hoursIndirect setup costs increase with setuphoursIndirect purchase order costs increasewith number of purchase ordersDesign costs are allocated to standardand special loads based on a specialstudy of the design departmentRequired:1. Calculate the cost of a standard load and a special load under the simple costing system (2. Calculate the cost of a standard load and a special load under the activity-based costing system3. Compare the costs of a standard load in requirements 1 and 2. Why do the simple and activity-hased costing systems differ in the cost of a standard load and a special load

Name: Problem 2Ticketprint Corporation owns a small printing press that pri
Uploaded: 2024-03-20T06:32:49.000Z
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Description: Problem 2Ticketprint Corporation owns a small printing press that prints tickets for concerts, sport events and other liveevents Ticketprint classifies its various printing loads as standard loads or special loads Ticketprint's simplejob-costing sys

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Problem 2 worth) Ticketprint Corporation owns a small printing pres that prints tickets for concerts, sport events and other live events Ticketprint classifies its various printing loads as standard loads or special loads Ticketprint's simple job-costing system has two direct-cost categories (direct materials and direct labor) and a single indirect-cost pool Ticketprint allocates all indirect costs using printing machine-hours as the allocation base Ticketprint is concerned about the accuracy of the costs assigned to standard and special loads and therefore is planning to implement an activity-based costing (ABC) system Ticketprint's ABC system would have the same direct-cost categories as its simple costing system. However, instead of a single indirect cost pool there would now be six categories for assigning indirect costs: design, purchasing. setup, printing machine operations, marketing and administration. To see how ABC system would affect the costs of standard and special loads, Ticketprint collects the following information for the fiscal year 2017 that just ended Number of printing loads Price per load Cost of supplies per load Direct manufacturing labor cost per load Printing machine hours per load Cost of printing Design costs machine operations Setup hours per load Setup costs Total number of purchase orders Purchase order costs Marketing and administration costs 5 4 400 $4,000 Standard Load 200 $90 5% of sales price 5600 $100 5 500 Special Total Load 100 $750 $100 $125 $16.000 5% of sales price $75,000 $45,000 $18,000 $20,000 $39,000 Cause-and-effect relationship between Allocation Base and Activity Cost Indirect costs of operating machines Increase with printing machine hours Indirect setup costs increase with setup hours Indirect purchase order costs increase with number of purchase orders Design costs are allocated to standard and special loads based on a special study of the design department Required: 1. Calculate the cost of a standard load and a special load under the simple costing system 2. Calculate the cost of a standard load and a special load under the activity-based costing system 3. Compare the costs of a standard load in requirements 1 and 2. Why do the simple and activity- hased costing systems differ in the cost of a standard load and a special load