Tugas Group 1

Basic Cost Management Concepts

The actions listed next are associated with either an activity-based operational control system or a
functional-based operational control system:

1. Budgeted costs for the maintenance department are compared with the actual costs of the
maintenance department.
2. The maintenance department manager receives a bonus for beating budget.
3. The costs of resources are traced to activities and then to products.
4. The purchasing department is set up as a responsibility center.
5. Activities are identified and listed.
6. Activities are categorized as adding or not adding value to the organization.
7. A standard for a products material usage cost is set and compared against the products actual
materials usage cost.
8. The cost of performing an activity is tracked over time.
9. The distance between moves is identified as the cause of materials handling cost.
10. A purchasing agent is rewarded for buying parts below the standard price set by the company.
11. The cost of the materials handling activity is reduced dramatically by redesigning the plant layout.
12. An investigation is undertaken to find out why the actual labor cost for the production of 1,000
units is greater than the labor standard allowed.
13. The percentage of defective units is calculated and tracked over time.
14. Engineering has been charged with finding a way to reduce setup time by 75 percent.
15. The manager of the receiving department lays off two receiving clerks so that the fourth-quarter
budget can be met

Required:
Classify the preceding actions as belonging to either an activity-based operational control
system or a functional-based control system. Explain why you classified each action as
you did..