# Essays on Activity-Based Costing Assignment

The paper "Activity-Based Costing " is a great example of a finance and accounting assignment. Predetermined manufacturing overhead rate  is unit overhead absorbed to the product on the basis of the unit of base. The method is employed to apply manufacturing overhead to the product or job orders as well normally worked out at the start of every period (Baker 1998). The approach is derived as follows Predetermined manufacturing overhead rate= {Budgeted overhead/unit of base} Advantages and disadvantages of using the cost of each print as a manufacturing overhead cost driver The advantage of the approach is that cost will be more precise since the cost is tailored towards a specific product.

The disadvantage is that it places too mu8ch emphasize on the anticipation of how many every single product will be sold. 3. Predetermined manufacturing overhead rate for Printex based on print cost.   Price per unit No of unit Total cost Unframed 12 80,000 960000 steel framed no matting 16 15000 240000 Wood-framed with matting 20 7000 140000 Total printing cost     1340,000 Pre-determined overhead absorption rate= {manufacturing overhead/total printing cost} {375,200 /1340, 000=0.28 per unit 4. Expected product unit cost   Unframed steel framed no matting Wood-framed with matting Unit price 12 16 20 Absorption rate 0.28 0.28 0.28 unit cost 12.28 16.28 20.28 5. (A) How much of the total overhead cost is expected to be allocated to: unframed prints = 9960,000*0.28)=\$268000 steel framed prints=(240,000*0.28)= \$67200 wood framed prints=(140,000*0.28)=\$39200 B.

percentage of the total overhead cost is expected to be allocated to unframed prints The percentage of the entire overhead cost anticipated to be allotted to unframed print, steal print without matting and wood print with matting is \$71.64%. (268,000/374400) 6 Do you think the amount of overhead allocated to the three product categories is reasonable? No, I don’ t think is the amount of overhead apportioned to the three product is realistic since there is too much overhead allotted to unframed prints with very small overhead allotted to framed prints.

Reference

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Baker, JJ 1998, Activity-based Costing and Activity-based Management for Health Care, Jones & Bartlett Learning, New York.

Budgeting, ABMOP-B 2009, Marc Robinson, ‎Mr. Duncan Last, New york.

Gerald Miller, ‎BH‎R 2001, Performance Based Budgeting, London.

Janet M. Kelly, ‎CR, Performance Budgeting for State and Local Government.

Lewis, RJ 1995, Activity-based Models for Cost Management Systems, Greenwood Publishing Group, London.