Activity Based Costing: Method of recognizing activities in the organization and allotment of cost of each activity thereto is known as activity based costing. To explain: In comparison to traditional cost system and when there are batch level or product level costs, an activity based costing system shifts costs.

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Answer 1

Question

Chapter 4, Problem 1MCQ

To determine

Activity Based Costing:

Method of recognizing activities in the organization and allotment of cost of each activity thereto is known as activity based costing.

To explain: In comparison to traditional cost system and when there are batch level or product level costs, an activity based costing system shifts costs.

Expert Solution & Answer

Explanation of Solution

b.

Usually activity based costing system shifts costs from high volume to low volume products due to usage of product level or batch level.

Hence, option b is correct.

a.

cost gets shifted low volume to high volume products in traditional methods due to usage of direct labor hours or machine hours.

c.

Shifting of cost from standardized to specialized products under activity based costing is not taken into accounts due to less usage of it.

d.

Activity based costing system does not facilitates specialized to standardized products due to non emphasizing on it, rather this considers product level.

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Selected comparative financial statements of Korbin Company follow. Sales KORBIN COMPANY Comparative Income Statements For Years Ended December 31 2021 2020 $ 512,008 $ 392,240 2019 $ 272,200 Cost of goods sold 308,229 245,542 174,208 Gross profit 203,779 146,698 97,992 Selling expenses 72,705 54,129 35,930 Administrative expenses 46,081 34,517 22,593 Total expenses 118,786 88,646 58,523 Income before taxes .84,993 58,052 39,469 Income tax expense 15,809 11,901 8,012 Net income $ 69,184 $ 46,151 $ 31,457 KORBIN COMPANY Comparative Balance Sheets Assets Current assets Long-term investments Plant assets, net Total assets Liabilities and Equity Current liabilities Common stock Other paid-in capital Retained earnings December 31 2021 2020 2019 $ 54,370 0 $ 36,390 600 $ 48,645 3,870 99,436 90,776 53,339 Total liabilities and equity $ 153,806 $ 127,766 $ 105,854 $ 22,456 $ 19,037 $ 18,524 68,000 68,000 50,000 8,500 8,500 5,556 54,850 32,229 31,774 $ 153,806 $ 127,766 $ 105,854

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Answer 2

Question

Chapter 4, Problem 1MCQ

To determine

Activity Based Costing:

Method of recognizing activities in the organization and allotment of cost of each activity thereto is known as activity based costing.

To explain: In comparison to traditional cost system and when there are batch level or product level costs, an activity based costing system shifts costs.

Expert Solution & Answer

Explanation of Solution

b.

Usually activity based costing system shifts costs from high volume to low volume products due to usage of product level or batch level.

Hence, option b is correct.

a.

cost gets shifted low volume to high volume products in traditional methods due to usage of direct labor hours or machine hours.

c.

Shifting of cost from standardized to specialized products under activity based costing is not taken into accounts due to less usage of it.

d.

Activity based costing system does not facilitates specialized to standardized products due to non emphasizing on it, rather this considers product level.

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Answer 3

Question

Chapter 4, Problem 1MCQ

To determine

Activity Based Costing:

Method of recognizing activities in the organization and allotment of cost of each activity thereto is known as activity based costing.

To explain: In comparison to traditional cost system and when there are batch level or product level costs, an activity based costing system shifts costs.

Expert Solution & Answer

Explanation of Solution

b.

Usually activity based costing system shifts costs from high volume to low volume products due to usage of product level or batch level.

Hence, option b is correct.

a.

cost gets shifted low volume to high volume products in traditional methods due to usage of direct labor hours or machine hours.

c.

Shifting of cost from standardized to specialized products under activity based costing is not taken into accounts due to less usage of it.

d.

Activity based costing system does not facilitates specialized to standardized products due to non emphasizing on it, rather this considers product level.

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Answer 4

Question

Chapter 4, Problem 1MCQ

To determine

Activity Based Costing:

Method of recognizing activities in the organization and allotment of cost of each activity thereto is known as activity based costing.

To explain: In comparison to traditional cost system and when there are batch level or product level costs, an activity based costing system shifts costs.

Expert Solution & Answer

Explanation of Solution

b.

Usually activity based costing system shifts costs from high volume to low volume products due to usage of product level or batch level.

Hence, option b is correct.

a.

cost gets shifted low volume to high volume products in traditional methods due to usage of direct labor hours or machine hours.

c.

Shifting of cost from standardized to specialized products under activity based costing is not taken into accounts due to less usage of it.

d.

Activity based costing system does not facilitates specialized to standardized products due to non emphasizing on it, rather this considers product level.

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Answer 5

Chapter 4, Problem 1MCQ

To determine

Activity Based Costing:

Method of recognizing activities in the organization and allotment of cost of each activity thereto is known as activity based costing.

To explain: In comparison to traditional cost system and when there are batch level or product level costs, an activity based costing system shifts costs.

Expert Solution & Answer

Explanation of Solution

b.

Usually activity based costing system shifts costs from high volume to low volume products due to usage of product level or batch level.

Hence, option b is correct.

a.

cost gets shifted low volume to high volume products in traditional methods due to usage of direct labor hours or machine hours.

c.

Shifting of cost from standardized to specialized products under activity based costing is not taken into accounts due to less usage of it.

d.

Activity based costing system does not facilitates specialized to standardized products due to non emphasizing on it, rather this considers product level.

Answer 6

Chapter 4, Problem 1MCQ

To determine

Activity Based Costing:

Method of recognizing activities in the organization and allotment of cost of each activity thereto is known as activity based costing.

To explain: In comparison to traditional cost system and when there are batch level or product level costs, an activity based costing system shifts costs.

Expert Solution & Answer

Explanation of Solution

b.

Usually activity based costing system shifts costs from high volume to low volume products due to usage of product level or batch level.

Hence, option b is correct.

a.

cost gets shifted low volume to high volume products in traditional methods due to usage of direct labor hours or machine hours.

c.

Shifting of cost from standardized to specialized products under activity based costing is not taken into accounts due to less usage of it.

d.

Activity based costing system does not facilitates specialized to standardized products due to non emphasizing on it, rather this considers product level.

Answer 7

Chapter 4, Problem 1MCQ

To determine

Activity Based Costing:

Method of recognizing activities in the organization and allotment of cost of each activity thereto is known as activity based costing.

To explain: In comparison to traditional cost system and when there are batch level or product level costs, an activity based costing system shifts costs.

Answer 8

Expert Solution & Answer

Explanation of Solution

b.

Usually activity based costing system shifts costs from high volume to low volume products due to usage of product level or batch level.

Hence, option b is correct.

a.

cost gets shifted low volume to high volume products in traditional methods due to usage of direct labor hours or machine hours.

c.

Shifting of cost from standardized to specialized products under activity based costing is not taken into accounts due to less usage of it.

d.

Activity based costing system does not facilitates specialized to standardized products due to non emphasizing on it, rather this considers product level.