Activity based costing: ABC is a method used in cost accounting that first identifies certain activities,then assigns cost to identified overhead activities and then allocate costs to products. Costs are assigned to products by building a relationship among costs, various activities and products. Activity cost pool: Activity cost pool includes all the costs that are incurred while performing one manufacturing process or task. It helps in getting an estimate of the accurate cost of a process. An activity rate for all the activity cost pools.

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Answer 1

Question

Chapter 4, Problem 8E

1

To determine

Activity based costing:

ABC is a method used in cost accounting that first identifies certain activities,then assigns cost to identified overhead activities and then allocate costs to products. Costs are assigned to products by building a relationship among costs, various activities and products.

Activity cost pool:

Activity cost pool includes all the costs that are incurred while performing one manufacturing process or task. It helps in getting an estimate of the accurate cost of a process.

An activity rate for all the activity cost pools.

2

To determine

Unit product cost

Calculation of unit product cost is done by dividing total cost with the number of units produced. Total cost incurred in the production process is considered.

To calculate: Unit product cost of two given products.

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Answer 2

Question

Chapter 4, Problem 8E

1

To determine

Activity based costing:

ABC is a method used in cost accounting that first identifies certain activities,then assigns cost to identified overhead activities and then allocate costs to products. Costs are assigned to products by building a relationship among costs, various activities and products.

Activity cost pool:

Activity cost pool includes all the costs that are incurred while performing one manufacturing process or task. It helps in getting an estimate of the accurate cost of a process.

An activity rate for all the activity cost pools.

2

To determine

Unit product cost

Calculation of unit product cost is done by dividing total cost with the number of units produced. Total cost incurred in the production process is considered.

To calculate: Unit product cost of two given products.

Expert Solution & Answer

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Answer 3

Question

Chapter 4, Problem 8E

1

To determine

Activity based costing:

ABC is a method used in cost accounting that first identifies certain activities,then assigns cost to identified overhead activities and then allocate costs to products. Costs are assigned to products by building a relationship among costs, various activities and products.

Activity cost pool:

Activity cost pool includes all the costs that are incurred while performing one manufacturing process or task. It helps in getting an estimate of the accurate cost of a process.

An activity rate for all the activity cost pools.

2

To determine

Unit product cost

Calculation of unit product cost is done by dividing total cost with the number of units produced. Total cost incurred in the production process is considered.

To calculate: Unit product cost of two given products.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 4

Question

Chapter 4, Problem 8E

1

To determine

Activity based costing:

ABC is a method used in cost accounting that first identifies certain activities,then assigns cost to identified overhead activities and then allocate costs to products. Costs are assigned to products by building a relationship among costs, various activities and products.

Activity cost pool:

Activity cost pool includes all the costs that are incurred while performing one manufacturing process or task. It helps in getting an estimate of the accurate cost of a process.

An activity rate for all the activity cost pools.

2

To determine

Unit product cost

Calculation of unit product cost is done by dividing total cost with the number of units produced. Total cost incurred in the production process is considered.

To calculate: Unit product cost of two given products.

Expert Solution & Answer

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See solution

Answer 5

Chapter 4, Problem 8E

1

To determine

Activity based costing:

ABC is a method used in cost accounting that first identifies certain activities,then assigns cost to identified overhead activities and then allocate costs to products. Costs are assigned to products by building a relationship among costs, various activities and products.

Activity cost pool:

Activity cost pool includes all the costs that are incurred while performing one manufacturing process or task. It helps in getting an estimate of the accurate cost of a process.

An activity rate for all the activity cost pools.

2

To determine

Unit product cost

Calculation of unit product cost is done by dividing total cost with the number of units produced. Total cost incurred in the production process is considered.

To calculate: Unit product cost of two given products.

Answer 6

Chapter 4, Problem 8E

1

To determine

Activity based costing:

ABC is a method used in cost accounting that first identifies certain activities,then assigns cost to identified overhead activities and then allocate costs to products. Costs are assigned to products by building a relationship among costs, various activities and products.

Activity cost pool:

Activity cost pool includes all the costs that are incurred while performing one manufacturing process or task. It helps in getting an estimate of the accurate cost of a process.

An activity rate for all the activity cost pools.

Answer 7

Chapter 4, Problem 8E

1

To determine

Activity based costing:

ABC is a method used in cost accounting that first identifies certain activities,then assigns cost to identified overhead activities and then allocate costs to products. Costs are assigned to products by building a relationship among costs, various activities and products.

Activity cost pool:

Activity cost pool includes all the costs that are incurred while performing one manufacturing process or task. It helps in getting an estimate of the accurate cost of a process.

An activity rate for all the activity cost pools.

Answer 8

2

To determine

Unit product cost

Calculation of unit product cost is done by dividing total cost with the number of units produced. Total cost incurred in the production process is considered.

To calculate: Unit product cost of two given products.

Answer 9

2

To determine

Unit product cost

Calculation of unit product cost is done by dividing total cost with the number of units produced. Total cost incurred in the production process is considered.

To calculate: Unit product cost of two given products.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 4 - What are the three common approaches for assigning...Ch. 4 - Why does activity-based costing appeal to some...Ch. 4 - Why do departmental overheadrates something result...Ch. 4 - What are the four hierarchical levels of activity...Ch. 4 - Why activity-based costing is described as a...Ch. 4 - Why do overhead costs often shift from high-volume...Ch. 4 - What are the three major ways in which...Ch. 4 - What are the major limitations of activity-based...Ch. 4 - Prob. 1AE Ch. 4 - Prob. 2AE

Solution Summary: The author explains the ABC method used in cost accounting that first identifies activities, then assigns cost to identified overhead activities and then allocates costs to products.

Videos

Unit product cost

Calculation of unit product cost is done by dividing total cost with the number of units produced. Total cost incurred in the production process is considered.

To calculate: Unit product cost of two given products.

Want to see the full answer?

Chapter 4 Solutions

Solution Summary: The author explains the ABC method used in cost accounting that first identifies activities, then assigns cost to identified overhead activities and then allocates costs to products.

Videos

Unit product cost Calculation of unit product cost is done by dividing total cost with the number of units produced. Total cost incurred in the production process is considered. To calculate: Unit product cost of two given products.

Want to see the full answer?

Chapter 4 Solutions

Unit product cost

Calculation of unit product cost is done by dividing total cost with the number of units produced. Total cost incurred in the production process is considered.

To calculate: Unit product cost of two given products.