Managerial Accounting

Discussion Question 1

Assess this statement: “Activity-based costing is only useful for manufacturing companies”. Do you agree or disagree, why?

Discussion Question 2

It is fairly straight forward to combine process costing and activity-based costing in one statement. Is it possible to combine job order costing, process costing, and activity-based costing in one statement? If so, please provide an example.

The period manufacturing costs of a company is comprised of $2,000,000 in direct materials, $1,000,000 in direct labor, and $500,000 in overhead, resulting in 7,000 units of product. Manufacturing operations consists of two processes, machining and assembly. Machining takes up 40% of direct materials, 60% of direct labor, and 50% of overhead. Provide a hybrid manufacturing cost statement, containing combined activity-based costing and process costing.

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