Cost Accouting Course. PLease don\'t copy the answer from somewhere else, I need
ID: 2512759 • Letter: C
Question
Cost Accouting Course. PLease don't copy the answer from somewhere else, I need a unique answer to avoid plagiarism?.
XYZ Corporation is producing product A. The company had problems related to quality. Customers have been returning the product in the last months.
ABC costing method and ABM can be used to manage quality.
a. Define each type of quality-related activity and give one example of each activity type.
b. Suppose the managers implement an ABC system to measure the costs of quality. How could they use information from this system to improve the product?
Explanation / Answer
a.Activity Based Costing : It is an alternative method of overhead absorption.costs are grouped according to activities instead of cost centre.
Activity involved
Use of indirect materials
Inspection or testing
Designing of the product
Advertising of individual products rather than company's name.
Plant Security
Ground maintenance
Production Manager's salary
b. To improve product the following steps can be cosidered:
Type of Activity Examples Unit level activityities: Theses are the activities for which consumption of resources can be identified with the number of units produced.Use of indirect materials
Inspection or testing
Batch Level Activities : These activities are driven by the number of batches odf units produced inspection of products where the furst item in the every batch is inspected. Prodect Level Activities : These activities driven by the creation os n new product line its maintenance.Designing of the product
Advertising of individual products rather than company's name.
Facility Level Activities : These activities are necessary for sustaining the manufacturing process & not directly related to individual products.Plant Security
Ground maintenance
Production Manager's salary