Quality Control Cost-Free-Samples for Students-Myassignmenthelp

Questions: 1.Calculate the monthly quality control cost to be assigned to the Satin Sheen product line under each of the following approaches:a.Conventional system which assigns overhead on the basis of direct labor costs.b.Activity-based costing.2.Does the conventional product costing system over cost or under cost the Satin Sheen product line with respect to quality-control costs? By what amount and why? Answers: a.Calculation of the monthly quality control cost to be assigned to the Satin Sheen product line using the conventional system of costing Monthly direct labor cost for Satin Sheen make-up is $ 98,000.00 Quality cost per month as percent of direct labour cost 16% Quality Control cost as per conventional system of costing $ 15,680.00 b.Calculation of the monthly quality control cost to be assigned to the Satin Sheen product line using the conventional system of costing Calculation of quality Cost as ABC Costing Activity Cost Driver Cost Rates Quantity for Satin Sheet Incoming Material Type of Material Inspection $ 23.00 24 types In-process inspection Number of units $0.28 per unit 35000 units Product certification Pre-order $144 per order 50 orders Total Quality cost as ABC Costing $ 17,552.00 2.Conventional product costing system is under-cost the Satin Sheen product line with respect to quality-control costs by $1872.00 (17552.00-15680.00). It is because in conventional system of costing overhead costs are distributed using the machine hour or labor hour applied in the particular product while in ABC costing, overhead costs are distributed using the actual activity applied in performing the particular work in relation to the desired output product. In the above case the activity involved for the quality inspection is much more than as estimated through labor hr rate method.