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http://jobview.monster.com/Senior-Accountant-Manager-Job-San-Juan-PR-US-130837373.aspx Questions and answers

1 . Below what circumstances is direct labor a legitimate basis pertaining to allocating cost to do business? Direct labor is a valid basis pertaining to allocating over head when: (a) direct labor constitutes a significant part of total product price, and (b) there is a excessive correlation between direct labor and modifications in our amount of overhead costs.

installment payments on your What features happened current industrial history to reduce the usefulness of direct labor as the library basis for allocating overhead to products? Lately in the industries, the amount of immediate labor in many sectors have been affected and greatly reduced as a result of advances in com -- computerized devices, to develop lifestyle technology, competition and overall automation. Total indirect costs resulting from the depreciation of expensive equipment and machinery, programs, repairs and maintenance have got increased significantly. Many businesses now use equipment hours as the basis on what to allocate overhead in automated production environment.

several. In an computerized manufacturing environment, what is foundation overhead allocating is frequently even more relevant than direct labor hours?

The foundation of portion of expenses is often with additional relevant, in numerous automated manufacturing environments, equipment hours is actually a more appropriate basis on which to allocate expenses.

4. Precisely what is generally the case about overhead allocation to high-volume products versus low-volume products within traditional costing system? When compared, under a costing system depending on the traditional quantity, where expenditure are allotted on the basis of models of production, high-volume product undoubtedly will absorb even more overhead compared to the low volume product.

your five. What are the key differences between activity based costing (ABC) and traditional product costing?

Activity-Based Costing

Classic Costing

Activities performed to make products...


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