Intended learning outcomes: Differentiate between job-order costing and activity-based costing, extending the results of the two preceding exercises.
a. Why is the cost per unit produced in the conventional job order costing exercise 16.7.1 ($4.75) exactly the mean of the costs per unit of the two products in the ABC exercise 16.7.2 ($4.30 and $5.20)?
b. What product pricing considerations would you take into account on the basis of the results when calculating manufacturing costs by ABC?
c. Would a change of the batch size (40 in both exercises) imply different results? Is this generally the case in the world of practice? What assumption made in the problem description for the sake of simplicity led to the special case of the two exercises?
Course section 16.7: Subsections and their intended learning outcomes
16.7 Scenarios and Exercises
Intended learning outcomes: Elaborate job-order costing and activity-based costing using an example. Compare job-order costing and activity-based costing.
16.7.1 Exercise: Job-Order Costing
Intended learning outcomes: Calculate the cost accumulation for two products, given the material consumption as well as the standard time for the operations and the fixed and variable costs of two work centers. Explain the graphical representation of the cost accumulation.
16.7.2 Exercise: Activity-Based Costing
Intended learning outcomes: Calculate the cost accumulation for two products, given the material consumption as well as the standard time for the operations and the fixed and variable costs of two work centers, differentiating the fixed costs between investitures in machines and in in tools and devices.
16.7.3 Scenario: Comparing Job-Order Costing and Activity-Based Costing
Intended learning outcomes: Differentiate between job-order costing and activity-based costing, extending the results of the two preceding exercises.
