Allen Company produced 44,000 units last year. The information on the actual costs and budgeted costs at actual production of three activities is provided below.
Required:
Prepare an activity-based performance report for the three activities for the past year.
Definitions:
Assets
Resources owned by a business from which future economic benefits are expected to flow to the enterprise.
Equity
The value of an ownership interest in property or a business, calculated as total assets minus total liabilities; represents what the owners' claim on the assets is.
Entity Assumption
The accounting principle that treats a business as a separate legal and accounting entity, distinct from its owners, managers, or operators.
Historical Cost Principle
An accounting principle that assets should be recorded and reported at their original purchase cost.
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