ACG 2071 Lecture Notes - Lecture 6: Cost Driver
12 Sep 2018
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Cogs = (beg fg + cogm) end fg. Beg fg + cogm is the pool of fg costs (previous year + current year) either sold or unsold at end of year. Cogm = (beg wip + manufacturing costs incurred) end wip. Beg wip + manuf. costs incurred is the pool of wip costs (previous year + current year) Manuf. costs incurred = dm used + dl used + moh allocated. Dm used = (beg rm + purchases) end rm. Overview of chapter 4: tools managers use to make company more competitive, activity-based costing, costs of quality reports. Moh rate(plantwide) = [estimated total annual moh costs / estimated total annual units of allocation base] Traditional approach: single plantwide allocation rate: provides reasonably accurate costs allocations if company, produces limited variety of similar products, and, single factor (ex. Dl hours) is primary driver of moh costs.
