Activity based costing: ABC is a system in which various activities are identified. At first, costs of activities are calculated and then such cost is allocated to all the products. Relationship among costs, products and activities, established under this system, helps in the allocation of cost process. An activity rate for each given activity.

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Answer 1

Question

Chapter 4, Problem 14P

1

To determine

Activity based costing:

ABC is a system in which various activities are identified. At first, costs of activities are calculated and then such cost is allocated to all the products. Relationship among costs, products and activities, established under this system, helps in the allocation of cost process.

An activity rate for each given activity.

2

To determine

Activity cost

Activity cost refers to the total cost that is incurred by each activity. This cost is calculated and then assigned to all the products with the use of a cost allocation base or measure.

To calculate: Total activity cost of given three dinner parties.

3

To determine

Average cost

Average cost, also known as unit cost, is calculated by the division of total cost and number of units.

To calculate: To convert amount calculated in part (2) to cost per dinner.

4

To determine

Cost per dinner:

cost per dinner can be calculated by dividing total cost with total number of dinners.

To explain: why the cost per dinner for three different parties differ.

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Shoreham Industries sells its product for $98 per unit. During 2023, it produced 85,000 units and sold 74,000 units (there was no beginning inventory). Costs per unit are: direct materials $24, direct labor $18, and variable overhead $7. Fixed costs are: $1,275,000 manufacturing overhead, and $142,000 selling and administrative expenses. The per-unit manufacturing cost under absorption costing is__.

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Answer 2

Question

Chapter 4, Problem 14P

1

To determine

Activity based costing:

ABC is a system in which various activities are identified. At first, costs of activities are calculated and then such cost is allocated to all the products. Relationship among costs, products and activities, established under this system, helps in the allocation of cost process.

An activity rate for each given activity.

2

To determine

Activity cost

Activity cost refers to the total cost that is incurred by each activity. This cost is calculated and then assigned to all the products with the use of a cost allocation base or measure.

To calculate: Total activity cost of given three dinner parties.

3

To determine

Average cost

Average cost, also known as unit cost, is calculated by the division of total cost and number of units.

To calculate: To convert amount calculated in part (2) to cost per dinner.

4

To determine

Cost per dinner:

cost per dinner can be calculated by dividing total cost with total number of dinners.

To explain: why the cost per dinner for three different parties differ.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 4, Problem 14P

1

To determine

Activity based costing:

ABC is a system in which various activities are identified. At first, costs of activities are calculated and then such cost is allocated to all the products. Relationship among costs, products and activities, established under this system, helps in the allocation of cost process.

An activity rate for each given activity.

2

To determine

Activity cost

Activity cost refers to the total cost that is incurred by each activity. This cost is calculated and then assigned to all the products with the use of a cost allocation base or measure.

To calculate: Total activity cost of given three dinner parties.

3

To determine

Average cost

Average cost, also known as unit cost, is calculated by the division of total cost and number of units.

To calculate: To convert amount calculated in part (2) to cost per dinner.

4

To determine

Cost per dinner:

cost per dinner can be calculated by dividing total cost with total number of dinners.

To explain: why the cost per dinner for three different parties differ.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 4, Problem 14P

1

To determine

Activity based costing:

ABC is a system in which various activities are identified. At first, costs of activities are calculated and then such cost is allocated to all the products. Relationship among costs, products and activities, established under this system, helps in the allocation of cost process.

An activity rate for each given activity.

2

To determine

Activity cost

Activity cost refers to the total cost that is incurred by each activity. This cost is calculated and then assigned to all the products with the use of a cost allocation base or measure.

To calculate: Total activity cost of given three dinner parties.

3

To determine

Average cost

Average cost, also known as unit cost, is calculated by the division of total cost and number of units.

To calculate: To convert amount calculated in part (2) to cost per dinner.

4

To determine

Cost per dinner:

cost per dinner can be calculated by dividing total cost with total number of dinners.

To explain: why the cost per dinner for three different parties differ.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 4, Problem 14P

1

To determine

Activity based costing:

ABC is a system in which various activities are identified. At first, costs of activities are calculated and then such cost is allocated to all the products. Relationship among costs, products and activities, established under this system, helps in the allocation of cost process.

An activity rate for each given activity.

2

To determine

Activity cost

Activity cost refers to the total cost that is incurred by each activity. This cost is calculated and then assigned to all the products with the use of a cost allocation base or measure.

To calculate: Total activity cost of given three dinner parties.

3

To determine

Average cost

Average cost, also known as unit cost, is calculated by the division of total cost and number of units.

To calculate: To convert amount calculated in part (2) to cost per dinner.

4

To determine

Cost per dinner:

cost per dinner can be calculated by dividing total cost with total number of dinners.

To explain: why the cost per dinner for three different parties differ.

Answer 6

Chapter 4, Problem 14P

1

To determine

Activity based costing:

ABC is a system in which various activities are identified. At first, costs of activities are calculated and then such cost is allocated to all the products. Relationship among costs, products and activities, established under this system, helps in the allocation of cost process.

An activity rate for each given activity.

Answer 7

Chapter 4, Problem 14P

1

To determine

Activity based costing:

ABC is a system in which various activities are identified. At first, costs of activities are calculated and then such cost is allocated to all the products. Relationship among costs, products and activities, established under this system, helps in the allocation of cost process.

An activity rate for each given activity.

Answer 8

2

To determine

Activity cost

Activity cost refers to the total cost that is incurred by each activity. This cost is calculated and then assigned to all the products with the use of a cost allocation base or measure.

To calculate: Total activity cost of given three dinner parties.

Answer 9

2

To determine

Activity cost

Activity cost refers to the total cost that is incurred by each activity. This cost is calculated and then assigned to all the products with the use of a cost allocation base or measure.

To calculate: Total activity cost of given three dinner parties.

Answer 10

3

To determine

Average cost

Average cost, also known as unit cost, is calculated by the division of total cost and number of units.

To calculate: To convert amount calculated in part (2) to cost per dinner.

Answer 11

3

To determine

Average cost

Average cost, also known as unit cost, is calculated by the division of total cost and number of units.

To calculate: To convert amount calculated in part (2) to cost per dinner.

Answer 12

4

To determine

Cost per dinner:

cost per dinner can be calculated by dividing total cost with total number of dinners.

To explain: why the cost per dinner for three different parties differ.

Answer 13

4

To determine

Cost per dinner:

cost per dinner can be calculated by dividing total cost with total number of dinners.

To explain: why the cost per dinner for three different parties differ.

Answer 14

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Answer 15

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Answer 16

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Answer 17

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 describes activity based costing as a system in which various activities are identified and then allocated to all the products.

Activity cost

Activity cost refers to the total cost that is incurred by each activity. This cost is calculated and then assigned to all the products with the use of a cost allocation base or measure.

To calculate: Total activity cost of given three dinner parties.

Average cost

Average cost, also known as unit cost, is calculated by the division of total cost and number of units.

To calculate: To convert amount calculated in part (2) to cost per dinner.

Cost per dinner:

cost per dinner can be calculated by dividing total cost with total number of dinners.

To explain: why the cost per dinner for three different parties differ.

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Chapter 4 Solutions

Solution Summary: The author describes activity based costing as a system in which various activities are identified and then allocated to all the products.

Activity cost Activity cost refers to the total cost that is incurred by each activity. This cost is calculated and then assigned to all the products with the use of a cost allocation base or measure. To calculate: Total activity cost of given three dinner parties.

Average cost Average cost, also known as unit cost, is calculated by the division of total cost and number of units. To calculate: To convert amount calculated in part (2) to cost per dinner.

Cost per dinner: cost per dinner can be calculated by dividing total cost with total number of dinners. To explain: why the cost per dinner for three different parties differ.

Want to see the full answer?

Chapter 4 Solutions

Activity cost

Activity cost refers to the total cost that is incurred by each activity. This cost is calculated and then assigned to all the products with the use of a cost allocation base or measure.

To calculate: Total activity cost of given three dinner parties.

Average cost

Average cost, also known as unit cost, is calculated by the division of total cost and number of units.

To calculate: To convert amount calculated in part (2) to cost per dinner.

Cost per dinner:

cost per dinner can be calculated by dividing total cost with total number of dinners.

To explain: why the cost per dinner for three different parties differ.