ACTIVITY-BASED COSTING AND EFFECTIVE COMMUNICATION.

In your initial post, imagine that you are a business manager. Your board of directors has requested that you report on the significance and impact of utilizing activity-based costing (ABC) over a single plant-wide predetermined overhead rate (POHR). Using your required readings this week, you will create a brief presentation for your investors analyzing the pros and cons of using ABC, including a comparison of at least two of the activity rates versus the single plant-wide POHR with calculations.

Here is the relevant information you need:

The product that you produce requires four different activities to complete.

Save your time - order a paper!

Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlines

Order Paper Now

The single plant-wide POHR is $25 per unit, and we produced 10,000 units.

Activity 1: Design Team – The estimated time spent on new ideas is 15,000 hours; we have 4 members of the design team that are paid $40,000 each.

Activity 2: Production Team – The estimated time spent producing the item is 30,000 hours, with 100,000 machine hours with associated costs of $150,000, and we have 8 employees who work 40 hours a week, 52 weeks a year, and they are paid $12 an hour.

Activity 3: Finishing Team – The estimated time spent finishing the product is 15,600 hours, with 20,000 machine hours with associated costs of $75,000, and we have 10 employees who work 30 hours a week each and are paid $20 an hour.

Activity 4: Quality Inspections – There are 200 estimated inspections; we have 2 inspectors with an annual salary of $75,000.

 
"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"