Hi, I have an assignment for COST ACCOUNTING, i have included as much information as possible Final Project II Milestone One: Budgets Instructions To complete this assignment, review the prompt and g

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I have an assignment for COST ACCOUNTING, i  have included as much information as possible

Final Project II Milestone One: Budgets

Instructions

To complete this assignment, review the prompt and grading rubric in the Milestone One Guidelines and Rubric document. When you have finished your work, submit the assignment here for grading and instructor feedback.

Textbook: Horngren’s Cost Accounting: A Managerial Approach, Chapter 9Chapter 9 introduces three inventory costing methods: variable inventory costing, absorption inventory costing, and throughput inventory costing. The authors present the benefits and drawbacks of each method, with special emphasis on the potential for abuses by managers when using absorption inventory costing, and options for dealing with that problem. The second part of the chapter focuses on four alternatives for determining capacity for budget purposes, and it explains why different alternatives are suitable depending on the purpose of the information. The chapter highlights how both the choice of inventory costing method and the method of determining capacity impact fixed costs and operating income.

  • What is the difference between variable inventory costing and absorption inventory costing? How is each calculated?
  • What are the benefits of absorption costing? What are the drawbacks of absorption costing? Why might managers build up excessive inventory when using absorption costing? How can companies combat this practice?
  • How is throughput inventory costing different from variable inventory costing and absorption inventory costing? Why is throughput costing advocated?
  • What are the four alternative denominator fixed-cost capacity levels used in absorption costing? How does each impact cost per unit?
  • Why are different alternatives for calculating capacity level used for different purposes?

Access this resource by going to the My Accounting Lab area under the course Table of Contents menu.

Final Project II Student WorkbookUse this workbook to complete Final Project II Milestone One. Be sure to complete all relevant tabs for the milestone.

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