Question
Help on activity-based costing (ABC)! I don't know how to solve these practice questions... These questions are only based on the activity based costing... Q1
Help on activity-based costing (ABC)! I don't know how to solve these practice questions...
These questions are only based on the activity based costing...
Q1
Joetows Company manufactures and sells two Models of Laser Photocopy Machines, P1 and P2. It sells P1 for $2,000 and P2 for $2,500 each. According to the marketing department's report, the sales agents sell P2 very quickly but struggle to sell any P1. They have invited a management accountant consultant to review their current costing and pricing policies. The management accountant consultant recommends reducing the sale price of P1 and increasing the sale price of P2. The company currently uses traditional costing systems. It used the number of productions to allocate overhead costs. Using traditional absorption costing and activity-based costing (ABC) to determine, the accurate production costs for these two products and express your view regarding therecommendation made by the consultant. The available information concerning the last month's operations appears below: From the centre's management information system, you extract the following information on activities, costs, and activity drivers for the current period: