Bundle: Managerial Accounting, Loose-leaf Version, 14th - Book Only
14th Edition
ISBN: 9781337541398
Author: Carl Warren; James M. Reeve; Jonathan Duchac
Publisher: Cengage Learning
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Chapter 4, Problem 1ADM
A.
To determine
Calculate the revised activity-cost per unit
B.
To determine
Indicate whether the revised fabrication plan reduced the activity cost per unit
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Students have asked these similar questions
Central Perk, LLC, a manufacturer of coffee beans, is considering switching its
operations to an Activity Based Costing system. The following manufacturing
overhead activities and cost drivers have been identified:
Activity.
Machine setup
Machine assembly
Product inspection
Product movement
General factory
Cost Driver
Number of machine setups
Machine hours logged
Inspection hours logged
Number of moves
Machine hours logged
Based on the above descriptions, which of the following correctly pairs the activity
with its appropriate cost level?
O A. Product Inspection... batch level cost
OB. Product Movement... facility level cost
O C. Machine Assembly... unit level cost
O D. General Factory... batch level cost
O E. Machine Setup... unit level cost
In a manufacturing company, overhead allocations are made for three reasons:
(1) to determine the full cost of a product;
(2) to encourage efficient resource usage; and
(3) to compare alternative courses of action for management purposes.
1. Why must overhead be considered a product cost under generally accepted accounting principles?
2. Ayam Company makes plastic dog carriers. The manufacturing process is highly automated and the machine time needed to make any size crate is approximately the same. Ayam’s management decides to begin producing plastic lawn furniture and, to do so, two additional pieces of automated equipment are acquired. Annual depreciation on the new pieces of equipment is P38,000.
Should the new overhead cost be allocated over all products manufactured by Ayam? Explain.
Wojtek Nakowski has prepared the following list of statements about process cost accounting.
Identify each statement as true or false.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Process cost systems are used to apply costs to similar products that are mass-produced in a
continuous fashion.
A process cost system is used when each finished unit is indistinguishable from another.
Companies that produce soft drinks, motion pictures, and computer chips would all use process cost
accounting.
In a process cost system, costs are tracked by individual jobs.
Job-order costing and process costing track different manufacturing cost components.
Both job-order costing and process costing account for direct materials, direct labour, and
manufacturing overhead.
Costs flow through the accounts in the same basic way for both job-order costing and process costing.
In a process cost system, only one work in process inventory account is used.
In a process cost system, costs are summarized in a job cost sheet.
In a…
Chapter 4 Solutions
Bundle: Managerial Accounting, Loose-leaf Version, 14th - Book Only
Ch. 4 - Why would management be concerned about the...Ch. 4 - Why would a manufacturing company with multiple...Ch. 4 - Prob. 3DQCh. 4 - Prob. 4DQCh. 4 - How does activity-based costing differ from the...Ch. 4 - Prob. 6DQCh. 4 - Prob. 7DQCh. 4 - Under what circumstances might the activity-based...Ch. 4 - Prob. 9DQCh. 4 - Prob. 10DQ
Ch. 4 - Single plantwide factory overhead rate The total...Ch. 4 - Multiple production department factory overhead...Ch. 4 - Activity-based costing: factory overhead costs The...Ch. 4 - Activity-based costing: selling and administrative...Ch. 4 - Activity-based costing for a service business...Ch. 4 - Prob. 1ECh. 4 - Prob. 2ECh. 4 - Prob. 3ECh. 4 - Prob. 4ECh. 4 - Multiple production department factory overhead...Ch. 4 - Prob. 6ECh. 4 - Single plantwide and multiple production...Ch. 4 - Prob. 8ECh. 4 - Prob. 9ECh. 4 - Prob. 10ECh. 4 - Prob. 11ECh. 4 - Activity cost pools, activity rates, and product...Ch. 4 - Prob. 13ECh. 4 - Prob. 14ECh. 4 - Activity-based costing and product cost distortion...Ch. 4 - Prob. 16ECh. 4 - Evaluating selling and administrative cost...Ch. 4 - Prob. 18ECh. 4 - Prob. 19ECh. 4 - Activity-based costing for a service company...Ch. 4 - Prob. 21ECh. 4 - Prob. 1PACh. 4 - Multiple production department factory overhead...Ch. 4 - Activity-based and department rate product costing...Ch. 4 - Activity-based product costing Mello Manufacturing...Ch. 4 - Prob. 5PACh. 4 - Product costing and decision analysis for a...Ch. 4 - Single plantwide factory overhead rate Spotted Cow...Ch. 4 - Multiple production department factory overhead...Ch. 4 - Activity-based department rate product costing and...Ch. 4 - Activity-based product costing Sweet Sugar Company...Ch. 4 - Prob. 5PBCh. 4 - Prob. 6PBCh. 4 - Prob. 1ADMCh. 4 - Prob. 2ADMCh. 4 - Production run size and activity improvement...Ch. 4 - Prob. 4ADMCh. 4 - Ethics in Action The controller of Tri Con Global...Ch. 4 - Communication The controller of New Wave Sounds...
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