Milan Pasta At its Lyle Avenue plant, Milan Pasta produces two types of pasta: spaghetti and fettuccine. The two pastas are produced on the same machines, with different settings and slightly different raw materials. The fettuccine, being a wider noodle and more susceptible to curling edges, requires more inspection time. The total daily cost of inspection is $500. Here are daily production data for the two products: 11eb559c_8466_069e_a8c8_9fb866c0c47a_SM1503_00 Required: a. Calculate the inspection cost per pound of pasta using traditional absorption costing with number of machine hours as the allocation base. b. Calculate the inspection cost per pound of pasta using activity-based costing. Assume inspection time is the cost driver. c. Analyze why inspection costs differ between the methods used in ( a ) and ( b ).

Accounting for Decision Making and Control 7th Edition by Jerold Zimmerman

النسخة 7الرقم المعياري الدولي: 978-0078136726

Accounting for Decision Making and Control 7th Edition by Jerold Zimmerman

النسخة 7الرقم المعياري الدولي: 978-0078136726

تمرين 19

Milan Pasta
At its Lyle Avenue plant, Milan Pasta produces two types of pasta: spaghetti and fettuccine. The two pastas are produced on the same machines, with different settings and slightly different raw materials. The fettuccine, being a wider noodle and more susceptible to curling edges, requires
more inspection time. The total daily cost of inspection is $500. Here are daily production data for the two products:

Required:
a. Calculate the inspection cost per pound of pasta using traditional absorption costing with number of machine hours as the allocation base.
b. Calculate the inspection cost per pound of pasta using activity-based costing. Assume inspection time is the cost driver.
c. Analyze why inspection costs differ between the methods used in ( a ) and ( b ).

التوضيح

موثّق

Absorption vs Activity Based Costing
Ab...