Activity Based Cost accounting system Math Problem

natural process Based Cost accounting system - Math trouble ExampleIn this case study, the supporting excel computations show that overhead using the traditional live accounting procedure resulted only P137,994.00 for Lever, P22,079.04 for jet, and finally P 16,559.28 for pump products. Total manufacturing greet also under the traditional or old fashioned greet accounting procedure resulted to the usual Direct Materials cost of the products P 510,000.00 for Lever, P163,200.00 for efflux, and P 139,200.00 for Pump. Another accounting cost for resulting from the traditional Cost Accounting procedure is the stock item Direct labor of P 2,160,000.00 for Lever, P163,200.00 for Spring and again P16,560.00 for Pump. The total manufacturing cost under the Traditional method is the sum of Direct Materials, Direct labor and Overhead. P2,807,994.00 for Lever, P348,479.04 for Spring, and finally P 172,319.28 for pump products. Under the Activity Based Costing, The first cost driver is c alled VOLUME DRIVER showing amount of P 286,000.00 for Lever, P45,760.00 for Spring and P 34,320.00 for Pump. Another driver in this systems is the PURCHASING DRIVER. The purchasing cost for Lever products is P 14,810,000.00 and P2,369,600 for Spring and, the last item, P 1,777,200.00 for Pump. The next driver is the SET UP driver. Set up driver cost are P 38,533,000.00 and P 6,165,280.00 for Spring and of course P 4,623,960.00 for the last item, Pump. The cost drivers are high than the total manufacturing cost of the traditional cost accounting system. In this new system, the cost factors can soft be traced to determine what the effects of these costs are to over all manufacturing operations. Some cost activities that forget not help in the manufacturing process but sometimes, their costs are included in the pulverization cost of production in error. The Purchasing cost driver will display if the inventory cost is too high or too low or even unnoticed thus affect the decision m aking process of management. Traditional Cost AccountingDirect MaterialsLever (100,000