211 Midterm Spring 2018 Compatibility Mode Leyout References Mailings Review Vie

Question

211 Midterm Spring 2018 Compatibility Mode Leyout References Mailings Review View HelpTell me what you want to do 12 ?,A-? | aBbCl AaBbC AaBbCcl AaBbCel AaBbCcD Emphasis Heading 1 Normal Strong Subtitie .15-2-.-. Paragraph Styles 0. Describe a difference between traditional cost systems and ABC cost systems 21. Match the activities to the appropriate level they are grouped in: L. processing purchase orders 2 design new products 3. hire a new employee 4. process a unit in the manufactaring process Engish United State ip 48 5 0 ?bodspoce

Explanation / Answer

Q20. Under traditional costing, the overhead cost incurred is allocated on the basis of one pre-determined overhead rate which may be based on labour hours, machine hours and labour cost, etc. Then the OH allocated to products on the basis of actual Machine hours or labour hours, etcc used in the production of products.

However, Under Absorption costing, the firstly overheads are apportioned among the activities recognized as material in the production process. Then the activity rate is determined after deciding the cost driver of each activity. Then the overheads are allocated to products on the basis of cost drivers consumed during the production.

Q21.

1. Processing Purchase order: d. Batch level

2. Design new products: c. Product level.

3. Hire a new employee: a. organisational sustaining

4. Process a unit in manufacturing: b Unit level

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