ACCESS IN BB-ACC202
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ISBN: 9780135375587
Author: Pearson
Publisher: PEARSON
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Chapter 4, Problem 4.42AP
Use ABC to compute full product costs (Learning Objective 2)
Arnett Corp. manufactures computer desks in its White Bear Lake, Minnesota, plant. The company uses activity-based costing to allocate all manufacturing conversion costs (direct labor and manufacturing
Arnett produced two styles of desks in March: the Standard desk and the Unpainted desk. Data for each follow:
Requirements
- 1. Compute the per-unit manufacturing product cost of Standard desks and Unpainted desks.
- 2. Premanufacturing activities, such as product design, were assigned to the Standard desks at $6 each and to the Unpainted desks at $2 each. Similar analyses were conducted of post-manufacturing activities, such as distribution, marketing, and customer service. The post-
manufacturing costs were $22 per Standard and $19 per Unpainted desk. Compute the full product costs per desk. - 3. Which product costs are reported in the external financial statements? Which costs are used for management decision making? Explain the difference.
- 4. What price should Arnett’s managers set for Standard desks to earn a $42 profit per desk?
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Click to watch the Tell Me More Learning Objective 1 video and then answer the questions below.
1. Which of the following manufacturers is most likely to use a process cost system?
Purse manufacturer
Sports drink manufacturer
Automobile manufacturer
Guitar manufacturer
2. Process and job order cost systems are similar in that both systems _______.
record and summarize product costs
classify product costs as direct materials, direct labor, and factory overhead
allocate factory overhead costs to products
All of these choices are correct.
Click to watch the Tell Me More Learning Objective 2 video and then answer the questions below.
1. The first step in preparing a cost of production report is to _____.
compute equivalent units of production
determine the units to be assigned costs
determine the cost per equivalent unit
allocate costs to units transferred out and partially completed units
2. The last step in preparing a cost of production report is to _____.
compute equivalent units of production
determine the units to be assigned costs
determine the cost per equivalent unit
allocate costs to units transferred out and partially completed units
Click to watch the Tell Me More Learning Objective 4 video and then answer the questions below.
1. Which of the following represents the computation of direct materials cost per equivalent unit?
Total direct cost for the period divided by total equivalent units of direct materials.
Total equivalent units of direct materials divided by total direct cost for the period.
Total direct cost for the period divided by total units of direct materials.
Total units of direct materials divided by total direct cost for the period.
2. What is the conversion cost per equivalent unit, when the total conversion cost for the period is $1,225 and the total units of packaged drinking water produced during the same period is 5,000 gallons (70 percent complete).
$0.17 per gallon
$0.35 per gallon
$2.86 per gallon
None of these choices are correct.
Chapter 4 Solutions
ACCESS IN BB-ACC202
Ch. 4 - (Learning Objective 1) Cost distortion is more...Ch. 4 - (Learning Objective 2) The first step in computing...Ch. 4 - (Learning Objective 2) Activities incurred...Ch. 4 - (Learning Objective 3) Which of the following is...Ch. 4 - (Learning Objective 3) The potential benefits of...Ch. 4 - (Learning Objective 4) Lean operations are...Ch. 4 - Prob. 7QCCh. 4 - (Learning Objective 4) Concerning lean operations,...Ch. 4 - (Learning Objective 5) Which of the following is...Ch. 4 - (Learning Objective 5) Which of the following...
Ch. 4 - Understanding key terms (Learning Objectives 1, 2,...Ch. 4 - Use departmental overhead rates to allocate...Ch. 4 - Compute departmental overhead rates (Learning...Ch. 4 - Prob. 4.4SECh. 4 - Prob. 4.5SECh. 4 - Calculate a job cost using ABC (Learning Objective...Ch. 4 - Classifying costs within the cost hierarchy...Ch. 4 - Classifying costs within the cost hierarchy...Ch. 4 - Determine the usefulness of refined costing...Ch. 4 - Prob. 4.10SECh. 4 - Identifying costs as value-added or...Ch. 4 - Identify lean production characteristics (Learning...Ch. 4 - Identify the DOWNTIME activities at a manufacturer...Ch. 4 - Prob. 4.14SECh. 4 - Classifying costs of quality (Learning Objective...Ch. 4 - Quality initiative decision (Learning Objective 5)...Ch. 4 - Assess the impact of a quality initiative...Ch. 4 - Identify ethical standards violated (Learning...Ch. 4 - Compare traditional and departmental cost...Ch. 4 - Compute activity rates and apply to jobs (Learning...Ch. 4 - Apply activity cost allocation rates (Learning...Ch. 4 - Using ABC to bill clients at a service firm...Ch. 4 - Compare traditional and ABC allocations at a...Ch. 4 - Compare traditional and ABC allocations on a job...Ch. 4 - Use ABC to allocate manufacturing overhead...Ch. 4 - Continuation of E4-25A: Determine product...Ch. 4 - Prob. 4.27AECh. 4 - Classify costs and make a quality-initiative...Ch. 4 - Prob. 4.29AECh. 4 - Compare traditional and departmental cost...Ch. 4 - Prob. 4.31BECh. 4 - Prob. 4.32BECh. 4 - Prob. 4.33BECh. 4 - Compare traditional and ABC cost allocations at a...Ch. 4 - Prob. 4.35BECh. 4 - Prob. 4.36BECh. 4 - Prob. 4.37BECh. 4 - Prob. 4.38BECh. 4 - Classify costs and make a quality-initiative...Ch. 4 - Prob. 4.40BECh. 4 - Prob. 4.41APCh. 4 - Use ABC to compute full product costs (Learning...Ch. 4 - Prob. 4.43APCh. 4 - Prob. 4.44APCh. 4 - Prob. 4.45APCh. 4 - Prob. 4.46BPCh. 4 - Prob. 4.47BPCh. 4 - Comprehensive ABC implementation (Learning...Ch. 4 - Using ABC in conjunction with quality decisions...Ch. 4 - Comprehensive ABC (Learning Objectives 2 3)...Ch. 4 - Prob. 4.51SCCh. 4 - Discussion Questions 1. Explain why departmental...Ch. 4 - ABC in Real Companies Choose a company in any of...Ch. 4 - Value-Added versus Non-Value-Added at a Restaurant...Ch. 4 - Ethics involved with ABC and hazardous waste costs...
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