{"id":2523,"date":"2020-10-30T10:52:08","date_gmt":"2020-10-30T10:52:08","guid":{"rendered":"http:\/\/onlineclassesguru.com\/?p=2523"},"modified":"2020-10-30T10:52:08","modified_gmt":"2020-10-30T10:52:08","slug":"activity-based-costing-method","status":"publish","type":"post","link":"https:\/\/onlineclassesguru.com\/index.php\/2020\/10\/30\/activity-based-costing-method\/","title":{"rendered":"Activity Based Costing Method"},"content":{"rendered":"<style type=\"text\/css\"><\/style><p><u>Assignment Question(s)<\/u>:<\/p>\n<p>&nbsp;<\/p>\n<p>Q1. Explain how work the Activity-Based Costing (ABC), what is the challenge and how we can resolve it?<\/p>\n<p>Q2.During June, Mushrif Corporation purchased SAR 76,000 of raw materials on credit to add to its raw materials inventory. A total of SAR 81,000 of raw materials was requisitioned from the storeroom for use in production. These requisitioned raw materials included SAR 5,000 of indirect materials.<\/p>\n<p>Required:<\/p>\n<p>Prepare journal entries to record the purchase of materials and their use in production.<\/p>\n<p>Q3.ABC corporation applying normal costing system has provided the following data from its activity-based costing system as follows: (Amounts in SAR) \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0[3 Marks]<\/p>\n<p>&nbsp;<\/p>\n<table width=\"660\">\n<tbody>\n<tr>\n<td width=\"130\">Activities<\/p>\n<p>&nbsp;<\/td>\n<td width=\"130\">Estimated Overhead Costs<\/td>\n<td width=\"130\">Expected Cost Drivers Quantities<\/td>\n<td width=\"270\">Cost Drivers<\/td>\n<\/tr>\n<tr>\n<td width=\"130\">Assembly<\/td>\n<td width=\"130\">120,500<\/td>\n<td width=\"130\">10,000<\/td>\n<td width=\"270\">Number of Machine Hours<\/td>\n<\/tr>\n<tr>\n<td width=\"130\">Processing Orders<\/td>\n<td width=\"130\">80,500<\/td>\n<td width=\"130\">7,000<\/td>\n<td width=\"270\">Number of Orders<\/td>\n<\/tr>\n<tr>\n<td width=\"130\">Inspection<\/td>\n<td width=\"130\">75,500<\/td>\n<td width=\"130\">5,000<\/td>\n<td width=\"270\">Number of Inspection Hours<\/p>\n<p>&nbsp;<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<table width=\"660\">\n<tbody>\n<tr>\n<td width=\"130\">Total<\/td>\n<td width=\"130\">276,000<\/td>\n<td width=\"130\">22,000<\/td>\n<td width=\"270\">&nbsp;<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Actual Data concerning the company&#8217;s product X appears below:<\/p>\n<p>Annual unit production and sales 500 units<\/p>\n<p>Annual machine hours 5,000<\/p>\n<p>Annual number of orders\u00a0\u00a0 4,500<\/p>\n<p>Annual inspection hours 3,000<\/p>\n<p>Direct material cost\u00a0\u00a0 150 per unit<\/p>\n<p>Direct labor cost\u00a0\u00a0 100\u00a0\u00a0\u00a0 per unit<\/p>\n<p>Required:<\/p>\n<p>Compute total costs per unit for the product X\u00a0\u00a0 using activity-based costing system<\/p>\n<p><center><a href=\"http:\/\/onlineclassesguru.com\/orders\/ordernow\"><img decoding=\"async\" src=\"https:\/\/encrypted-tbn0.gstatic.com\/images?q=tbn:ANd9GcTyj99p60XCLyLk1htB7-1neRt8-2QdnenNlQ&usqp=CAU\"target=\"_http:\/\/onlineclassesguru.com\/orders\/ordernow\"\/><\/center><p>","protected":false},"excerpt":{"rendered":"<p>Assignment Question(s): &nbsp; Q1. Explain how work the Activity-Based Costing (ABC), what is the challenge and how we can resolve it? Q2.During June, Mushrif Corporation purchased SAR 76,000 of raw materials on credit to add to its raw materials inventory. A total of SAR 81,000 of raw materials was requisitioned from the storeroom for use&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2523","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v17.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Activity Based Costing Method - onlineclassesguru<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/onlineclassesguru.com\/index.php\/2020\/10\/30\/activity-based-costing-method\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Activity Based Costing Method - onlineclassesguru\" \/>\n<meta property=\"og:description\" content=\"Assignment Question(s): &nbsp; Q1. 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