GEN COMBO FUNDAMENTALS OF COST ACCOUNTING; CONNECT 1S ACCESS CARD
5th Edition
ISBN: 9781259911651
Author: William N. Lanen Professor
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 10, Problem 31E
Activity-Based Costing of Customers
Refer to the data in Exercise 10-30.
Required
- a. How can RSB&T use the information from the activity-based costing analysis to manage its costs?
- b. What does RSB&T need to consider before implementing your suggestions from requirement (a)?
10-32. Activity-Based Costing of Customers: Ethical Issues
Red’s Lumber hired a consultant to update its system for reporting the cost of customers. The consultant showed Red an analysis that indicates that customer support costs are significantly higher for customers who order on weekends than for those who order during the week.
Required
- a. What pricing decisions might Red make based on the consultant’s information?
- b. Would these be ethical? Why or why not?
- c. The consultant comes back to Red’s office and explains that he made a mistake in the analysis. The relation is actually between cost of customer support and the customer’s gender. Does this affect your answers to requirements (a) and (b)?
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Students have asked these similar questions
Garrell Corporation is conducting a time-driven activity-based costing study in its Customer Support Department. The company has provided the following data to aid in that study:
Time-driven
activity rate
(cost per unit
of activity)
Activity cost pool:
Receiving Calls
Resolving Issues
Settling Disputes
Cost Object Data:
Number of calls received
Number of issues resolved
Number of disputes settled
Customer P
31
17
1
$5.46
$8.58
$13.26
Customer Q
21
10
Required:
Using time-driven activity-based costing, determine the total Customer Support Department cost assigned to cach customer.
Checklist of evidence
required
Finally, you should reflect on the results of your activity-based
costing exercise, by:
a) explaining how costs are categorised.
b) identifying those cost areas that have the greatest impact
on the profitability of the product that you have investigated.
c) evaluating the reasons for producing an activity-based cost
model.
d) explain how ABC model used to improve profitability.
A research and problem solving project to explore the costs associated
with engineering activities and to complete an activity-based cost model
for a product.
What I Know
Before we begin this lesson, let us check first your prior knowledge on this
module. After taking and checking this short test, take note of the items that you are
not able to answer correctly and look for the right answer as you go through this
module.
Direction: Encircle the letter of the correct answer.
1. What type of cost includes product ingredients and materials?
а.
fixed
b.
revenue
с.
total
d.
variable
2. What type of cost includes the rental of space?
а.
fixed
b.
revenue
c.
total
d.
variable
3. What type of cost is the product of the price and the quantity sold?
а.
fixed
b.
revenue
с.
total
d.
variable
4. What concept is being described when the business will neither earn a profit
nor suffer a loss?
а.
break-even
b.
loss
с.
profit
d.
summit
5. What type of analysis shows equal revenue and total cost?
а.
break-even
b.
cost of variable
c. profit-loss
d. volume of sales
Chapter 10 Solutions
GEN COMBO FUNDAMENTALS OF COST ACCOUNTING; CONNECT 1S ACCESS CARD
Ch. 10 - How are activity-based costing and activity-based...Ch. 10 - Can activity-based management be implemented...Ch. 10 - Prob. 3RQCh. 10 - What are some ways in which customers affect a...Ch. 10 - How is computing the cost of customers the same as...Ch. 10 - Prob. 6RQCh. 10 - Prob. 7RQCh. 10 - Under what conditions should the cost of excess...Ch. 10 - In what ways does quality affect cost?Ch. 10 - What are the four categories in a cost of quality...
Ch. 10 - Prob. 11CADQCh. 10 - Prob. 12CADQCh. 10 - Consider a library that spends 25,000 to move most...Ch. 10 - Prob. 14CADQCh. 10 - Prob. 15CADQCh. 10 - You can get the cost of customers by first...Ch. 10 - Prob. 17CADQCh. 10 - Prob. 18CADQCh. 10 - Prob. 19CADQCh. 10 - Prob. 20CADQCh. 10 - Many if not most schools in the United States have...Ch. 10 - Prob. 22CADQCh. 10 - Prob. 23CADQCh. 10 - Prob. 24ECh. 10 - Prob. 25ECh. 10 - Cost Hierarchy for a Not-for-Profit Below are...Ch. 10 - Prob. 27ECh. 10 - Driver Identification Below are various activities...Ch. 10 - Activity-Based Costing of Customers Marvins...Ch. 10 - Activity-Based Costing of Customers Rock Solid...Ch. 10 - Activity-Based Costing of Customers Refer to the...Ch. 10 - Activity-Based Costing of Customers: Ethical...Ch. 10 - Prob. 33ECh. 10 - Activity-Based Costing of Suppliers Hult Games...Ch. 10 - Prob. 35ECh. 10 - Activity-Based Costing of Suppliers Kinnear...Ch. 10 - Activity-Based Costing of Suppliers Refer to the...Ch. 10 - Resources Used versus Resources Supplied Tri-State...Ch. 10 - Prob. 39ECh. 10 - Resources Used versus Resources Supplied Conlon...Ch. 10 - Prob. 41ECh. 10 - Prob. 42ECh. 10 - Assigning Cost of Capacity Mimis Fixtures...Ch. 10 - Assigning Cost of Capacity Curts Casting...Ch. 10 - Prob. 45ECh. 10 - Costs of Quality The following represents the...Ch. 10 - Trading-Off Costs of Quality Using the costs...Ch. 10 - Costs of Quality Nuke-It-Now manufactures...Ch. 10 - Prob. 49ECh. 10 - Cost of Quality: Environmental Issues Many...Ch. 10 - Prob. 51ECh. 10 - Prob. 52PCh. 10 - Activity-Based Reporting: Service Organization...Ch. 10 - Prob. 54PCh. 10 - Customer Profitability Carmel Company has a...Ch. 10 - Activity-Based Costing of Suppliers JFI Foods...Ch. 10 - Activity-Based Costing of Suppliers Consider the...Ch. 10 - Activity-Based Reporting: Manufacturing...Ch. 10 - Assigning Capacity Costs Cathy and Toms Specialty...Ch. 10 - Prob. 60PCh. 10 - Prob. 61PCh. 10 - Assigning Capacity Costs Mercia Chocolates...Ch. 10 - Prob. 63PCh. 10 - Prob. 64PCh. 10 - Prob. 65P
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