(a) Introduction: ABC system was developed to deal with the loopholes of traditional costing system. It helps in finding the total cost of activities that are necessary to make a product. In this method the costs are assigned to each activity that goes into production. To compute: The activity rates for each Cost pool assumingABC system is used by S.

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Answer 1

Question

Chapter 4, Problem 10E

To determine

(a)

Introduction:

ABC system was developed to deal with the loopholes of traditional costing system. It helps in finding the total cost of activities that are necessary to make a product. In this method the costs are assigned to each activity that goes into production.

To compute:

The activity rates for each Cost pool assumingABC system is used by S.

To determine

(b)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Ex. Insurance, rent etc.

To compute:

The amount of overhead that S will assign to the Standard floor mat line.

To determine

(c)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Examples are, insurance, rent, etc.

To compute:

To determine the amount of overhead that S will assign to the deluxe product line.

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Students have asked these similar questions

Fiona Industries plans to produce 30,000 units next period at a denominator activity of 60,000 direct labor hours. The direct labor wage rate is $16.50 per hour. The company's standards allow 2.2 yards of direct materials for each unit of product; the material costs $10.50 per yard. The company's budget includes a variable manufacturing overhead cost of $3.25 per direct labor hour and fixed manufacturing overhead of $285,000 per period. Using 60,000 direct labor hours as the denominator activity, compute the predetermined overhead rate and break it down into variable and fixed elements.

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Custom Pools currently sells420 Economy pools, 580 Standard pools, and 190 Premium pools each year. The firm is considering adding a Luxury pool and expects that, if it does, it can sell 310 of them. However, if the new pool is added, Economy pool sales are expected to decline to 290 units while Standard pool sales are expected to decline to 350. The sales of the Premium model will not be affected. Economy pools sell for an average of $16,200 each. Standard pools are priced at $24,500 and the Premium model sells for $42,000 each. The new Luxury pool will sell for $35,000. What is the value of erosion?

Answer 2

Question

Chapter 4, Problem 10E

To determine

(a)

Introduction:

ABC system was developed to deal with the loopholes of traditional costing system. It helps in finding the total cost of activities that are necessary to make a product. In this method the costs are assigned to each activity that goes into production.

To compute:

The activity rates for each Cost pool assumingABC system is used by S.

To determine

(b)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Ex. Insurance, rent etc.

To compute:

The amount of overhead that S will assign to the Standard floor mat line.

To determine

(c)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Examples are, insurance, rent, etc.

To compute:

To determine the amount of overhead that S will assign to the deluxe product line.

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Answer 3

Question

Chapter 4, Problem 10E

To determine

(a)

Introduction:

ABC system was developed to deal with the loopholes of traditional costing system. It helps in finding the total cost of activities that are necessary to make a product. In this method the costs are assigned to each activity that goes into production.

To compute:

The activity rates for each Cost pool assumingABC system is used by S.

To determine

(b)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Ex. Insurance, rent etc.

To compute:

The amount of overhead that S will assign to the Standard floor mat line.

To determine

(c)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Examples are, insurance, rent, etc.

To compute:

To determine the amount of overhead that S will assign to the deluxe product line.

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Answer 4

Question

Chapter 4, Problem 10E

To determine

(a)

Introduction:

ABC system was developed to deal with the loopholes of traditional costing system. It helps in finding the total cost of activities that are necessary to make a product. In this method the costs are assigned to each activity that goes into production.

To compute:

The activity rates for each Cost pool assumingABC system is used by S.

To determine

(b)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Ex. Insurance, rent etc.

To compute:

The amount of overhead that S will assign to the Standard floor mat line.

To determine

(c)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Examples are, insurance, rent, etc.

To compute:

To determine the amount of overhead that S will assign to the deluxe product line.

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Answer 5

Chapter 4, Problem 10E

To determine

(a)

Introduction:

ABC system was developed to deal with the loopholes of traditional costing system. It helps in finding the total cost of activities that are necessary to make a product. In this method the costs are assigned to each activity that goes into production.

To compute:

The activity rates for each Cost pool assumingABC system is used by S.

To determine

(b)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Ex. Insurance, rent etc.

To compute:

The amount of overhead that S will assign to the Standard floor mat line.

To determine

(c)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Examples are, insurance, rent, etc.

To compute:

To determine the amount of overhead that S will assign to the deluxe product line.

Answer 6

Chapter 4, Problem 10E

To determine

(a)

Introduction:

ABC system was developed to deal with the loopholes of traditional costing system. It helps in finding the total cost of activities that are necessary to make a product. In this method the costs are assigned to each activity that goes into production.

To compute:

The activity rates for each Cost pool assumingABC system is used by S.

Answer 7

Chapter 4, Problem 10E

To determine

(a)

Introduction:

ABC system was developed to deal with the loopholes of traditional costing system. It helps in finding the total cost of activities that are necessary to make a product. In this method the costs are assigned to each activity that goes into production.

To compute:

The activity rates for each Cost pool assumingABC system is used by S.

Answer 8

To determine

(b)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Ex. Insurance, rent etc.

To compute:

The amount of overhead that S will assign to the Standard floor mat line.

Answer 9

To determine

(b)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Ex. Insurance, rent etc.

To compute:

The amount of overhead that S will assign to the Standard floor mat line.

Answer 10

To determine

(c)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Examples are, insurance, rent, etc.

To compute:

To determine the amount of overhead that S will assign to the deluxe product line.

Answer 11

To determine

(c)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Examples are, insurance, rent, etc.

To compute:

To determine the amount of overhead that S will assign to the deluxe product line.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 4 - What is the difference between a volume-based cost...Ch. 4 - Explain the statement that traditional costing...Ch. 4 - Prob. 3Q Ch. 4 - How does activity-based costing differ from...Ch. 4 - What types of business might use activity-based...Ch. 4 - Prob. 6Q Ch. 4 - Prob. 7Q Ch. 4 - Prob. 8Q Ch. 4 - Why must costs be classified into different...Ch. 4 - Prob. 10Q

Solution Summary: The author explains the ABC system, which helps in finding the total cost of activities that are necessary to make a product.

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