Reference no: EM132447460

Contrasting Traditional Costing and Activity-Based Costing

Question 1. Compute the cost of each product under the simple/traditional costing method. For period costs, use direct labor hours.

Question 2. Compute the net operating profit margin of each product using the simple/traditional costing method.

Question 3. Compute the total overhead and period cost allocation under ABC assumptions for each product.

Question 4. Compute the per unit ABC cost of each product.

Question 5. Compute the net profit margin of each product using the ABC costing method.

Question 6. Compare the net profit margin of the products under the simple/traditional cost assignment and the ABC assignment for each product. Evaluate the difference.

Question 7. On a separate Excel workbook tab, write a brief explanation (approximately 2 paragraphs) that the controller might deliver to management to justify the use of ABC for these two products