Differentiate with suitable examples the traditional costing systems and activity-based costing. Explain how ABC is used inmanufacturing by providing a numerical example.

Accounting Question

Q1. Differentiate with suitable examples the traditional costing systems and activity-based costing. Explain how ABC is used inmanufacturing by providing a numerical example.

Q2. RCR has two support departments, X1 and X2, and two operating departments, Z1 and Z2. RCR has decided to use the direct method and allocate variable X1 dept. costs based on the number of transactions and fixed X1 dept. costs based on the number of employees. X2 dept. variable costs will be allocated based on the number of service requests and fixed costs will be allocated based on the number of computers. The following information is provided:

Q3. Provide a numerical example of special order decisions and make or buy decisions and explain how these decisions are backed by quantitative and qualitative considerations.

Q4. K&C Ltd. is working on a budget for the current year. The following information is linked to budget preparation: