Ans to the Quo No- 4 The reason that ackivity besed costing is most likely “‘undeceptale fore, extenral Rnondod repacdico, and because 1+ dees not ALign “i4selP with te Stomdards of GAAP. AGA | imeludds Honmarutae bur Costs ond exeludes Boma, manud Ura, Qosts: Aico dats in®rmekton is not veriFable, oxyective ete. AG2 is thot extercnol mupertivg must be based an traditional, absorption costing mothods, Absonptton Coss requis He traditteral division behoesy Produb costs arc period Costs, Ars. rust KC met, produce results that differ Frey tnose requlred under gertroliy accepted acgounh Prnelple COAAP) » Thenfornn, ABC, is usually vied / aS supplemental jy. anakure TW te used Be ins results diPRre Tmaderdally from absorption y el Qpmponis dent use, ABE costing Brew exteurad | taperd Tare! ore avimber of PHOSONS FAT thie-First, externol reports ora “bess detailed than intermad ropords prepared fore decision sabi On tle externa® repords , Pndividuad prreduck eosts, are not ip no breakdown af twse accounts ba Product: DF some prroduct ans undor-eosed and lSorme aret Ovet-costed, He enpons tend to conest Fodtex when the produek costs ara aclod tyqotnut [Seeond, J+ olen verge PEioudt alah changes im company's account The. oficlol cast | Aceaum: gysiem, in mesh lange eompanies art | Mealy embedded in complex compubar Presa. [That haus bea modifled m- house Ouse KUe corse! Mego yeas. Fis extroamly dieu +o moke Chorges In suche complter, prrepromes without cosirg nuymnecous bugs. Third, am Ate Costing. gem | ‘dees Not confocmste Beret eaeepted accounting, prune! ples (AAR), "Product cost computed Gr Kstemod reports PrUposes must Include, Songe Non - Manufeedund desis. oy Ps Possible +o Vadgust te ABO iy cone end of! tue pertod do amr to (AAP bude i+ reqaires mone work.Foutdh, te auditens ane Vkeky to be uncem Sriable With allocation Whed-are ‘based on miervievog with THe Com poms personrel Such objective dalla eon bo. easily manipiladed B45 management to make m Carnings ‘avd gion ka Y yordabtes look mona favorable Ans +6 the ayaa 0 = 2: DifRrenea Between Tradibonal Costing. Amd Aekvity Bases Costing. The difenence, between traditional outing ond CANN based costing. Te as BK llowss BR OF | TadiHionad Costing [Achy rem cecking. Traditional costing ts tho The activity based costing. allocation of -factony over~ tag | ‘ge ae sig Mennines head +o products bas& onqeWhi cUses on actives ‘ Performed to Prieduet Prte: SE es Ce amas Nee eae PN WW. ansts ane Hirst AnaGdd to activites and ton Treaditionad. Costing. system ABE eystem acetmuates Laceumulates costs) nto” eocts ato ackivity cost aaa fecility - wise Orca pas Pools: These a designad to o [Cot pools The eacts incach @ myLetpand ty Paper ac — COS Pools orca haherrageneous=HiVvihes 4 Lustre S eee; are easts oF mony apn Baydesing, tux costs in Preceess ond gor Ou nstecch emt prol ace. bro? caused by Ae ae casued by Monae’ , we eat vu wart.Ailocoction, Bases Hierachy of @osts Gost Obgects Decision Support Cost control | @ostt | qustene \ Trad 6 costs Traditiorad system ARG sysiem’ allocates ¢ | uloestailinels 13, reabes. rrelete, Srcts ee usit Lume- based al\o- from y Gale Care suerte, drat: CoS ans itocatien “} labore, inpak Machine haus oe coceasranlng dua eae dost dniverts oF activity tools The costirg gener ABC. allows for non - li necnit eGtimakes all He costs oP oF ests witnin Ake oxgore any onganizadion te berg by expiieity tweognbe trah | draven ky tte volume of some casts ic not aaused by” Priodupt ore services delivers dye mudmboc oFunits producad | Tradtionad, Costing * ABE foeuses on estimating 1 Reuses on cotimatig the costs oF many cost “| HL aestoF avingle Cost Odgects of IMeeS+ | units, | Obgeet tres unit shprodet batches, product ines, buses, on serviee: preoeesses, Gustomets and | A » Suppliers: j Geaguse’oF tra ability Because of He ability to | Ae align atlecation base€ align allocation base wir Hh eoskdidivens, Leads Gost druore, pridviles more | to tue problems of over aceurate miSnmalion to Gaisting aind cardiac Costig Cuppa man agerdal di cisions OF Qosts + Gost Gonnol is viewed RY provid ira, summery cosh Oe adepoctmental oF tur orgenlzadiorall exorsize prator thoma activites, ARG allows Wr Gross Functional eFFord: Ptah zabley of cost Momagemnmt ofRects. TreodiHonog costing + hie We Pe eae _expensiva te implement Trnphement and maintain One maintainTrcoutHonod eccting is Activity based eas Suitable fon laberr intershe system iC oe ike Soe OMA, lato Ouenead compantes oar eae yale Suilebi lity, diverse set of opereding ackivitiys vevcladten iq numsb4s oF produchlon TWNS Algh overhead eompanis: Only Ho types aF actives All levels oF activides in Vi2. Unit Level Aetivities He monuactuirg cost Types OP and Re wlRiby Lave} hienoely vias Unt Level, Activites, Activities aro Gderti Red. eae level, Product Level and feat Level one Identi FredCash budget te usally prea paral month wise, budget penid “ belrg a qvanter, or hol oF a year D4 \san| estemates: OF Gash flows during, arnonth fo we | ue oalanee “at He evd of C20 more: Te main putrpase iS cash management to matoh yua raepits | and to have. a desired Surepss, at wa end oF each | |monthy SP Hf is Seon that We payments of > Porcticuls monircould nob be met woth }Le possible fueepits, [buctgé Fells you suAReteney Tr advonee, by a ragadve, quit talth hod extra nds Will have te be oreased hr Hue yoo, otheruoise 1 used runwebely, Hue word be is ash ot Hue nerd Mor © company aoe A eash budgel details a company’s cosh inPlou dusung « speciRed budget . Pertod , Gueh 45a mort quoter or year, its pnt < ; primany fC te Provide. Wwe Status oF the Company's postion oc ony pot of Fie. Not tre aash > oS EOS becouse we howe meconatlting Heme fry aay bank Os deposit in Aransit omd “gutstending ea| 4D Allocation of Overhead apsts s- Bircel [oboe Pree ing: seeterec Other | tat Wages ond TK 4925000 TK 106000 1K +0000 452500 TH5De: Sakercles Other overhead ganas 20000 ¥0000 40000 2.00000 Costs | Tefal Tk 192500 K1esc0o Te 4570000 |Tea2500 T5500 | a WD Activity odes: Alvi Cock pos! Tyla coe Ololactiity ergpetivity Breet and cuppont TK ip 2600 5000 Tk Sb pec labore Onder Processing Th 125060 Yoo Ke -5— | | Perc ordore “Customen cupponk This 0000 ‘480 edsou Mai | 4 ng fren custome, |ti) @® Aetivity cost pool Ael¥vity. Roles Diroot labore eupport ay a6. Ondox prosesirg te B79. 5 Customer support Th 4560 Customex Margin = Seem ea | Sales Revenue (C2006 295K) Oost § [Direct Mecosctal oe x 2¢y Tk) Tk 52800 |Direet labour. aayan \(200%-B K25) Overchend Cost ACZ ® @ry) Aetivity AOE Cost 460 Th S650 C2.00%0-6) (loox 26-5) a W120 4 Th 1500 TVetal “ tK5 G0 5 Tk 4000 A462 5 Customs Mangin —_____—WyggSece TES9) Surabere Corporation soles Budget Quarger, a 2 3 i Badoeted tot) 48000 | 15000 |46000 414000 46000 Sale. | i Selling price. 4 29 | G22 | $22 "eon |g22 Pere Unt | | | | Total sales € 390000 | § B260n|4 22000 Rianon 94452! Schedule oF Expected cosh coileetion ye Acsoulinacivs) @ £6600 j 2 — Ceginirg alone 4ccoo | | At omartor a PETER 5 ; | es af 4 3pb000x roy) 214200 ae 35a 0) | and quotient ‘@axoveorzery, re lati (salo (838000 209 221000 coop at} —— i | | (Sad aynecter 625 R000K% aE ee i — = f 1 |SiE0o eras) : year Grey i comme ct 26/800 2Ci R00 my gos “ee%0 131626 5 Ae 2 bog 312400 P2200 412 O001! Gipobor Comporodir, Frooduction Gudget : Cvarctoc 4 EX = 4 | Bear. eo baal “48000 45000 40000 A000 CLo00° {0200 oo) S400 3400 j2O420 oy400 Ceginirg } G20. | peat fo © )B 000 Lewes ee? 5200 | oo aera | a) ay 2 Requirud priadkation 47.800 » | £885 awa 24,209 ‘Lt000 £6200 in Units - job t {6-1) Coleuladirg Usit preoduck pct ¢ pi Sear Direct Mecterclal | TK 2g Direct labor, | s | ; Varubble Monufochire Ovenhond + y | Vantable doch} ib 7 19 Unit Product each bevy ANSE : baaaosy E dealt bpxi, Sear, 9 fales (: 8000 Xen) i WTAE Z0 6 on Variable experses e poor |Vardoie cost of Qoods Sold (, 28000%40) 1420,000 Vardae selting ond) Admin. es Exp (28000 xé) eee | 1650006 Contribution Moscain ae ea ooh 'Pixed expenses ¢ i | ones agp Beer Omerthoad ie 16.00 cog Fixed Gellirg amd Admin | leper | 1%9000 r ~ —— 4 Ned operating troermne, K_2892,005 ——atl) TH Abosnetion Coeding . Pixed Tmanfacturdrg overhead Cost = (ih120000 + 40,000) > Th 8S par unit Raeoncibtion § wf Seon, Vardable Coctmg Net je TR Opemating. Freame 8D2000 Add Fixed Manufecluruing. OH Cost dePersed iy ventory Unda Adsorption (2o00r 523) ; TSE S Absorption costing, Net } cpenalicg. dnecre “TK gence