0
What else can I help you with?
What is departmentalisation of overhead?
Departmentalisation of overhead means allocation of overhead cost base on predertmined rate in case of absorption method and based in activities in case of activity based costing.
Why is overhead allocation under ABC usually more accurate than either the plantwide overhead allocation method or the departmental overhead allocation method?
Because in ABC costing overheads are allocated based on activities performed by departments rather based on any rate or formula that's why as much activity any department perform as much cost will be allocated which is more accurate way of allocation.
Why activity based costing?
Activity based costing allocate the overhead expenses based on activities performed and that's why it is an accurate way to allocate overhead expenses while in absorption costing, overheads are allocated based on some ratios or predetermined rate which is not accurate method of allocation of cost.
What are the inadequacies of traditional method of overhead absorption?
Traditional overhead absorption methods often allocate overhead costs based on a single metric, such as direct labor hours or machine hours, which can lead to inaccurate cost assignments. This approach fails to account for the complexity of modern production environments where multiple activities drive overhead costs. Consequently, it can result in distorted product costs, misinformed pricing strategies, and suboptimal resource allocation. Additionally, it may not reflect the actual consumption of resources by different products or services.
What is the difference between Activity-based costing and traditional cost accounting?
Activity-based costing is a more accurate cost management system than TCA. One would use the ABC method when overhead is high, products are diverse, cost of errors high and competition is stiff. Traditional Cost Accounting is unable to calculate the 'true' cost of the product. TCA arbitrarily allocates overhead to the costs of objects. Total company's overhead is allocated to the products based on volume based measure e.g. labor hours, machine hours.
What is departmentalisation of overhead?
Departmentalisation of overhead means allocation of overhead cost base on predertmined rate in case of absorption method and based in activities in case of activity based costing.
Why is overhead allocation under ABC usually more accurate than either the plantwide overhead allocation method or the departmental overhead allocation method?
Because in ABC costing overheads are allocated based on activities performed by departments rather based on any rate or formula that's why as much activity any department perform as much cost will be allocated which is more accurate way of allocation.
Why activity based costing?
Activity based costing allocate the overhead expenses based on activities performed and that's why it is an accurate way to allocate overhead expenses while in absorption costing, overheads are allocated based on some ratios or predetermined rate which is not accurate method of allocation of cost.
Why molarity not based on the volume of solvent alone?
Molarity is based on the total volume of the solution (solvent + solute), because the concentration of a solution is defined as the amount of solute dissolved in a given volume of the solution. By considering the total volume, we can accurately determine the concentration of the solute in the solution.
One key responsibility of Multiagency Coordination Systems is to?
Make resource allocation decisions based on incident priorites
What are the inadequacies of traditional method of overhead absorption?
Traditional overhead absorption methods often allocate overhead costs based on a single metric, such as direct labor hours or machine hours, which can lead to inaccurate cost assignments. This approach fails to account for the complexity of modern production environments where multiple activities drive overhead costs. Consequently, it can result in distorted product costs, misinformed pricing strategies, and suboptimal resource allocation. Additionally, it may not reflect the actual consumption of resources by different products or services.
What is the full form of FAT in terms of Computers?
FAT is a file system used by MS-DOS and other Windows-based operating systems to organize and manage files. The file allocation table (FAT) is a data structure that Windows creates when you format a volume by using the FAT or FAT32 file systems. Windows stores information about each file in the FAT so that it can retrieve the file later.
What is the difference between Activity-based costing and traditional cost accounting?
Activity-based costing is a more accurate cost management system than TCA. One would use the ABC method when overhead is high, products are diverse, cost of errors high and competition is stiff. Traditional Cost Accounting is unable to calculate the 'true' cost of the product. TCA arbitrarily allocates overhead to the costs of objects. Total company's overhead is allocated to the products based on volume based measure e.g. labor hours, machine hours.
Is Overhead allocated using a percentage-based or quantity-based price?
Overhead can be allocated using either a percentage-based or quantity-based method, depending on the costing system in place. In a percentage-based approach, overhead is applied as a percentage of direct costs, such as direct labor or materials. In contrast, a quantity-based method allocates overhead based on a specific activity level, such as machine hours or units produced. The choice of method typically reflects the nature of production and the business’s accounting practices.
How do you compute predetermined overhead rate as a percentage of direct labor costs and direct labor hours?
Predetermined overhead rate based on direct labor cost = Budgeted overhead cost / direct labor cost / 100 Predetermined overhead rate based on direct labor cost = budgeted overhead cost / direct labor hours.
The difference between variable factory overhead incurred and total standard variable factory overhead based on the actual quantity of the cost driver for applying the overhead is the?
cheatFAIL
What are the best practices for overhead allocation?
The best method for allocating overhead in construction is a way that's fair. After all, the idea is to allocate (or, distribute) costs that each job shares responsibility for — meaning the job either caused or benefited from the cost The plantwide and department allocation methods are “traditional” approaches because both typically use direct labor hours, direct labor costs, or machine hours as the allocation base, and both were used prior to the creation of activity-based costing in the 1980s.
