Question: answer all parts to the following question 1 using the...
answer all parts to the following question:
1. Using the traditional costing method, compute the overhead per product:
a) Under ABC: calculate the activity-based overhead rates per activity cost driver
b) Under ABC: For each product, compute the overhead cost per activity cost driver.
c) Using the overhead cost from b., calculate the total cost per product.
d) Assuming ABC allocated overhead more accurately, which products were using the traditional costing method?
e) What difficulties might result from incorrectly budgeted products? (Hint: think about how capital resources should be allocated to the most efficient opportunities.
f) Compare assigned cost per product under both methods. Why has the activity-based costing changed the total costs assigned to each product?
g) What were two circumstances with traditional and ABC costing would likely yield similar or equal overhead costs?