(a) Introduction: ABC system was developed to deal with the loopholes of traditional costing system. It helps in finding the total cost of activities that are necessary to make a product. In this method the costs are assigned to each activity that goes into production. To compute: The activity rates for each Cost pool assumingABC system is used by S.

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Answer 1

Question

Chapter 4, Problem 10E

To determine

(a)

Introduction:

ABC system was developed to deal with the loopholes of traditional costing system. It helps in finding the total cost of activities that are necessary to make a product. In this method the costs are assigned to each activity that goes into production.

To compute:

The activity rates for each Cost pool assumingABC system is used by S.

To determine

(b)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Ex. Insurance, rent etc.

To compute:

The amount of overhead that S will assign to the Standard floor mat line.

To determine

(c)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Examples are, insurance, rent, etc.

To compute:

To determine the amount of overhead that S will assign to the deluxe product line.

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Overhead costs are assigned to each product based on ________. Group of answer choices A. the proportion of that product’s use of the cost driver B. a predetermined overhead rate for a single cost driver C. price of the product D. machine hours per product

Precision Manufacturing Inc. (PMI) makes two types of industrial component parts-the EX300 and the TX500. It annually produces 69,000 units of EX300 and 13,400 units of TX500. The company's conventional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labor dollars as the allocation base. Additional information relating to the company's two product lines is shown below: EX300 $375,325 $129,000 Total $546,875 $176,000 TX500 Direct materials Direct labor $171,550 $ 47,000 The company is considering implementing an activity-based costing system that distributes all of its manufacturing overhead to four activities as shown below: Activity Manufacturing Overhead $182,600 249,900 187,070 84,460 $704,000 Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product-level (number of products) General factory (direct labor dollars) EX300 99,000 120 1 TX500 67,000 390 1 Total 166,000 510 2 $129,000 $47,000…

1. With ABC, overhead costs are assigned to each product based on ________. Group of answer choices machine hours per product price of the product a predetermined overhead rate for a single cost driver the proportion of that product’s use of the cost driver

Answer 2

Question

Chapter 4, Problem 10E

To determine

(a)

Introduction:

ABC system was developed to deal with the loopholes of traditional costing system. It helps in finding the total cost of activities that are necessary to make a product. In this method the costs are assigned to each activity that goes into production.

To compute:

The activity rates for each Cost pool assumingABC system is used by S.

To determine

(b)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Ex. Insurance, rent etc.

To compute:

The amount of overhead that S will assign to the Standard floor mat line.

To determine

(c)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Examples are, insurance, rent, etc.

To compute:

To determine the amount of overhead that S will assign to the deluxe product line.

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Answer 3

Question

Chapter 4, Problem 10E

To determine

(a)

Introduction:

ABC system was developed to deal with the loopholes of traditional costing system. It helps in finding the total cost of activities that are necessary to make a product. In this method the costs are assigned to each activity that goes into production.

To compute:

The activity rates for each Cost pool assumingABC system is used by S.

To determine

(b)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Ex. Insurance, rent etc.

To compute:

The amount of overhead that S will assign to the Standard floor mat line.

To determine

(c)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Examples are, insurance, rent, etc.

To compute:

To determine the amount of overhead that S will assign to the deluxe product line.

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Answer 4

Question

Chapter 4, Problem 10E

To determine

(a)

Introduction:

ABC system was developed to deal with the loopholes of traditional costing system. It helps in finding the total cost of activities that are necessary to make a product. In this method the costs are assigned to each activity that goes into production.

To compute:

The activity rates for each Cost pool assumingABC system is used by S.

To determine

(b)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Ex. Insurance, rent etc.

To compute:

The amount of overhead that S will assign to the Standard floor mat line.

To determine

(c)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Examples are, insurance, rent, etc.

To compute:

To determine the amount of overhead that S will assign to the deluxe product line.

Expert Solution & Answer

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Answer 5

Chapter 4, Problem 10E

To determine

(a)

Introduction:

ABC system was developed to deal with the loopholes of traditional costing system. It helps in finding the total cost of activities that are necessary to make a product. In this method the costs are assigned to each activity that goes into production.

To compute:

The activity rates for each Cost pool assumingABC system is used by S.

To determine

(b)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Ex. Insurance, rent etc.

To compute:

The amount of overhead that S will assign to the Standard floor mat line.

To determine

(c)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Examples are, insurance, rent, etc.

To compute:

To determine the amount of overhead that S will assign to the deluxe product line.

Answer 6

Chapter 4, Problem 10E

To determine

(a)

Introduction:

ABC system was developed to deal with the loopholes of traditional costing system. It helps in finding the total cost of activities that are necessary to make a product. In this method the costs are assigned to each activity that goes into production.

To compute:

The activity rates for each Cost pool assumingABC system is used by S.

Answer 7

Chapter 4, Problem 10E

To determine

(a)

Introduction:

ABC system was developed to deal with the loopholes of traditional costing system. It helps in finding the total cost of activities that are necessary to make a product. In this method the costs are assigned to each activity that goes into production.

To compute:

The activity rates for each Cost pool assumingABC system is used by S.

Answer 8

To determine

(b)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Ex. Insurance, rent etc.

To compute:

The amount of overhead that S will assign to the Standard floor mat line.

Answer 9

To determine

(b)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Ex. Insurance, rent etc.

To compute:

The amount of overhead that S will assign to the Standard floor mat line.

Answer 10

To determine

(c)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Examples are, insurance, rent, etc.

To compute:

To determine the amount of overhead that S will assign to the deluxe product line.

Answer 11

To determine

(c)

Introduction:

The overhead cost is the indirect cost or the cost which is not directly related to manufacturing a product. It is the cost incurred to support the making and selling of product or service. Examples are, insurance, rent, etc.

To compute:

To determine the amount of overhead that S will assign to the deluxe product line.

Answer 12

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Answer 13

Expert Solution & Answer

Answer 14

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Answer 15

Ch. 4 - What is the difference between a volume-based cost...Ch. 4 - Explain the statement that traditional costing...Ch. 4 - Prob. 3Q Ch. 4 - How does activity-based costing differ from...Ch. 4 - What types of business might use activity-based...Ch. 4 - Prob. 6Q Ch. 4 - Prob. 7Q Ch. 4 - Prob. 8Q Ch. 4 - Why must costs be classified into different...Ch. 4 - Prob. 10Q

Solution Summary: The author explains the ABC system, which helps in finding the total cost of activities that are necessary to make a product.

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