5-25 Activity-based costing, service company. Speediprint Corporation ówns a small printing press that prints leaflets, brochures, and advertising materials. Speediprint classifies its various printing jobs as stan- dard jobs or special jobs. Speediprint's simple job-costing system has two direct-cost categories (direct materials and direct labor) and a single indirect-cost pool. Speediprint operates at capacity and allocates in that dep all indirect costs using printing machine-hours as the allocation base. Speediprint is concerned about the accuracy of the costs assigned to standard and special jobs and therefore is planning to implement an activity-based costing system. Speediprint'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. nri ing machine operations, marketing, and administration. To see how activity-based costing would affer the costs of standard and special jobs, Speediprint collects the following information for the fiscal veay 2017 that just ended.
5-25 Activity-based costing, service company. Speediprint Corporation ówns a small printing press that prints leaflets, brochures, and advertising materials. Speediprint classifies its various printing jobs as stan- dard jobs or special jobs. Speediprint's simple job-costing system has two direct-cost categories (direct materials and direct labor) and a single indirect-cost pool. Speediprint operates at capacity and allocates in that dep all indirect costs using printing machine-hours as the allocation base. Speediprint is concerned about the accuracy of the costs assigned to standard and special jobs and therefore is planning to implement an activity-based costing system. Speediprint'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. nri ing machine operations, marketing, and administration. To see how activity-based costing would affer the costs of standard and special jobs, Speediprint collects the following information for the fiscal veay 2017 that just ended.
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter9: Cost Accounting For Service Businesses, The Balanced Scorecard, And Quality Costs
Section: Chapter Questions
Problem 8P
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