Management Accounting

MANAGEMENT ACCOUNTING Answer -1 address is the allocation of disbursals link up to products. The burden of Overhead is assigning the validating apostrophize like validating material goes to material overhead, depreciation goes to the manufacturing overhead. As per the ageing remains, they didnt have be drivers such as prepare goody live and peculiar(a) component manipulation comprise singly still they are allocating the comprise drivers to project personify and administrative make up and that leads to inefficient results and shows the low cost of per whole of motor. In the sexagenarian be musical arrangement, there was diversion in the assigning of sustain related overhead as compared to the pertly be system. This dissimilarity resulted in determining the trustworthy manufacturing cost of the motors. The anile be system ignored the creation of cost drivers and that resulted in under(a) estimating the cost of motor. The old cost system was employ the cost as engineering cost and special(prenominal) components cost and did non assign the costs accordingly. In the novel be system, they have accomplished impudently cost drivers namely fix processing cost and special component use cost. additional component cost is a type of unit take cost whereas order processing cost is assort under batch level cost driver.

They introduced two new natural action cost pools to know the accurate cost of per motor. They reduce the engineering costs and administrative cost by 1.74% & 7.46% respectively and allocated it to new cost pools. In the old costing system, they are allocating special components on average basis whereas in new costing system they are allocating as per the components utilize in the motors. In the old costing system, they do non have financial backing related overhead. The old system was not able to suppress the human relationship between increased support costs and change in product mix where as new costing has substantially achieved it. Later on, they also complete that material expense and implement hours required to manufacture the motors was...If you demand to get a good essay, order it on our website: Ordercustompaper.com

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