Here is the synopsis of our sample research paper on Activity Based and Costing and Absorption Costing Questions. Have the paper e-mailed to you 24/7/365.
Essay / Research Paper Abstract
This 3 page paper looks at a question set by the student and shows two methods of calculating costs for the production of goods and compares the results. The bibliography cites 1 source.
Page Count:
3 pages (~225 words per page)
File: TS14_TEabccost.rtf
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Unformatted sample text from the term paper:
can then be divided into the unit numbers and then added together. To perform this we need to have the cost of the labour and the parts. The cost of
the parts is given, however, we are given the number of hours used and the hourly cost of 15, so we need to calculate this figure Number of labour hours
used (a) cost per hour (b) total labour cost (a x b) 13,120 15 196,800 This can be used in the total direct cost calculation then calculating the cost per
unit. This calculation is shown below Expenditure type Expenditure amount No of units cost per unit Direct materials 107,200 3,200 33.5 Direct labour 196,800 3,200 61.5 Total direct cost 95
This gives us the total cost for the tables in the question as being 95 per unit in the month of July. This assumes there is no starting inventory or
no ending inventory. We can see a benefit of activity based costing as the labour hours and direct materials are the actual costs rather than allocated as an overhead estimate,
meaning that the cost per unit may be different in the August and September. Part B If the company want to use absorption costing then we need to calculate
the total overhead then we need to look at the different costs estimated for the year over the 50,000 production estimate. WE need to calculate some figures, we know that
the overhead is allocated at 20 per hour, but we do not know how many hours are to be used. For this we can look back to the July figures
where the cost of labour was 13,120 for 3,200 units, making the number of labour hours per unit 4.1 hours. For the total over the year for 50,000 units this
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