Activity Based Costing: Activity Based Costing refers to the allocation of the factory overheads when there are numerous products and processes. Activity based costing aims at assigning the costs among the products in a proportionate way. Activity Based Costing has four levels of activity. Overhead: Overhead refers to the costs, which are utilized in business activities, however cannot be related to a specific activity or product. To Compute: The overhead rate for each activity.

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Answer 1

Question

Chapter 4, Problem 4.12BE

a)

To determine

Activity Based Costing: Activity Based Costing refers to the allocation of the factory overheads when there are numerous products and processes. Activity based costing aims at assigning the costs among the products in a proportionate way. Activity Based Costing has four levels of activity.

Overhead: Overhead refers to the costs, which are utilized in business activities, however cannot be related to a specific activity or product.

To Compute: The overhead rate for each activity.

b)

To determine

Activity cost pool: Activity cost pool refers to the overhead cost related to an activity. This is often calculated to get an accurate estimate of the production cost.

To Classify: The given cost pool on the basis of the level of activities.

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L.L. Bean operates two factories that produce its popular Bean boots (also known as "duck boots") in its home state of Maine. Since L.L. Bean prides itself on manufacturing its boots in Maine and not outsourcing, backorders for its boots can be high. In 2014, L.L. Bean sold about 450,000 pairs of the boots. At one point during 2014, it had a backorder level of about 100,000 pairs of boots. L.L. Bean can manufacture about 2,200 pairs of its duck boots each day with its factories running 24/7. In 2015, L.L. Bean expects to sell more than 500,000 pairs of its duck boots. As of late November 2015, the backorder quantity for Bean Boots was estimated to be about 50,000 pairs. Question: Assume another customer has returned a pair of duck boots (original cost $109) to L.L. Bean. What journal entry would L.L. Bean make to process the return and refund the original purchase price to the customer?

Answer 2

Question

Chapter 4, Problem 4.12BE

a)

To determine

Activity Based Costing: Activity Based Costing refers to the allocation of the factory overheads when there are numerous products and processes. Activity based costing aims at assigning the costs among the products in a proportionate way. Activity Based Costing has four levels of activity.

Overhead: Overhead refers to the costs, which are utilized in business activities, however cannot be related to a specific activity or product.

To Compute: The overhead rate for each activity.

b)

To determine

Activity cost pool: Activity cost pool refers to the overhead cost related to an activity. This is often calculated to get an accurate estimate of the production cost.

To Classify: The given cost pool on the basis of the level of activities.

Expert Solution & Answer

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Answer 3

Question

Chapter 4, Problem 4.12BE

a)

To determine

Activity Based Costing: Activity Based Costing refers to the allocation of the factory overheads when there are numerous products and processes. Activity based costing aims at assigning the costs among the products in a proportionate way. Activity Based Costing has four levels of activity.

Overhead: Overhead refers to the costs, which are utilized in business activities, however cannot be related to a specific activity or product.

To Compute: The overhead rate for each activity.

b)

To determine

Activity cost pool: Activity cost pool refers to the overhead cost related to an activity. This is often calculated to get an accurate estimate of the production cost.

To Classify: The given cost pool on the basis of the level of activities.

Expert Solution & Answer

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Answer 4

Question

Chapter 4, Problem 4.12BE

a)

To determine

Activity Based Costing: Activity Based Costing refers to the allocation of the factory overheads when there are numerous products and processes. Activity based costing aims at assigning the costs among the products in a proportionate way. Activity Based Costing has four levels of activity.

Overhead: Overhead refers to the costs, which are utilized in business activities, however cannot be related to a specific activity or product.

To Compute: The overhead rate for each activity.

b)

To determine

Activity cost pool: Activity cost pool refers to the overhead cost related to an activity. This is often calculated to get an accurate estimate of the production cost.

To Classify: The given cost pool on the basis of the level of activities.

Expert Solution & Answer

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Answer 5

Chapter 4, Problem 4.12BE

a)

To determine

Activity Based Costing: Activity Based Costing refers to the allocation of the factory overheads when there are numerous products and processes. Activity based costing aims at assigning the costs among the products in a proportionate way. Activity Based Costing has four levels of activity.

Overhead: Overhead refers to the costs, which are utilized in business activities, however cannot be related to a specific activity or product.

To Compute: The overhead rate for each activity.

b)

To determine

Activity cost pool: Activity cost pool refers to the overhead cost related to an activity. This is often calculated to get an accurate estimate of the production cost.

To Classify: The given cost pool on the basis of the level of activities.

Answer 6

Chapter 4, Problem 4.12BE

a)

To determine

Activity Based Costing: Activity Based Costing refers to the allocation of the factory overheads when there are numerous products and processes. Activity based costing aims at assigning the costs among the products in a proportionate way. Activity Based Costing has four levels of activity.

Overhead: Overhead refers to the costs, which are utilized in business activities, however cannot be related to a specific activity or product.

To Compute: The overhead rate for each activity.

Answer 7

Chapter 4, Problem 4.12BE

a)

To determine

Activity Based Costing: Activity Based Costing refers to the allocation of the factory overheads when there are numerous products and processes. Activity based costing aims at assigning the costs among the products in a proportionate way. Activity Based Costing has four levels of activity.

Overhead: Overhead refers to the costs, which are utilized in business activities, however cannot be related to a specific activity or product.

To Compute: The overhead rate for each activity.

Answer 8

b)

To determine

Activity cost pool: Activity cost pool refers to the overhead cost related to an activity. This is often calculated to get an accurate estimate of the production cost.

To Classify: The given cost pool on the basis of the level of activities.

Answer 9

b)

To determine

Activity cost pool: Activity cost pool refers to the overhead cost related to an activity. This is often calculated to get an accurate estimate of the production cost.

To Classify: The given cost pool on the basis of the level of activities.

Answer 10

Expert Solution & Answer

Answer 11

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Answer 12

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Answer 13

Ch. 4 - Under what conditions is direct labor a valid...Ch. 4 - What has happened in recent industrial history to...Ch. 4 - In an automated manufacturing environment, what...Ch. 4 - What is generally true about overhead allocation...Ch. 4 - What are the principal differences between...Ch. 4 - What is the formula for computing activity-based...Ch. 4 - What steps are involved in developing an activity-...Ch. 4 - Prob. 8Q Ch. 4 - What is an activity cost pool?Ch. 4 - Prob. 10Q

Solution Summary: The author calculates the overhead rate for Initial Concept Formation, machining, and construction oversight.

Concept explainers

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Activity cost pool: Activity cost pool refers to the overhead cost related to an activity. This is often calculated to get an accurate estimate of the production cost.

To Classify: The given cost pool on the basis of the level of activities.

Want to see the full answer?

Chapter 4 Solutions

Solution Summary: The author calculates the overhead rate for Initial Concept Formation, machining, and construction oversight.

Concept explainers

Videos

Activity cost pool: Activity cost pool refers to the overhead cost related to an activity. This is often calculated to get an accurate estimate of the production cost. To Classify: The given cost pool on the basis of the level of activities.

Want to see the full answer?

Chapter 4 Solutions

Activity cost pool: Activity cost pool refers to the overhead cost related to an activity. This is often calculated to get an accurate estimate of the production cost.

To Classify: The given cost pool on the basis of the level of activities.