Questions -
1. Discuss the importance of accurate product costing. In your discussion you should highlight the problems associated with using traditional costing system which Beztec has been using.
2. Calculate the cost driver rates for the various activities identified in the activity-based costing (ABC) system.
3. Calculate the cost of each model under activity based costing.
4. Complete a profitability analysis by calculating the gross profit and gross profit percentage per unit for both models under ABC system.
5. Advise Smith on how she should respond to Kay's suggestion that she alter the costs produced by the ABC system. You should discuss APES 110 Code of Ethics for Professional Accountants.
6. Using a predetermined overhead rate to allocate overhead cost will most probably result in over/under allocation of overhead coats. Explain why this may happen and three ways to dispose the amount of over/under applied overhead costs.