Activity-based costing: It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each. Requirement 1: Plant wide overhead rate based on cases, computation of overhead cost that is allocated to each case of extra fine and family style.

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Answer 1

Question

Chapter 4, Problem 5PSA

To determine

Concept introduction:

Activity-based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 1:

Plant wide overhead rate based on cases, computation of overhead cost that is allocated to each case of extra fine and family style.

To determine

Concept introduction:

Activity-based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 2:

To explain:

By using plant wide overhead rate evaluate total cost per unit for two products if direct material and labour for extra fine and family style is $6 and $5/case.

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 3:

Gross profit for extra fine and family style if market price $18 per case and $9 per case.

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 4:

Total cost per case for each product if direct material and direct labour for extra fine and family style is $6 per case and $5 per case.

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 5:

If market price is $18 for extra fine and $9 for family style determining its gross profit.

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 6:

Pricing analysis be improved if the corporate used departmental rate based on machine hours in department 1 and number of cases in department 2 instead of activity based costing.

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Sara’s Salsa Company produces its condiments in two types: Extra Fine for restaurant customers and Family Style for home use. Salsa is prepared in department 1 and packaged in department 2. The activities, overhead costs, and drivers associated with these two manufacturing processes and the company’s production support activities follow. Process Activity Overhead cost Driver Quantity Department 1 Mixing $ 4,500 Machine hours 1,500 Cooking 11,250 Machine hours 1,500 Product testing 112,500 Batches 600 $ 128,250 Department 2 Machine calibration $ 250,000 Production runs 400 Labeling 12,000 Cases of output 120,000 Defects 6,000 Cases of output 120,000 $ 268,000 Support Recipe formulation $ 90,000 Focus groups 45 Heat, lights, and water 27,000 Machine hours 1,500 Materials handling 65,000 Container types 8 $ 182,000 Additional production information about its two product lines…

[The following information applies to the questions displayed below.]Sara’s Salsa Company produces its condiments in two types: Extra Fine for restaurant customers and Family Style for home use. Salsa is prepared in department 1 and packaged in department 2. The activities, overhead costs, and drivers associated with these two manufacturing processes and the company’s production support activities follow. Process Activity Overhead cost Driver Quantity Department 1 Mixing $ 5,300 Machine hours 1,700 Cooking 10,000 Machine hours 1,700 Product testing 113,300 Batches 550 $ 128,600 Department 2 Machine calibration $ 290,000 Production runs 800 Labeling 16,000 Cases of output 130,000 Defects 10,000 Cases of output 130,000 $ 316,000 Support Recipe formulation $ 98,000 Focus groups 50 Heat, lights, and water 34,000 Machine hours 1,700 Materials handling 73,000 Container types 10 $ 205,000…

Hickory Grill Company manufactures two types of cooking grills: the Gas Cooker and the Charcoal Smoker. The Cooker is a premium product sold in upscale outdoor shops; the Smoker is sold in major discount stores. Following is information pertaining to the manufacturing costs for the current month. Units Number of batches Number of batch moves Direct materials Direct labor Total cost Gas Cooker $ $ Charcoal Smoker $ Gas Cooker Charcoal Smoker 2,000 8,000 20 50 Manufacturing overhead follows: Activity Cost Cost Driver Materials acquisition and inspection $68,000 Amount of direct materials cost Materials movement 19,600 Numbers of batch moves Scheduling 43,400 Number of batches 50 90 $70,000 $ 44,000 Rounding instructions: Do not round until your final answers, Round total cost answers to the nearest dollar and per unit answers to the nearest cent. $ $ Charcoal Smoker $ (a) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming…

Answer 2

Question

Chapter 4, Problem 5PSA

To determine

Concept introduction:

Activity-based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 1:

Plant wide overhead rate based on cases, computation of overhead cost that is allocated to each case of extra fine and family style.

To determine

Concept introduction:

Activity-based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 2:

To explain:

By using plant wide overhead rate evaluate total cost per unit for two products if direct material and labour for extra fine and family style is $6 and $5/case.

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 3:

Gross profit for extra fine and family style if market price $18 per case and $9 per case.

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 4:

Total cost per case for each product if direct material and direct labour for extra fine and family style is $6 per case and $5 per case.

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 5:

If market price is $18 for extra fine and $9 for family style determining its gross profit.

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 6:

Pricing analysis be improved if the corporate used departmental rate based on machine hours in department 1 and number of cases in department 2 instead of activity based costing.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 4, Problem 5PSA

To determine

Concept introduction:

Activity-based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 1:

Plant wide overhead rate based on cases, computation of overhead cost that is allocated to each case of extra fine and family style.

To determine

Concept introduction:

Activity-based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 2:

To explain:

By using plant wide overhead rate evaluate total cost per unit for two products if direct material and labour for extra fine and family style is $6 and $5/case.

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 3:

Gross profit for extra fine and family style if market price $18 per case and $9 per case.

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 4:

Total cost per case for each product if direct material and direct labour for extra fine and family style is $6 per case and $5 per case.

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 5:

If market price is $18 for extra fine and $9 for family style determining its gross profit.

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 6:

Pricing analysis be improved if the corporate used departmental rate based on machine hours in department 1 and number of cases in department 2 instead of activity based costing.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 4, Problem 5PSA

To determine

Concept introduction:

Activity-based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 1:

Plant wide overhead rate based on cases, computation of overhead cost that is allocated to each case of extra fine and family style.

To determine

Concept introduction:

Activity-based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 2:

To explain:

By using plant wide overhead rate evaluate total cost per unit for two products if direct material and labour for extra fine and family style is $6 and $5/case.

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 3:

Gross profit for extra fine and family style if market price $18 per case and $9 per case.

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 4:

Total cost per case for each product if direct material and direct labour for extra fine and family style is $6 per case and $5 per case.

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 5:

If market price is $18 for extra fine and $9 for family style determining its gross profit.

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 6:

Pricing analysis be improved if the corporate used departmental rate based on machine hours in department 1 and number of cases in department 2 instead of activity based costing.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 4, Problem 5PSA

To determine

Concept introduction:

Activity-based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 1:

Plant wide overhead rate based on cases, computation of overhead cost that is allocated to each case of extra fine and family style.

To determine

Concept introduction:

Activity-based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 2:

To explain:

By using plant wide overhead rate evaluate total cost per unit for two products if direct material and labour for extra fine and family style is $6 and $5/case.

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 3:

Gross profit for extra fine and family style if market price $18 per case and $9 per case.

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 4:

Total cost per case for each product if direct material and direct labour for extra fine and family style is $6 per case and $5 per case.

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 5:

If market price is $18 for extra fine and $9 for family style determining its gross profit.

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 6:

Pricing analysis be improved if the corporate used departmental rate based on machine hours in department 1 and number of cases in department 2 instead of activity based costing.

Answer 6

Chapter 4, Problem 5PSA

To determine

Concept introduction:

Activity-based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 1:

Plant wide overhead rate based on cases, computation of overhead cost that is allocated to each case of extra fine and family style.

Answer 7

Chapter 4, Problem 5PSA

To determine

Concept introduction:

Activity-based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 1:

Plant wide overhead rate based on cases, computation of overhead cost that is allocated to each case of extra fine and family style.

Answer 8

To determine

Concept introduction:

Activity-based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 2:

To explain:

By using plant wide overhead rate evaluate total cost per unit for two products if direct material and labour for extra fine and family style is $6 and $5/case.

Answer 9

To determine

Concept introduction:

Activity-based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 2:

To explain:

By using plant wide overhead rate evaluate total cost per unit for two products if direct material and labour for extra fine and family style is $6 and $5/case.

Answer 10

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 3:

Gross profit for extra fine and family style if market price $18 per case and $9 per case.

Answer 11

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 3:

Gross profit for extra fine and family style if market price $18 per case and $9 per case.

Answer 12

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 4:

Total cost per case for each product if direct material and direct labour for extra fine and family style is $6 per case and $5 per case.

Answer 13

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 4:

Total cost per case for each product if direct material and direct labour for extra fine and family style is $6 per case and $5 per case.

Answer 14

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 5:

If market price is $18 for extra fine and $9 for family style determining its gross profit.

Answer 15

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 5:

If market price is $18 for extra fine and $9 for family style determining its gross profit.

Answer 16

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 6:

Pricing analysis be improved if the corporate used departmental rate based on machine hours in department 1 and number of cases in department 2 instead of activity based costing.

Answer 17

To determine

Concept introduction:

Activity based costing:

It is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

Requirement 6:

Pricing analysis be improved if the corporate used departmental rate based on machine hours in department 1 and number of cases in department 2 instead of activity based costing.

Answer 18

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Answer 19

Expert Solution & Answer

Answer 20

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Answer 21

Ch. 4 - Prob. 1MCQ Ch. 4 - Prob. 2MCQ Ch. 4 - All of the following are examples of batch-level...Ch. 4 - Prob. 4MCQ Ch. 4 - Prob. 5MCQ Ch. 4 - Why are overhead costs allocated to products and...Ch. 4 - What are three common methods of assigning...Ch. 4 - Why are direct labor hours and machine hours...Ch. 4 - What are the advantages of using a single plant...Ch. 4 - The usefulness of a single plant wide overhead...

Solution Summary: The author explains that activity-based costing is a method that identifies activities in an association and assigns the cost of each activity to all the goods and services according to the real consumption by each.

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