ACTG 2020 Lecture Notes - Lecture 1: Soap, Activity-Based Costing, W. M. Keck Observatory
Document Summary
Ingrid is responsible for overseeing the costing and profitability analysis. Changes in the accounting system to reflect changes in the soap divison. Experiencing significant employees turnover, which resulted in increased expenses relataed to training new hires, slower processing time, and more soap quality control issues. As a result, the company implemented automation for soapmaking. Ingrid gathered data on two types of soap, one used in hospitals and one sold to hotels. Also collected data on amount of time each type of soap spends in three manufacturing processes: processing, finishing, and packaging, data represents average cost per 100g of soap. Follow case format, format is worth 10% of the exam. Breakdown the overhead into more specific sources of cost. Product sustaining cost: relates to the product line, ex: logo. Many costs are not unit level costs in business. Therefore using machine basis, or labour hours wouldn t result in accurate numbers.
