Can you please help me with question B Question 3Matilda Manufacturing designs and manufactures four products A, B, C and D for thetelecommunications industry. Output and cost data for the period just ended are as follows:ABCDNo of production MaterialOutput runs in thecost perunitperiod£40804080Units1520100350436417Short run variable costsSet-up costsExpediting and scheduling costsMaterials Handling CostsDirect labourhours per unit4,0008,0007,0006,00025,0001Direct labour cost per hour is £6. Overhead costs are as follows:£Nww.2The following cost drivers have been identified:Short run Variable CostsSet up costsExpediting and Scheduling CostsMaterials Handling CostsRequired:a) Calculate the product cost using a Traditional and ABC approach.= Production Runs= Production Runs= Machine Hours= Labour HoursMachinehours perunit~4~~222b) Discuss and analyse alternative methods available to businesses of allocating costs.

Cost per unit under Traditional costing system: Particulars Product A Product B Product C Product…

Answered: a) Calculate the product cost using a…

a) Calculate the product cost using a Traditional and ABC approach. b) Discuss and analyse alternative methods available to businesses of allocating costs.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 69P: (Appendix 3A) Separating Fixed and Variable Costs, Service Setting Louise McDermott, controller for...

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(Appendix 3A) Separating Fixed and Variable Costs, Service Setting Louise McDermott, controller for the Galvin plant of Veromar Inc., wanted to determine the cost behavior of moving materials throughout the plant. She accumulated the following data on the number of moves (from 100 to 800 in increments of 100) and the total cost of moving materials at those levels of moves: Required: 1. Prepare a scattergraph based on these data. Use cost for the vertical axis and number of moves for the horizontal axis. Based on an examination of the scattergraph, does there appear to be a linear relationship between the total cost of moving materials and the number of moves? 2. Compute the cost formula for moving materials by using the high-low method. Calculate the predicted cost for a month with 550 moves by using the high-low formula. (Note: Round the answer for the variable rate to three decimal places and the answer for total fixed cost and total cost to the nearest dollar.) 3. CONCEPTUAL CONNECTION Compute the cost formula for moving materials using the method of least squares. (Note: For the method of least squares, round the variable rate to two decimal places and total fixed cost and total cost to the nearest dollar.) Using the regression cost formula, what is the predicted cost for a month with 550 moves? What does the coefficient of determination tell you about the cost formula computed by regression? 4. CONCEPTUAL CONNECTION Evaluate the cost formula using the least squares coefficients. Could it be improved? Try dropping the third data point (300, 3,400), and rerun the regression.
Saved Help Sav CH 07 i Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system cont following six activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Machine processing Machine setups Activity Rates $6 per direct labor-hour $ 4 per machine-hour $ 50 per setup $ 90 per order $ 14 per shipment $ 840 per product Production orders Shipments Product sustaining Activity data have been supplied for the following two products: Total Expected Activity K425 M67 Number of units produced per year Direct labor-hours 200 2,000 80 500 Machine-hours Machine setups Production orders 100 1,500 1 4 4 Shipments Product sustaining 1 10 1 Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system? DELL F3 prt sc home end F4 F5 F6
Evaluating Selected Cost Driver Assume that a manufacturer of specialized machine parts developed the following total cost estimating equation for manufacturing costs. Y = $14,400 + $1,250 (actual units) a. What is total estimated manufacturing costs if 180 units are produced? $Answer 0
Problem 2 Milky Corporation has provided the following data from its activity-based costing accounting system: Activity Cost Pools Designing products Setting up batches Assembling products Total Cost P1,372,448 P33,300 P126,160 Total Activity 7,798 product design hours 740 batch set-ups 6,640 assembly hours The activity rate for the "designing products" activity cost pool is answer must be in nearest peso A The activity rate for the "setting up batches" activity cost pool is answer should be in nearest peso A The activity rate for the "assembling products" activity cost pool is answer must be in nearest peso A
Question 1 XYZ Ltd. currently make and sells four products. They provide you with their details and relevant information for one period in the following table. As you have recently just learnt about activity-based costing (ABC) you decide to experiment by applying the principles of ABC to the four products. Product Outputs in Units Cost per unit Direct material Direct labour Machine hours (per unit) 4 A B C D 120 100 80 120 (£) (£) (£) (£) 40 50 30 60 28 21 14 21 3 2 3 The four products are similar and are usually produced in production runs of 20 units and sold in batches of 10 units. The production overhead is currently absorbed by using a machine hour rate, and the total of the production overhead for the period has been analysed as follows: Machine department costs (rent, business rates, depreciation and supervision) Set-up costs Stores receiving Inspection/Quality control Material handling and dispatch £10,430 £5,250 £3,600 £2,100 £4,620 Question continues on next page You have…
Question No.5 Ivory Corporation manufactures two products (A and B). The overhead costs have been divided into four cost pools that use the following activity drivers: Product Number of Orders Number of Set-ups Number of Labor Transactions Labor Hours A B Cost per pool 20 5 Rs.15,000 35 70 Rs.8,400 1,000 1,500 Rs.120,000 75 125 Rs.40,000 Required: Compute the allocation rates for each of the activity drivers listed. Allocate the overhead cost to Product A and B using activity-based-costing. Compute the overhead rate using machine hours under the functional based costing system. Allocate the overhead cost to Product A and B using the functional-based costing system overhead rate calculated in part C.
Question No.6 Hunter Company manufactures two products (XX and YY). The overhead costs have been divided into four cost pools that use the following activity drivers. Product Number of Orders Number of Set-ups Number of Labor Transactions Labor Hours XX YY Cost per pool 60 20 Rs.16,000 20 80 Rs.13,000 50 70 Rs.2,400 2,000 500 Rs.20,000 Required: Compute the allocation rates for each of the activity drivers listed. Allocate the overhead costs to product XX and product YY using activity-based costing. Compute the overhead rate using machine hours under the functional-based costing system. Allocate the overhead cost to Product XX and YY using the functional-based costing system overhead rate calculated in part C.
Question No. 4: Production under Constrained Resources Glover Company makes three products in a single facility. These products have the following unit product costs:ProductABCDirect materials$35.10$51.60$58.00Direct labor22.5025.1015.90Variable manufacturing overhead2.301.701.60Fixed manufacturing overhead12.207.808.40Unit product cost$72.10$86.20$83.90Additional data concerning these products are listed below.ProductABCMixing minutes per unit1.300.800.20Selling price per unit$81.00$103.40$96.90Variable selling cost per unit$2.90$3.40$3.20Monthly demand in units310044002400The mixing machines are potentially the constraint in the production facility. A total of 7930 minutes are available per month on these machines. Direct labor is a variable cost in this company.Required : a. How many minutes of mixing machine time be required to satisfy demand for all three products?b. How much of each product should be produced to maximize net operating income?ABCOptimal productionc. Up to how much…
Answer the question Question 3 Company A uses a traditional system in costing its products. Using this system, the company allocates all indirect production costs to products in proportion to their direct labour costs. However, recently the company has been contemplating in switching to an Activity-Based Costing (ABC) system. www Three products are produced: X, Y and Z. Direct costs, indirect costs and cost-driver activity for each product for a recent month are as follows: Y Z Direct-materials cost RM20,000 RM 4.000 50,000 RM45,000 RM120,000 RM 1,000 RM 3,000 150,000 Direct-labour cost Vo ww Kilowatt hours 200,000 Number of inspections 13 5 Cost Driver Activity Materials handling Quality inspection Electricity energy Total indirect production costs Indirect production cost RM10,000 RM20,000 RM20,000 RM50,000 Direct-materials cost Number of inspections Kilowatt hours Required: (a) Compute the total indirect production cost allocated to X, Y and Z using the current traditional costing…
PROBLEM 1 FIGHTING Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor hours (DLHs). The company has two products, H16Z and P25P, about which it has provided the following data: H16Z P25P Direct materials per unit P10.20 P50.50 Direct labor per unit P8.40 P25.20 Direct labor-hours per unit 0.40 1.20 Annual production 30,000 10,000 The company’s estimated total manufacturing overhead for the year is P1,464,480 and the company’s estimated total direct labor-hours for the year is 24,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below: Activities and Activity Measures Estimated Overhead Cost Supporting direct labor (DLHs) P 552,000 Setting…
Chhom Incorporated, manufactures and cells two products Product F and Product U4 Data concerning the expected production of each product and the expected total direct labor hours (DLH required to produce that output appear below Product F9 Product 04 Total direct labor-hoursi Expected Direct Labor-Hours Total Direct Production 300 600 Activity Cost Pools Labor-related Production orders order size Per Unit 4.0 2.0 The direct labor rate is $25.90 per DLH The direct materials cost per unit is $285 for Product F9 and $244 for Product 4 The company is considering adopting an activity based costing system with the following activity cost pools, activity measures, and expected activity Activity Measures DLHS orders MHS Estimated Overhead Cost Product $ 42,600 67,630 137,820 $ 248,050 Labor-Hours 1,200 1,200 2,400 1,200 400 3,300 Expected Activity Product U 1,200 GOO 3,100 Total 2,400 1,000 4,400