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Corporation owns a small printing press that prints leaflets, brochures, and advertising materials. Digiprint classifies its various printing jobs as standard jobs or special jobs.
Corporation owns a small printing press that prints leaflets, brochures, and advertising materials. Digiprint classifies its various printing jobs as standard jobs or special jobs.
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To see how activitybased costing would affect the costs of standard and special jobs, Digiprint collects the following information for the fiscal year that just ended. Requirement Calculate the cost of a standard job and a special job under the activitybased costing system.
except Administration; round Administration to five decimal places, XXXXXX More info
Digiprint's simple jobcosting system has two directcost categories direct materials and direct labor
and a single indirectcost pool. Digiprint operates at capacity and allocates all indirect costs using
printing machinehours as the allocation base. Digiprint is concerned about the accuracy of the costs
assigned to standard and special jobs and therefore is planning to implement an activitybased costing
system. Digiprint's ABC system would have the same directcost categories as its simple costing
system. However, instead of a single indirectcost pool there would now be six categories for assigning
indirect costs: design, purchasing, setup, printing machine operations, marketing, and administration.
Data table tableABC Costing System,tableStandardJobtableSpecialJobCost of supplies,Direct manufacturing labor costs,,Indirect costs allocated:,,Machine operations,,SetupsPurchase orders,,DesignMarketingAdministrationTotal costs,,Cost of each job,, Requirement Compare the costs of a standard job and a special job in requiremente
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