Traditional Product Costing: Accounting process to determine the total cost incurred to manufacture a product on the basis of volume metric is known as traditional product costing. Overhead : Overhead refers to the costs, which are utilized in business activities, however cannot be related to a specific activity or product. Direct Labor Cost: Direct labor cost is the cost of the labor paid to the employees who are directly involved in the conversion of the raw materials to the finished products. For example: Wages paid to the mechanic. To compute: Total manufacturing cost per liter of products, under traditional costing.

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Answer 1

Question

Chapter 4, Problem 4.4AP

a)

To determine

Traditional Product Costing: Accounting process to determine the total cost incurred to manufacture a product on the basis of volume metric is known as traditional product costing.

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

Direct Labor Cost: Direct labor cost is the cost of the labor paid to the employees who are directly involved in the conversion of the raw materials to the finished products. For example: Wages paid to the mechanic.

To compute: Total manufacturing cost per liter of products, under traditional costing.

b)

To determine

Activity-Based Costing (ABC): Under activity-based costing the different cost is assigned to a different activity. The cost is determined on the basis of the activities performed by the business.

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

To Prepare: A schedule showing computation of overhead rates under activity-based costing.

c)

To determine

Cost Driver: The cost driver refers to the all the activities on which the money is spent to produce the product or the service. It has a cause-effect relationship with the resources utilized in production. The cost drivers are used to form the activity cost pools.

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 Prepare: The schedule to assign activity’s overhead cost pool to each product based on the uses of cost driver.

d)

To determine

Activity-Based Costing (ABC): Under activity-based costing the different cost is assigned to a different activity. The cost is determined on the basis of the activities performed by the business.

To Compute: The total manufacturing cost per unit for each product under activity-based costing.

e)

To determine

Activity-Based Costing (ABC): Under activity-based costing the different cost is assigned to a different activity. The cost is determined on the basis of the activities performed by the business.

Traditional Product Costing: Accounting process to determine the total cost incurred to manufacture a product on the basis of volume metric is known as traditional product costing.

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

To Write: A memo to JE discussing the implications of the analysis done.

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Answer 2

Question

Chapter 4, Problem 4.4AP

a)

To determine

Traditional Product Costing: Accounting process to determine the total cost incurred to manufacture a product on the basis of volume metric is known as traditional product costing.

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

Direct Labor Cost: Direct labor cost is the cost of the labor paid to the employees who are directly involved in the conversion of the raw materials to the finished products. For example: Wages paid to the mechanic.

To compute: Total manufacturing cost per liter of products, under traditional costing.

b)

To determine

Activity-Based Costing (ABC): Under activity-based costing the different cost is assigned to a different activity. The cost is determined on the basis of the activities performed by the business.

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

To Prepare: A schedule showing computation of overhead rates under activity-based costing.

c)

To determine

Cost Driver: The cost driver refers to the all the activities on which the money is spent to produce the product or the service. It has a cause-effect relationship with the resources utilized in production. The cost drivers are used to form the activity cost pools.

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 Prepare: The schedule to assign activity’s overhead cost pool to each product based on the uses of cost driver.

d)

To determine

Activity-Based Costing (ABC): Under activity-based costing the different cost is assigned to a different activity. The cost is determined on the basis of the activities performed by the business.

To Compute: The total manufacturing cost per unit for each product under activity-based costing.

e)

To determine

Activity-Based Costing (ABC): Under activity-based costing the different cost is assigned to a different activity. The cost is determined on the basis of the activities performed by the business.

Traditional Product Costing: Accounting process to determine the total cost incurred to manufacture a product on the basis of volume metric is known as traditional product costing.

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

To Write: A memo to JE discussing the implications of the analysis done.

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Answer 3

Question

Chapter 4, Problem 4.4AP

a)

To determine

Traditional Product Costing: Accounting process to determine the total cost incurred to manufacture a product on the basis of volume metric is known as traditional product costing.

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

Direct Labor Cost: Direct labor cost is the cost of the labor paid to the employees who are directly involved in the conversion of the raw materials to the finished products. For example: Wages paid to the mechanic.

To compute: Total manufacturing cost per liter of products, under traditional costing.

b)

To determine

Activity-Based Costing (ABC): Under activity-based costing the different cost is assigned to a different activity. The cost is determined on the basis of the activities performed by the business.

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

To Prepare: A schedule showing computation of overhead rates under activity-based costing.

c)

To determine

Cost Driver: The cost driver refers to the all the activities on which the money is spent to produce the product or the service. It has a cause-effect relationship with the resources utilized in production. The cost drivers are used to form the activity cost pools.

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 Prepare: The schedule to assign activity’s overhead cost pool to each product based on the uses of cost driver.

d)

To determine

Activity-Based Costing (ABC): Under activity-based costing the different cost is assigned to a different activity. The cost is determined on the basis of the activities performed by the business.

To Compute: The total manufacturing cost per unit for each product under activity-based costing.

e)

To determine

Activity-Based Costing (ABC): Under activity-based costing the different cost is assigned to a different activity. The cost is determined on the basis of the activities performed by the business.

Traditional Product Costing: Accounting process to determine the total cost incurred to manufacture a product on the basis of volume metric is known as traditional product costing.

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

To Write: A memo to JE discussing the implications of the analysis done.

Expert Solution & Answer

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Answer 4

Question

Chapter 4, Problem 4.4AP

a)

To determine

Traditional Product Costing: Accounting process to determine the total cost incurred to manufacture a product on the basis of volume metric is known as traditional product costing.

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

Direct Labor Cost: Direct labor cost is the cost of the labor paid to the employees who are directly involved in the conversion of the raw materials to the finished products. For example: Wages paid to the mechanic.

To compute: Total manufacturing cost per liter of products, under traditional costing.

b)

To determine

Activity-Based Costing (ABC): Under activity-based costing the different cost is assigned to a different activity. The cost is determined on the basis of the activities performed by the business.

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

To Prepare: A schedule showing computation of overhead rates under activity-based costing.

c)

To determine

Cost Driver: The cost driver refers to the all the activities on which the money is spent to produce the product or the service. It has a cause-effect relationship with the resources utilized in production. The cost drivers are used to form the activity cost pools.

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 Prepare: The schedule to assign activity’s overhead cost pool to each product based on the uses of cost driver.

d)

To determine

Activity-Based Costing (ABC): Under activity-based costing the different cost is assigned to a different activity. The cost is determined on the basis of the activities performed by the business.

To Compute: The total manufacturing cost per unit for each product under activity-based costing.

e)

To determine

Activity-Based Costing (ABC): Under activity-based costing the different cost is assigned to a different activity. The cost is determined on the basis of the activities performed by the business.

Traditional Product Costing: Accounting process to determine the total cost incurred to manufacture a product on the basis of volume metric is known as traditional product costing.

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

To Write: A memo to JE discussing the implications of the analysis done.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 4, Problem 4.4AP

a)

To determine

Traditional Product Costing: Accounting process to determine the total cost incurred to manufacture a product on the basis of volume metric is known as traditional product costing.

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

Direct Labor Cost: Direct labor cost is the cost of the labor paid to the employees who are directly involved in the conversion of the raw materials to the finished products. For example: Wages paid to the mechanic.

To compute: Total manufacturing cost per liter of products, under traditional costing.

b)

To determine

Activity-Based Costing (ABC): Under activity-based costing the different cost is assigned to a different activity. The cost is determined on the basis of the activities performed by the business.

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

To Prepare: A schedule showing computation of overhead rates under activity-based costing.

c)

To determine

Cost Driver: The cost driver refers to the all the activities on which the money is spent to produce the product or the service. It has a cause-effect relationship with the resources utilized in production. The cost drivers are used to form the activity cost pools.

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 Prepare: The schedule to assign activity’s overhead cost pool to each product based on the uses of cost driver.

d)

To determine

Activity-Based Costing (ABC): Under activity-based costing the different cost is assigned to a different activity. The cost is determined on the basis of the activities performed by the business.

To Compute: The total manufacturing cost per unit for each product under activity-based costing.

e)

To determine

Activity-Based Costing (ABC): Under activity-based costing the different cost is assigned to a different activity. The cost is determined on the basis of the activities performed by the business.

Traditional Product Costing: Accounting process to determine the total cost incurred to manufacture a product on the basis of volume metric is known as traditional product costing.

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

To Write: A memo to JE discussing the implications of the analysis done.

Answer 6

Chapter 4, Problem 4.4AP

a)

To determine

Traditional Product Costing: Accounting process to determine the total cost incurred to manufacture a product on the basis of volume metric is known as traditional product costing.

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

Direct Labor Cost: Direct labor cost is the cost of the labor paid to the employees who are directly involved in the conversion of the raw materials to the finished products. For example: Wages paid to the mechanic.

To compute: Total manufacturing cost per liter of products, under traditional costing.

Answer 7

Chapter 4, Problem 4.4AP

a)

To determine

Traditional Product Costing: Accounting process to determine the total cost incurred to manufacture a product on the basis of volume metric is known as traditional product costing.

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

Direct Labor Cost: Direct labor cost is the cost of the labor paid to the employees who are directly involved in the conversion of the raw materials to the finished products. For example: Wages paid to the mechanic.

To compute: Total manufacturing cost per liter of products, under traditional costing.

Answer 8

b)

To determine

Activity-Based Costing (ABC): Under activity-based costing the different cost is assigned to a different activity. The cost is determined on the basis of the activities performed by the business.

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

To Prepare: A schedule showing computation of overhead rates under activity-based costing.

Answer 9

b)

To determine

Activity-Based Costing (ABC): Under activity-based costing the different cost is assigned to a different activity. The cost is determined on the basis of the activities performed by the business.

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

To Prepare: A schedule showing computation of overhead rates under activity-based costing.

Answer 10

c)

To determine

Cost Driver: The cost driver refers to the all the activities on which the money is spent to produce the product or the service. It has a cause-effect relationship with the resources utilized in production. The cost drivers are used to form the activity cost pools.

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 Prepare: The schedule to assign activity’s overhead cost pool to each product based on the uses of cost driver.

Answer 11

c)

To determine

Cost Driver: The cost driver refers to the all the activities on which the money is spent to produce the product or the service. It has a cause-effect relationship with the resources utilized in production. The cost drivers are used to form the activity cost pools.

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 Prepare: The schedule to assign activity’s overhead cost pool to each product based on the uses of cost driver.

Answer 12

d)

To determine

Activity-Based Costing (ABC): Under activity-based costing the different cost is assigned to a different activity. The cost is determined on the basis of the activities performed by the business.

To Compute: The total manufacturing cost per unit for each product under activity-based costing.

Answer 13

d)

To determine

Activity-Based Costing (ABC): Under activity-based costing the different cost is assigned to a different activity. The cost is determined on the basis of the activities performed by the business.

To Compute: The total manufacturing cost per unit for each product under activity-based costing.

Answer 14

e)

To determine

Activity-Based Costing (ABC): Under activity-based costing the different cost is assigned to a different activity. The cost is determined on the basis of the activities performed by the business.

Traditional Product Costing: Accounting process to determine the total cost incurred to manufacture a product on the basis of volume metric is known as traditional product costing.

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

To Write: A memo to JE discussing the implications of the analysis done.

Answer 15

e)

To determine

Activity-Based Costing (ABC): Under activity-based costing the different cost is assigned to a different activity. The cost is determined on the basis of the activities performed by the business.

Traditional Product Costing: Accounting process to determine the total cost incurred to manufacture a product on the basis of volume metric is known as traditional product costing.

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

To Write: A memo to JE discussing the implications of the analysis done.

Answer 16

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Answer 17

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Answer 18

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Answer 19

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 explains how to calculate the total manufacturing cost per unit for CoolDay and LiteMist.

Activity-Based Costing (ABC): Under activity-based costing the different cost is assigned to a different activity. The cost is determined on the basis of the activities performed by the business.

To Compute: The total manufacturing cost per unit for each product under activity-based costing.

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Chapter 4 Solutions

Solution Summary: The author explains how to calculate the total manufacturing cost per unit for CoolDay and LiteMist.

Activity-Based Costing (ABC): Under activity-based costing the different cost is assigned to a different activity. The cost is determined on the basis of the activities performed by the business. To Compute: The total manufacturing cost per unit for each product under activity-based costing.

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Chapter 4 Solutions

Activity-Based Costing (ABC): Under activity-based costing the different cost is assigned to a different activity. The cost is determined on the basis of the activities performed by the business.

To Compute: The total manufacturing cost per unit for each product under activity-based costing.