Activity-based costing is a method of allocation of overhead costs on the basis of different activities and their allocation bases. Under this method, the costs of each activity are allocated to the products on the basis of their allocation rates. To indicate: The classification of each activity.

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Answer 1

Question

Chapter 6A, Problem 6A.1E

To determine

Concept introduction:

Activity-based costing is a method of allocation of overhead costs on the basis of different activities and their allocation bases. Under this method, the costs of each activity are allocated to the products on the basis of their allocation rates.

To indicate: The classification of each activity.

Expert Solution & Answer

Explanation of Solution

The classification of each activity is as follows:

Activity #	Type
a	Batch Level	Raw materials are used for a batch of the product; hence receiving the raw materials is a batch level activity.
b	Product level	Management of parts inventory is a product-level activity.
c	Unit level	Milling work on the product is done at the unit level. Hence, it is a unit-level activity.
d	Organization level	Hiring new employees is an organization level activity.
e	Organization level	Designing a new product is an organization level activity.
f	Organization level	Performing preventive maintenance of equipment is an organization level activity.
g	Organization level	The use of general factory building is an organization level activity.
h	Batch Level	Issuing purchase orders for a job is a batch level activity.

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The Caldwell Division's operating data for the year 2019 is as follows: • Return on investment = 14% • • • Minimum required rate of return = 11% Average net operating assets = $620,000 Sales $2,100,000 = Compute the margin for 2019.

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Answer 2

Question

Chapter 6A, Problem 6A.1E

To determine

Concept introduction:

Activity-based costing is a method of allocation of overhead costs on the basis of different activities and their allocation bases. Under this method, the costs of each activity are allocated to the products on the basis of their allocation rates.

To indicate: The classification of each activity.

Expert Solution & Answer

Explanation of Solution

The classification of each activity is as follows:

Activity #	Type
a	Batch Level	Raw materials are used for a batch of the product; hence receiving the raw materials is a batch level activity.
b	Product level	Management of parts inventory is a product-level activity.
c	Unit level	Milling work on the product is done at the unit level. Hence, it is a unit-level activity.
d	Organization level	Hiring new employees is an organization level activity.
e	Organization level	Designing a new product is an organization level activity.
f	Organization level	Performing preventive maintenance of equipment is an organization level activity.
g	Organization level	The use of general factory building is an organization level activity.
h	Batch Level	Issuing purchase orders for a job is a batch level activity.

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Answer 3

Question

Chapter 6A, Problem 6A.1E

To determine

Concept introduction:

Activity-based costing is a method of allocation of overhead costs on the basis of different activities and their allocation bases. Under this method, the costs of each activity are allocated to the products on the basis of their allocation rates.

To indicate: The classification of each activity.

Expert Solution & Answer

Explanation of Solution

The classification of each activity is as follows:

Activity #	Type
a	Batch Level	Raw materials are used for a batch of the product; hence receiving the raw materials is a batch level activity.
b	Product level	Management of parts inventory is a product-level activity.
c	Unit level	Milling work on the product is done at the unit level. Hence, it is a unit-level activity.
d	Organization level	Hiring new employees is an organization level activity.
e	Organization level	Designing a new product is an organization level activity.
f	Organization level	Performing preventive maintenance of equipment is an organization level activity.
g	Organization level	The use of general factory building is an organization level activity.
h	Batch Level	Issuing purchase orders for a job is a batch level activity.

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Answer 4

Question

Chapter 6A, Problem 6A.1E

To determine

Concept introduction:

Activity-based costing is a method of allocation of overhead costs on the basis of different activities and their allocation bases. Under this method, the costs of each activity are allocated to the products on the basis of their allocation rates.

To indicate: The classification of each activity.

Expert Solution & Answer

Explanation of Solution

The classification of each activity is as follows:

Activity #	Type
a	Batch Level	Raw materials are used for a batch of the product; hence receiving the raw materials is a batch level activity.
b	Product level	Management of parts inventory is a product-level activity.
c	Unit level	Milling work on the product is done at the unit level. Hence, it is a unit-level activity.
d	Organization level	Hiring new employees is an organization level activity.
e	Organization level	Designing a new product is an organization level activity.
f	Organization level	Performing preventive maintenance of equipment is an organization level activity.
g	Organization level	The use of general factory building is an organization level activity.
h	Batch Level	Issuing purchase orders for a job is a batch level activity.

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Answer 5

Chapter 6A, Problem 6A.1E

To determine

Concept introduction:

Activity-based costing is a method of allocation of overhead costs on the basis of different activities and their allocation bases. Under this method, the costs of each activity are allocated to the products on the basis of their allocation rates.

To indicate: The classification of each activity.

Expert Solution & Answer

Explanation of Solution

The classification of each activity is as follows:

Activity #	Type
a	Batch Level	Raw materials are used for a batch of the product; hence receiving the raw materials is a batch level activity.
b	Product level	Management of parts inventory is a product-level activity.
c	Unit level	Milling work on the product is done at the unit level. Hence, it is a unit-level activity.
d	Organization level	Hiring new employees is an organization level activity.
e	Organization level	Designing a new product is an organization level activity.
f	Organization level	Performing preventive maintenance of equipment is an organization level activity.
g	Organization level	The use of general factory building is an organization level activity.
h	Batch Level	Issuing purchase orders for a job is a batch level activity.

Answer 6

Chapter 6A, Problem 6A.1E

To determine

Concept introduction:

Activity-based costing is a method of allocation of overhead costs on the basis of different activities and their allocation bases. Under this method, the costs of each activity are allocated to the products on the basis of their allocation rates.

To indicate: The classification of each activity.

Expert Solution & Answer

Explanation of Solution

The classification of each activity is as follows:

Activity #	Type
a	Batch Level	Raw materials are used for a batch of the product; hence receiving the raw materials is a batch level activity.
b	Product level	Management of parts inventory is a product-level activity.
c	Unit level	Milling work on the product is done at the unit level. Hence, it is a unit-level activity.
d	Organization level	Hiring new employees is an organization level activity.
e	Organization level	Designing a new product is an organization level activity.
f	Organization level	Performing preventive maintenance of equipment is an organization level activity.
g	Organization level	The use of general factory building is an organization level activity.
h	Batch Level	Issuing purchase orders for a job is a batch level activity.

Answer 7

Chapter 6A, Problem 6A.1E

To determine

Concept introduction:

Activity-based costing is a method of allocation of overhead costs on the basis of different activities and their allocation bases. Under this method, the costs of each activity are allocated to the products on the basis of their allocation rates.

To indicate: The classification of each activity.

Answer 8

Expert Solution & Answer

Explanation of Solution

The classification of each activity is as follows:

Activity #	Type
a	Batch Level	Raw materials are used for a batch of the product; hence receiving the raw materials is a batch level activity.
b	Product level	Management of parts inventory is a product-level activity.
c	Unit level	Milling work on the product is done at the unit level. Hence, it is a unit-level activity.
d	Organization level	Hiring new employees is an organization level activity.
e	Organization level	Designing a new product is an organization level activity.
f	Organization level	Performing preventive maintenance of equipment is an organization level activity.
g	Organization level	The use of general factory building is an organization level activity.
h	Batch Level	Issuing purchase orders for a job is a batch level activity.