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Instructions (a) Under traditional product costing, compute the total unit cost of each product.
Prepare a simple comparative schedule of the individual costs by product (similar to Illustration 17-
3 on page 837). (b) Under ABC, prepare a schedule showing the computations of the activity-
based overhead rates (per cost driver). (c) Prepare a schedule assigning each activity's overhead
cost pool to each product based on the use of cost drivers. (Include a computation of overhead
cost per unit, rounding to the nearest cent.) (d) Compute the total cost per unit for each product
under ABC. (e) Classify each of the activities as a value-added activity or a non-value-added
activity. f) Comment on (1) the comparative overhead cost per unit for the two products under ABC
, and (2) the comparative total costs per unit under traditional costing and ABC.Heine Model
Commercial Model Total uint cost. 5

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Instructions a Under traditional product costing compute .pdf

  • 1. Instructions (a) Under traditional product costing, compute the total unit cost of each product. Prepare a simple comparative schedule of the individual costs by product (similar to Illustration 17- 3 on page 837). (b) Under ABC, prepare a schedule showing the computations of the activity- based overhead rates (per cost driver). (c) Prepare a schedule assigning each activity's overhead cost pool to each product based on the use of cost drivers. (Include a computation of overhead cost per unit, rounding to the nearest cent.) (d) Compute the total cost per unit for each product under ABC. (e) Classify each of the activities as a value-added activity or a non-value-added activity. f) Comment on (1) the comparative overhead cost per unit for the two products under ABC , and (2) the comparative total costs per unit under traditional costing and ABC.Heine Model Commercial Model Total uint cost. 5