Requirement 1. Using activity-based costing, calculate the gross margin per unit of the Maximum and Mammoth models. Begin by calculating the total cost of goods sold for each model. (Round intermediary calculations to the nearest cent) Requirement 2. Explain briefly why these numburs difler from the groas margn per unit of the Mtamum and Mammoth modele calculated using Provencers existing simple costing system. Provencer's simple costing system allocates all manutacturing overhead other than machine costs on the basis of Consequently, the per unit that a product needs, the the manufacturing overhead allocated to it uning the simple costing system. Because Mamncen por unit campared to Maximum, amount of manulacturng ovemead is allocated to Mammoth. The ABC system recognizes Maximumit use of manufacturing ovethead and rosuls in Maximum showing profitablity, By the same token, the ABC analysis shows that Marnmoth is The simple costing aystem Mammoth and so made tt appear profitable. quirement 4. How might Provencer find the ABC information helptul in managing its business? (Select al that apply) A. ABM highlights possible improwoments, including reduction or eliminaton of non-value-added activises, selecting lower cost actevies, sharing activetes with ocher products, and elminating waste. B. ABM is an integrated approach that focuses management's attention on analyzing the dicect costs incurred in the manufacturing process wte the ultimath aim of cost reduction. C. ABM is an integrated approech that tocuses managemenrs attention on activites with the ultimate am of conthuous improvement D. As a whole-company philosophy. ABM focuses on strategic, as well as tactical and operational activites of the company. E. Activity based management (ABM) is a management system where each component in a production line is manutactured onily when is is needed in the next step of the process F. Activity based management ( ABM) is the use of information from activly based costing to make improwements in a firm. Q. For the long term, activity-based costing can assist management in making decisions regording the productivity of the employees. H. Activity-based management is an integratve philosophy of management for conthucusty improving the quasty of products and prucesses by foscasing prenarily on the isrect labor costs. 1. For the long term, activitybased costing can assst manajement in maving decisions regarding the viabialy of product lines, distributan channels, maketing strategiek, etc Requirement 5. What should Sam Jacobi do in responses to Campbelis comments? (Select al that apply) In assessing the situation, first consider the "Standarts of Ethical Conduct for Management Accountants" that could potentially be violated in this stuation. A. Credibility B. Competences C. Confidentiality D. Integrity E. None of the standards are potentialy viotated in this stuation What should Sam Jacobi do in response to Campbeirs comments? A. Incorrect reporting of ABC costs with the goal of retaining both the Marnmoth and Maximum product lines is unethicat, Jacobi should indicale to Campbet that the product cost these steps, there is continued pressure to modity product cost numbers. Jacobi should consider revigaing from the company rather than engage in unethical behavior. B. Incorrect reporting of ABC costs wth the goal of retaining both the Mammoth and Maximum product lines is not unetrical as the information is based on estimasos rasher than historical data Once the informaton is communicated to Campbell, Jacobi is not obligated to take any further action. C. Incorrect reporting of ABC costs with the goal of retaining both tho Mtarmoth and Mavimum product lines is unethical. Jacobi should indicate to Campbell that the product cost caiculations are, indeed, appropriate. If Campbell ssal insists on modtyng the produet cost numbers, Jacobi is not obligated to take any further action because Campbell is Kis superiar. D. Incorrect reporting of ABC costs with the goal of retaining both the Marnenoth and Maximum product ines is etrical, Jacobi has the obloation 60 follow the wishes of his immediate supervisor. Fraising the matter with one of Campbeli's superices would be unethical. Question list More info cClok vie cont b vaw the Nid data? thend the iesiremests Cy caiculakiva to the charest cenc, Data table Requirement 3. Comment on Campbeli's conceens about the acturacy and imitabcons of ABC, (Select all that apply). A. Adding more activises would have no impact on the complexity of the system and should be inexpentive to impiement it would not necessarly improve the accuracy of cast informalion and therefore may not imperove decision making B. When designing and implementing ABC systems, it is not necessary for managers and management accountants to trade off the costs of the oysinm ogainst its benefits. C. Campbeirs commens about ABC implementation are not valid D. Compberir comments about ABC implementation are valis E. Using inspection hours and setup hours as allocation bases would probably not lead to more accurate cost information and would atso have no effoct on measurement costs. 5. When designing and implementing ABC systems, managers and manogement accocuntants need to trade off the conts of the systoen aganat its bonefits. 6. Adding more activles would make the syatem harder to understand and more costly to implement, but at would probably improve the accuracy of cost information, which, in tum, would help Provencer mako botter debicons. H. Using inspection-houn and sebjp-hours as allocation bases would also probably lead to more accurate cost information, but it would increase measurement costs. Requirement 1. Using activity-based costing, calculate the gross margin per unit of the Maximum and Mammoth models. Begin by calculating the total cost of goods sold for each model. (Round intermediary calculations to the nearest cent) Requirement 2. Explain briefly why these numburs difler from the groas margn per unit of the Mtamum and Mammoth modele calculated using Provencers existing simple costing system. Provencer's simple costing system allocates all manutacturing overhead other than machine costs on the basis of Consequently, the per unit that a product needs, the the manufacturing overhead allocated to it uning the simple costing system. Because Mamncen por unit campared to Maximum, amount of manulacturng ovemead is allocated to Mammoth. The ABC system recognizes Maximumit use of manufacturing ovethead and rosuls in Maximum showing profitablity, By the same token, the ABC analysis shows that Marnmoth is The simple costing aystem Mammoth and so made tt appear profitable. quirement 4. How might Provencer find the ABC information helptul in managing its business? (Select al that apply) A. ABM highlights possible improwoments, including reduction or eliminaton of non-value-added activises, selecting lower cost actevies, sharing activetes with ocher products, and elminating waste. B. ABM is an integrated approach that focuses management's attention on analyzing the dicect costs incurred in the manufacturing process wte the ultimath aim of cost reduction. C. ABM is an integrated approech that tocuses managemenrs attention on activites with the ultimate am of conthuous improvement D. As a whole-company philosophy. ABM focuses on strategic, as well as tactical and operational activites of the company. E. Activity based management (ABM) is a management system where each component in a production line is manutactured onily when is is needed in the next step of the process F. Activity based management ( ABM) is the use of information from activly based costing to make improwements in a firm. Q. For the long term, activity-based costing can assist management in making decisions regording the productivity of the employees. H. Activity-based management is an integratve philosophy of management for conthucusty improving the quasty of products and prucesses by foscasing prenarily on the isrect labor costs. 1. For the long term, activitybased costing can assst manajement in maving decisions regarding the viabialy of product lines, distributan channels, maketing strategiek, etc Requirement 5. What should Sam Jacobi do in responses to Campbelis comments? (Select al that apply) In assessing the situation, first consider the "Standarts of Ethical Conduct for Management Accountants" that could potentially be violated in this stuation. A. Credibility B. Competences C. Confidentiality D. Integrity E. None of the standards are potentialy viotated in this stuation What should Sam Jacobi do in response to Campbeirs comments? A. Incorrect reporting of ABC costs with the goal of retaining both the Marnmoth and Maximum product lines is unethicat, Jacobi should indicale to Campbet that the product cost these steps, there is continued pressure to modity product cost numbers. Jacobi should consider revigaing from the company rather than engage in unethical behavior. B. Incorrect reporting of ABC costs wth the goal of retaining both the Mammoth and Maximum product lines is not unetrical as the information is based on estimasos rasher than historical data Once the informaton is communicated to Campbell, Jacobi is not obligated to take any further action. C. Incorrect reporting of ABC costs with the goal of retaining both tho Mtarmoth and Mavimum product lines is unethical. Jacobi should indicate to Campbell that the product cost caiculations are, indeed, appropriate. If Campbell ssal insists on modtyng the produet cost numbers, Jacobi is not obligated to take any further action because Campbell is Kis superiar. D. Incorrect reporting of ABC costs with the goal of retaining both the Marnenoth and Maximum product ines is etrical, Jacobi has the obloation 60 follow the wishes of his immediate supervisor. Fraising the matter with one of Campbeli's superices would be unethical. Question list More info cClok vie cont b vaw the Nid data? thend the iesiremests Cy caiculakiva to the charest cenc, Data table Requirement 3. Comment on Campbeli's conceens about the acturacy and imitabcons of ABC, (Select all that apply). A. Adding more activises would have no impact on the complexity of the system and should be inexpentive to impiement it would not necessarly improve the accuracy of cast informalion and therefore may not imperove decision making B. When designing and implementing ABC systems, it is not necessary for managers and management accountants to trade off the costs of the oysinm ogainst its benefits. C. Campbeirs commens about ABC implementation are not valid D. Compberir comments about ABC implementation are valis E. Using inspection hours and setup hours as allocation bases would probably not lead to more accurate cost information and would atso have no effoct on measurement costs. 5. When designing and implementing ABC systems, managers and manogement accocuntants need to trade off the conts of the systoen aganat its bonefits. 6. Adding more activles would make the syatem harder to understand and more costly to implement, but at would probably improve the accuracy of cost information, which, in tum, would help Provencer mako botter debicons. H. Using inspection-houn and sebjp-hours as allocation bases would also probably lead to more accurate cost information, but it would increase measurement costs