FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Abbott Business Services (ABS) generated revenue of $653,800 processing accounts payable and payroll transactions for clients. ABS reports the following information about resources in two functions: Resources used Process transactions Administer accounts Resources supplied Process transactions Administer accounts Required: a. Compute the cost of unused resource capacity at Abbott Business Services. b. Prepare a traditional income statement. c. Prepare an activity-based income statement. Required A Required B Required C Complete this question by entering your answers in the tabs below. Prepare an activity-based income statement. Revenue Costs Cost Driver Rate $ 0.008 per transaction $525 per account $ 226,000 $ 296,000 Volume related - Process transactions Batch related - Administer accounts Total costs Operating profits Activity-Based Income Statement Resources Used $ Unused Resource Capacity 0 $ Cost Driver Volume 17,540,000 transactions 446 accounts Resources Supplied 0 $ 0 $ 653,800 $ 0 653,800
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Transcribed Image Text:Abbott Business Services (ABS) generated revenue of $653,800 processing accounts payable and payroll transactions for clients. ABS reports the following information about resources in two functions: Resources used Process transactions Administer accounts Resources supplied Process transactions Administer accounts Required: a. Compute the cost of unused resource capacity at Abbott Business Services. b. Prepare a traditional income statement. c. Prepare an activity-based income statement. Required A Required B Required C Complete this question by entering your answers in the tabs below. Prepare an activity-based income statement. Revenue Costs Cost Driver Rate $ 0.008 per transaction $525 per account $ 226,000 $ 296,000 Volume related - Process transactions Batch related - Administer accounts Total costs Operating profits Activity-Based Income Statement Resources Used $ Unused Resource Capacity 0 $ Cost Driver Volume 17,540,000 transactions 446 accounts Resources Supplied 0 $ 0 $ 653,800 $ 0 653,800
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Step 1: Defining Activity Based Costing
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