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1. What business decisions at Seligram does the follow ashes support? In this context, what caused the existing cost arranging at Seligram (ETO) to fail? In general, a cost system supports the pricing decisions of the firm. ETO’s existing cost system contains nevertheless one cost center (the entire facility). All hit is collected into a single cost pool, and the total belt cost is divided by the total number of strike drive dollars desolated to give a single direct promote dollar burden rate. The major flaw in ETO’s existing system is that it assumes that all products consume direct labor and overhead in the same proportion. However, some products are produced on simple labor intensive equipment while others require in truth valuable automated equipment. Therefore, it is extremely unlikely that all products consume direct labor and overhead in the same proportion. As testing processes become more complicated, they require more expensive equipment and less labor-intensive equipment, which means that the proportion of costs callable to overhead is increasing while the proportion of costs repayable to direct labor is decreasing. This caused the existing cost system to fail. 2. train the reported costs of the five components described in border 6 under the three systems. 2a.
Costs Under The be arranging: One Center System Product ICA ICB capacitance Amplifier Diode Direct Labor $ 917 2051 1094 525 519 bang @ 145% 1330 2974 1586 761 753 come up 2247 5025 2680 1286 1272
2b. Costs Under The Proposed System from the Accounting Manager: both Center System Product Direct Labor $ 917 2051 1094 525 519 Overhead $ Overhead (Machine Hrs.) (18.5) (40.0) (7.5) (5.0) (12.0) Overhead (Direct Labor $) 183 410 219 105 104 Total
ICA ICB Capacitor Amplifier Diode
1480 3200 600 four hundred 960
2580 5661 1913 1030 1583
Answer Key for Seligram, Inc.
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2c. Costs Under The Proposed System from the Consultant: Three Center System...If you want to get a full essay, order it on our website: Orderessay
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