The auditor at the Yarn Shoppe needs to determine whether it is beneficial to implement a simple costing system using a single indirect-cost pool,or an ABC system.Review and compare the following information:

Required:
The goal of the accountant is to trace more costs as direct costs,create a homogeneous cost pool,and to implement a cost-allocation base that has a cause-and-effect relationship with costs in the cost pool.Which system should the auditor at the Yarn Shoppe implement? Why?

Question

The auditor at the Yarn Shoppe needs to determine whether it is beneficial to implement a simple costing system using a single indirect-cost pool,or an ABC system.Review and compare the following information:
  
Required:
The goal of the accountant is to trace more costs as direct costs,create a homogeneous cost pool,and to implement a cost-allocation base that has a cause-and-effect relationship with costs in the cost pool.Which system should the auditor at the Yarn Shoppe implement? Why?

Quizplus · Accepted Answer

The Answer of The auditor at the Yarn Shoppe needs to determine whether it is beneficial to implement a simple costing system using a single indirect-cost pool,or an ABC system.Review and compare the following information:
  
Required:
The goal of the accountant is to trace more costs as direct costs,create a homogeneous cost pool,and to implement a cost-allocation base that has a cause-and-effect relationship with costs in the cost pool.Which system should the auditor at the Yarn Shoppe implement? Why?

The Auditor at the Yarn Shoppe Needs to Determine Whether