Per unit cost in traditional costing method Under traditional costing method, per unit cost is calculated by adding per unit cost of direct material, labor and overheads . Overhead costs are assigned to products by using a predetermined overhead rate. Unit product cost for both the products under traditional costing method.

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Answer 1

Question

Chapter 4, Problem 2AE

1

To determine

Per unit cost in traditional costing method Under traditional costing method, per unit cost is calculated by adding per unit cost of direct material, labor and overheads. Overhead costs are assigned to products by using a predetermined overhead rate.

Unit product cost for both the products under traditional costing method.

2

To determine

Per unit cost in Activity based costing:

Under activity-based costing, per unit cost is calculated by adding per unit cost of direct material, direct labor and overheads. Here, different activities are identified that give rise to indirect cost and total cost of all the activities (total indirect cost) are allocated to products in the ratio in which products use or consume different activities.

To calculate: Per unit cost under activity-based costing method.

3

To determine

Traditional costing and activity-based costing Both the methods are used in cost accounting to allocate the overheads or indirect cost and to calculate total costs. Traditional costing system uses only one base for such allocation and activity-based costing system uses more than one base based on different activities.

To explain: Which costing system provides more accurate costs.

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Cash Accounts Receivable Supplies Prepaid Insurance Equipment Notes Payable Accounts Payable The Lexington Group Unadjusted Trial Balance May 31, 2016 Debit Balances Credit Balances 20,350 37,000 1,100 200 171,175 36,000 26,000 Common Stock 50,000 Retained Earnings 94,150 Dividends 15,000 Fees Earned 429,850 Wages Expense 270,000 Rent Expense 63,000 Advertising Expense 25,200 Miscellaneous Expense 5,100 608,125 636,000

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Answer 2

Question

Chapter 4, Problem 2AE

1

To determine

Per unit cost in traditional costing method Under traditional costing method, per unit cost is calculated by adding per unit cost of direct material, labor and overheads. Overhead costs are assigned to products by using a predetermined overhead rate.

Unit product cost for both the products under traditional costing method.

2

To determine

Per unit cost in Activity based costing:

Under activity-based costing, per unit cost is calculated by adding per unit cost of direct material, direct labor and overheads. Here, different activities are identified that give rise to indirect cost and total cost of all the activities (total indirect cost) are allocated to products in the ratio in which products use or consume different activities.

To calculate: Per unit cost under activity-based costing method.

3

To determine

Traditional costing and activity-based costing Both the methods are used in cost accounting to allocate the overheads or indirect cost and to calculate total costs. Traditional costing system uses only one base for such allocation and activity-based costing system uses more than one base based on different activities.

To explain: Which costing system provides more accurate costs.

Expert Solution & Answer

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Answer 3

Question

Chapter 4, Problem 2AE

1

To determine

Per unit cost in traditional costing method Under traditional costing method, per unit cost is calculated by adding per unit cost of direct material, labor and overheads. Overhead costs are assigned to products by using a predetermined overhead rate.

Unit product cost for both the products under traditional costing method.

2

To determine

Per unit cost in Activity based costing:

Under activity-based costing, per unit cost is calculated by adding per unit cost of direct material, direct labor and overheads. Here, different activities are identified that give rise to indirect cost and total cost of all the activities (total indirect cost) are allocated to products in the ratio in which products use or consume different activities.

To calculate: Per unit cost under activity-based costing method.

3

To determine

Traditional costing and activity-based costing Both the methods are used in cost accounting to allocate the overheads or indirect cost and to calculate total costs. Traditional costing system uses only one base for such allocation and activity-based costing system uses more than one base based on different activities.

To explain: Which costing system provides more accurate costs.

Expert Solution & Answer

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Answer 4

Question

Chapter 4, Problem 2AE

1

To determine

Per unit cost in traditional costing method Under traditional costing method, per unit cost is calculated by adding per unit cost of direct material, labor and overheads. Overhead costs are assigned to products by using a predetermined overhead rate.

Unit product cost for both the products under traditional costing method.

2

To determine

Per unit cost in Activity based costing:

Under activity-based costing, per unit cost is calculated by adding per unit cost of direct material, direct labor and overheads. Here, different activities are identified that give rise to indirect cost and total cost of all the activities (total indirect cost) are allocated to products in the ratio in which products use or consume different activities.

To calculate: Per unit cost under activity-based costing method.

3

To determine

Traditional costing and activity-based costing Both the methods are used in cost accounting to allocate the overheads or indirect cost and to calculate total costs. Traditional costing system uses only one base for such allocation and activity-based costing system uses more than one base based on different activities.

To explain: Which costing system provides more accurate costs.

Expert Solution & Answer

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Answer 5

Chapter 4, Problem 2AE

1

To determine

Per unit cost in traditional costing method Under traditional costing method, per unit cost is calculated by adding per unit cost of direct material, labor and overheads. Overhead costs are assigned to products by using a predetermined overhead rate.

Unit product cost for both the products under traditional costing method.

2

To determine

Per unit cost in Activity based costing:

Under activity-based costing, per unit cost is calculated by adding per unit cost of direct material, direct labor and overheads. Here, different activities are identified that give rise to indirect cost and total cost of all the activities (total indirect cost) are allocated to products in the ratio in which products use or consume different activities.

To calculate: Per unit cost under activity-based costing method.

3

To determine

Traditional costing and activity-based costing Both the methods are used in cost accounting to allocate the overheads or indirect cost and to calculate total costs. Traditional costing system uses only one base for such allocation and activity-based costing system uses more than one base based on different activities.

To explain: Which costing system provides more accurate costs.

Answer 6

Chapter 4, Problem 2AE

1

To determine

Per unit cost in traditional costing method Under traditional costing method, per unit cost is calculated by adding per unit cost of direct material, labor and overheads. Overhead costs are assigned to products by using a predetermined overhead rate.

Unit product cost for both the products under traditional costing method.

Answer 7

Chapter 4, Problem 2AE

1

To determine

Per unit cost in traditional costing method Under traditional costing method, per unit cost is calculated by adding per unit cost of direct material, labor and overheads. Overhead costs are assigned to products by using a predetermined overhead rate.

Unit product cost for both the products under traditional costing method.

Answer 8

2

To determine

Per unit cost in Activity based costing:

Under activity-based costing, per unit cost is calculated by adding per unit cost of direct material, direct labor and overheads. Here, different activities are identified that give rise to indirect cost and total cost of all the activities (total indirect cost) are allocated to products in the ratio in which products use or consume different activities.

To calculate: Per unit cost under activity-based costing method.

Answer 9

2

To determine

Per unit cost in Activity based costing:

Under activity-based costing, per unit cost is calculated by adding per unit cost of direct material, direct labor and overheads. Here, different activities are identified that give rise to indirect cost and total cost of all the activities (total indirect cost) are allocated to products in the ratio in which products use or consume different activities.

To calculate: Per unit cost under activity-based costing method.

Answer 10

3

To determine

Traditional costing and activity-based costing Both the methods are used in cost accounting to allocate the overheads or indirect cost and to calculate total costs. Traditional costing system uses only one base for such allocation and activity-based costing system uses more than one base based on different activities.

To explain: Which costing system provides more accurate costs.

Answer 11

3

To determine

Traditional costing and activity-based costing Both the methods are used in cost accounting to allocate the overheads or indirect cost and to calculate total costs. Traditional costing system uses only one base for such allocation and activity-based costing system uses more than one base based on different activities.

To explain: Which costing system provides more accurate costs.

Answer 12

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Answer 13

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Answer 14

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Answer 15

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

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