Explain the general process of how an activity-based cost

Question

1. What provisions of GAAP (viz., FASB ASC 330-10-30, previously SFAS No. 151-available at www. asc.fasb.org) pertain to the issue of end-of-period disposition of overhead variances? Be specific.

2. Explain the general process of how an activity-based cost (ABC) system can be used to manage organizational spending on resource capacity.

3. How does the analysis of overhead variances differ for companies using a traditional cost system versus an ABC system?

4. Explain two available treatments for disposing of overhead variances at the end of a period.

5. What factors should be considered in determining whether or not to investigate a variance?

Answer 1

For the following Accounting problems illustrated below; respond to all questions using MLA formatting. Problem 1: Illustrate the provisions of GAAP (that is, FASB ASC 330-10-30, formerly SFAS No. 151-available at www. asc.fasb.org) relate to the issue of end-of-period disposition of the overhead variances? Be particular. Problem 2: Describe the general procedure of how an activity-based cost (ABC) system can be employed to manage the organizational spending on resource capacity. Problem 3: Explain how does the analysis of overhead variances distinct for companies employing a traditional cost system versus the ABC system? Problem 4: Describe two available treatments for disposing of overhead variances at the end of the period. Problem 5: What factors must be considered in determining whether or not to investigate the variance?