Production and cost data Production and sales units Selling price (per unit) Materials (per unit) Dept. A Standrad 192000 $15 1.7 Labor (per unit) Manufacturing overheads Number of machine set-ups 4 Marketing overheads 4.3 Dept. B Designer wear 24000 $50 8 14.2 24 Engineering and PC Marketing and CS 745200 1296000 Use single-rate; direct method to allocate engineering and marketing overheads Engineering overheads include machine setting ($460,800) and inspection ($284,400) activities. Marketing involves channel ($496,000) and branding ($800,000) activities. The inspection and channel costs are driven by the number of units produced & sold. Computing product costs and profits under conventional and ABC approaches

Production and cost data Production and sales units Selling price (per unit) Materials (per unit) Dept. A Standrad 192000 $15 1.7 Labor (per unit) Manufacturing overheads Number of machine set-ups 4 Marketing overheads 4.3 Dept. B Designer wear 24000 $50 8 14.2 24 Engineering and PC Marketing and CS 745200 1296000 Use single-rate; direct method to allocate engineering and marketing overheads Engineering overheads include machine setting ($460,800) and inspection ($284,400) activities. Marketing involves channel ($496,000) and branding ($800,000) activities. The inspection and channel costs are driven by the number of units produced & sold. Computing product costs and profits under conventional and ABC approaches

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter4: Accounting For Factory Overhead

Section: Chapter Questions

Problem 4P: Using the data in P4-2 and Microsoft Excel: 1. Separate the variable and fixed elements. 2....

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Using the data in P4-2 and Microsoft Excel: 1. Separate the variable and fixed elements. 2. Determine the cost to be charged to the product for the year. 3. Determine the cost to be charged to factory overhead for the year. 4. Determine the plotted data points using Chart Wizard. 5. Determine R2. 6. How do these solutions compare to the solutions in P4-2 and P4-3? 7. What does R2 tell you about this cost model?
Wrappers Tape makes two products: Simple and Removable. It estimates it will produce 369,991 units of Simple and 146,100 of Removable, and the overhead for each of its cost pools is as follows: It has also estimated the activities for each cost driver as follows: Â How much is the overhead allocated to each unit of Simple and Removable?
Overhead costs are assigned to each product based on __________________. A. the proportion of that products 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
Describe the Source 01 the data for increasing Work in Process for (a) direct materials, (b) direct labor, and (c) factory overhead
An allocation base: a. can be units of output if the company has a single product O b. is determined before the period begins. O c. All the given answers are correct. O d. can be direct labor cost e. is a measure used to assign manufacturing overhead costs to products and services PAGE NEXT PAGE IZ TWO Jump CQURSE OUTLINE_SPRING2021 ► tv MacBook Air
es Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Machine processing Machine setups Production orders, Shipments Product sustaining Activity Rates 8 per direct labor-hour 4 per machine-hour $ 45 per setup $ 160 per order $ 130 per shipment $ 850 per product Machine-hours Machine setups Production orders Shipments $ $ Activity data have been supplied for the following two products: Total Expected Activity Number of units produced per year Direct labor-hours K425 200 975 2,200 19 19 38 M67 2,000 50 40 3 3 3
Title Brahtz Company uses an activity-based costing system. It has the following manufacturing activity ar Description Brahtz Company uses an activity-based costing system. It has the following manufacturing activity areas, related cost drivers and cost allocation rates:ActivityCost DriverCost Allocation RateMachine setupNumber of setups$25.00Materials handlingNumber of parts0.25MachiningMachine hours13.00AssemblyDirect labor hours22.00InspectionNumber of finished units7.00During the month, 100 units were produced, with no defects, requiring three setups. Each unit consisted of 17 parts, 3 direct labor hours and 2.5 machine hours. Direct materials cost $50 per finished unit.What is the total manufacturing cost for inspections?$-0-$700$90$7
PR 18-4A Activity-Based Product Costing Obj. 4 Mello Manufacturing Company is a diversified manufacturer that manufactures three products (Alpha, Beta, and Omega) in a continuous production process. Senior management has asked the controller to conduct an activity-based costing study. The controller identified the amount of factory overhead required by the critical activities of the organization as follows: Activity Production Setup Materials handling Inspection Product engineering The activity bases identified for each activity are as follows: Activity Production Alpha Beta 3. Setup Materials handling Inspection Product engineering Total Omega Total Activity Base Machine hours Number of setups Number of parts The activity-base usage quantities and units produced for the three products were determined from corporate records and are as follows: Number of inspection hours Number of engineering hours Machine Hours 1,440 1,080 720 3,240 Number of Setups Activity Cost Pool $259,200 55,000…
Assume Sherwin-Williams Company, a large paint manufacturer, has determined the following activity cost pools and cost driver levels for the latest period= Activity Cost Pool Activity Cost Activity Cost Driver Machine setup $900,000 2,500 setup hours Material handling 820,000 4,000 material moves Machine operation 400,000 20,000 machine hours The following data are for the production of single batches of two products, Mirlite and Subdue: Mirlite Subdue 60,000 25,000 400 250 800 250 Gallons produced Direct labor hours Machine hours Direct labor cost Direct materials cost Setup hours Material moves $10,000 $7,500 $360,000 $150,000 Direct materials Direct labor Determine the batch and unit costs per gallon of Mirlite and Subdue using ABC. Round cost per gallon to two decimal places. Product Costs $ 15 60 Manufacturing overhead: Machine setups Material handling Mirlite 12 35 0 x $ 0 x 0 x 0 x Subdue 0 x 0x 0x 0x
Zeus Industries manufactures two types of electrical power units, custom and standard, which involve four factory overhead activities-production setup, procurement, quality control, and materials management. An activity analysis of the overhead revealed the following estimated activity costs and activity bases for these activities: Activity Activity Cost Activity Base Production setup $ 97,500 Number of setups Procurement 137,500 Number of purchase orders (PO) Quality control 187,500 Number of inspections Materials management 100,000 Number of components Total $522,500 The activity-base usage quantities for each product are as follows: Purchase Setups Inspections Components Unit Volume Orders Custom 500 1,150 2,300 300 1,000 Standard 250 100 200 200 1,000 Total 750 1,250 2,500 500 2,000 a. Determine an activity rate for each activity. Activity Rates Production Setup Procurement Quality Control Materials Management Activity cost - Activity base Activity rate $4 /setup /PO $ /inspection…
Activity Cost Pool Cost Driver EstimatedOverhead Use perProduct A Use perProduct B Machine Setups Setups $144,000 6,000 2,000 Assembly Number of Parts 71,000 25,000 46,000 Machine Maintenance Machine Hours 200,000 13,000 37,000 Compare the overhead allocation using (A) the traditional allocation method and (B) the activity-based costing method. (Hint: the traditional method uses machine hours as the allocation base.) For those boxes in which you must enter subtractive or negative numbers use a minus sign.
PART 1: COMPLETING MISSING INFORMATION BONZZE Electronics manufactures two large-screen television models: the Foyale which sells for $1,800, and a new model, the Lajestic, which sells for $1,350. The production cost computed per unit under traditional costing for each model in 2021 was as follows. Traditional Costing Foyale Lajestic Direct materials Direct labor ($20 per hour) Mfg overhead ($38 per DLH) Total per unit cost $1,200 In 2021, BONZZE manufactured 26,000 units of the Foyale and 10,000 units of the Lajestic. The overhead rate of $38 per direct labor hour was determined by dividing total expected manufacturing overhead of $7,500,000 by the total direct labor hours (200,000) for the two models. Under traditional costing, the gross profit on the models was Foyale $600 or ($1,800 - $1,200), and Lajestic $570 or ($1,350 - $780). Because of this difference, management is considering phasing out the Foyale model and increasing the produc- tion of the Lajestic model. Cost Driver…