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Bridgteon Industries cost accounting system

Essay specific features

 

Issue:

Business

 

Written by:

Heather B

 

Date added:

December 4, 2015

 

Level:

University

 

Grade:

A

 

No of pages / words:

4 / 989

 

Was viewed:

5573 times

 

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Essay content:

The consulting company used 435% of direct labor costs in 1987 for their study; the budgeted was actually 437% (OH/DL=107,954/24,682). A similar percentage applies in the following year (109890/25294=434.5%). However in the next two years, after the outsourcing of oil pans and mufflers was enacted, the allocation of overhead increased to 577% (78,157/13,537) in 1989 and 563% (79,393/14,102) in 1990...
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Overhead decreased by approximately $30,000 due to the outsourcing, and direct labor decreased by approximately $12,000. The changed rates are due to the fact that the overhead reported in the accounts is not based solely on variable labor, but rather has other (including fixed) components. It is difficult to predict without more detailed accounting numbers and without interview employees exactly which of the overhead costs are fixed and which are variable, as well as which account is mixed...
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General issues of this essay:
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