Alfred, owner of Hi-Tech Fiberglass Fabricators, Inc., is interested in using the reciprocal allocation method. The following data from operations were collected fo Budgeted manufacturing overhead costs: Plant Maintenance Data Processing Machining Capping PM (Support Dept) DP (Support Dept) M (Operating Dept) C (Operating Dept) $320,000 $60,000 $200,000 $135,000 Services furnished: By Plant Maintenance (budgeted labor-hours): to Data Processing to Machining to Capping By Data Processing (budgeted computer time): to Plant Maintenance to Machining to Capping Which of the following linear equations represents the complete reciprocated cost of the Data Processing Department? O A. DP= $60,000 x (900/6,050) + $320,000x (3,600 / 18,000) B. DP= $320,000 + (900/18,000) DP OC. DP= $60,000+ (3,600/ 18,000) PM 3,600 6,000 8,400 900 4,200 950

Alfred, owner of Hi-Tech Fiberglass Fabricators, Inc., is interested in using the reciprocal allocation method. The following data from operations were collected fo Budgeted manufacturing overhead costs: Plant Maintenance Data Processing Machining Capping PM (Support Dept) DP (Support Dept) M (Operating Dept) C (Operating Dept) $320,000 $60,000 $200,000 $135,000 Services furnished: By Plant Maintenance (budgeted labor-hours): to Data Processing to Machining to Capping By Data Processing (budgeted computer time): to Plant Maintenance to Machining to Capping Which of the following linear equations represents the complete reciprocated cost of the Data Processing Department? O A. DP= $60,000 x (900/6,050) + $320,000x (3,600 / 18,000) B. DP= $320,000 + (900/18,000) DP OC. DP= $60,000+ (3,600/ 18,000) PM 3,600 6,000 8,400 900 4,200 950

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 11E: Lonsdale Inc. manufactures entry and dining room lighting fixtures. Five activities are used in...

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Young Company is beginning operations and is considering three alternatives to allocate manufacturing overhead to individual units produced. Young can use a plantwide rate, departmental rates, or activity-based costing. Young will produce many types of products in its single plant, and not all products will be processed through all departments. In which one of the following independent situations would reported net income for the first year be the same regardless of which overhead allocation method had been selected? a. All production costs approach those costs that were budgeted. b. The sales mix does not vary from the mix that was budgeted. c. All manufacturing overhead is a fixed cost. d. All ending inventory balances are zero.
The management of Nova Industries Inc. manufactures gasoline and diesel engines through two production departments, Fabrication and Assembly. Management needs accurate product cost information in order to guide product strategy. Presently, the company uses a single plantwide factory overhead rate for allocating factory overhead to the two products. However, management is considering the multiple production department factory overhead rate method. The following factory overhead was budgeted for Nova: Direct labor hours were estimated as follows: In addition, the direct labor hours (dlh) used to produce a unit of each product in each department were determined from engineering records, as follows: a. Determine the per-unit factory overhead allocated to the gasoline and diesel engines under the single plantwide factory overhead rate method, using direct labor hours as the activity base. b. Determine the per-unit factory overhead allocated to the gasoline and diesel engines under the multiple production department factory overhead rate method, using direct labor hours as the activity base for each department. c. Recommend to management a product costing approach, based on your analyses in (a) and (b). Support your recommendation.
Firenza Company manufactures specialty tools to customer order. Budgeted overhead for the coming year is: Previously, Sanjay Bhatt, Firenza Companys controller, had applied overhead on the basis of machine hours. Expected machine hours for the coming year are 50,000. Sanjay has been reading about activity-based costing, and he wonders whether or not it might offer some advantages to his company. He decided that appropriate drivers for overhead activities are purchase orders for purchasing, number of setups for setup cost, engineering hours for engineering cost, and machine hours for other. Budgeted amounts for these drivers are 5,000 purchase orders, 500 setups, and 2,500 engineering hours. Sanjay has been asked to prepare bids for two jobs with the following information: The typical bid price includes a 40 percent markup over full manufacturing cost. Required: 1. Calculate a plantwide rate for Firenza Company based on machine hours. What is the bid price of each job using this rate? 2. Calculate activity rates for the four overhead activities. What is the bid price of each job using these rates? 3. Which bids are more accurate? Why?
Management Accounting Company B is interested in using the reciprocal allocation method. The following data from operations were collected for analysis: Budgeted manufacturing overhead costs: Plant Maintenance PM (Support Dept) $350,000 Data Processing DP (Support Dept) $75,000 Machining M (Operating Dept) $225,000 Capping C (Operating Dept) $125,000 Services furnished: By Plant Maintenance (budgeted labour-hours): to Data Processing 3,500 to Machining 5,000 to Capping 8,200 By Data Processing (budgeted computer time): to Plant Maintenance 600 to Machining 3,500 to Capping 600 Required : a. What is the complete reciprocated cost of the Plant Maintenance Department? b. What is the complete reciprocated cost of the Data Processing Department? c. "The direct allocation method incorporates mutual services provided among all support departments."…
Alfred, owner of Hi-Tech Fiberglass Fabricators, Inc., is interested in using the reciprocal allocation method. The following data from operations were collected for analysis: Budgeted manufacturing overhead costs: Plant Maintenance Data Processing Machining Capping PM (Support Dept) DP (Support Dept) M (Operating Dept) C (Operating Dept) Services furnished: By Plant Maintenance (budgeted labor - hours): to Data Processing to Machining to Capping By Data Processing (budgeted computer time): to Plant Maintenance to Machining to Capping What is the complete reciprocated cost of the Plant Maintenance OA. $420,000 B. $344,026 OC. $349,666 OD. $353,590 $320,000 $100,000 $245,000 $145,000 3,400 5,800 8,000 800 4,050 750 (Do not round any intermediary calculations.)
INWON PETERNULFINN Alfred owner of Hi-Tech Fiberglass Fabricators, Inc., is interested in using the reciprocal allocation method. The following data from operations were collected for analysis: ← Budgeted manufacturing overhead costs: Plant Maintenance Data Processing Machining Capping PM (Support Dept) DP (Support Dept) M (Operating Dept) C (Operating Dept) Services furnished. By Plant Maintenance (budgeted labor-hours); to Data Processing to Machining to Capping By Data Processing (budgeted computer time): to Plant Maintenance to Machining to Capping What is the complete reciprocated cost of the Data Processing Department? (Do not round any intermediary calculations.) OA. $117,316 OB. $60,415 OC. $260,000 OD. $86.227 GIED $310.000 $50,000 $245.000 $130,000 3,500 5,300 8.000 600 4,100 650
Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below. Procurement Scheduling Materials handling Product development Production Disk drives Tape drives Wire drives Activity Cost $378,400 221,900 402,900 770,700 Number of engineering changes 1,402,800 Machine hours Number of Purchase Orders Activity Base Number of purchase orders Number of production orders Number of moves 4,160 2,100 11,100 Production Orders Number of Number of Moves 250 175 1,200 540 860 4,300 The activity rate for the materials handling cost pool is Oa. $63.76 per move Ob. $21.8 per move Oc. $172.68 per move Od. $66.71 per move Number of Engineering Machine Changes Hours 15 2,500 5 9,200 10,300 27 Number of Units 1,600 4,300 2,000
Monochrome Fabric, Inc., is interested in using the reciprocal allocation method. The following data from operations were collected for analysis: O Budgeted manufacturing overhead costs: Maintenance 1 Hour 35 M M (Support Dept) Personnel $330,000 Weaving P (Support Dept) W (Weaving Dept) Colorizing C(Colorizing Dept) Services furnished: By Maintenance (budgeted labor-hours to Personnel to Weaving to Colorizing By Personnel (Number of employees servicedy Plant Maintenance 25 Weaving Colorizing Which of the following linear equations represents the complete reciprocated cost of the Personnel Department OP=$330,000-$200,000 (1,100/13,700) M OP=(1,100/13,700) M OP=$200,000 OP=$200,000+(1,100/13,700) M $200,000 5660,000 $440,000 1,100 7,600 5,000 39
Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below. Procurement Scheduling Materials handling Product development Production Disk drives Tape drives Wire drives Activity Cost $390,900 200,200 479,700 Number of moves Activity Base Number of purchase orders Number of production orders Number of Purchase Orders 4,160 2,100 12,900 770,600 Number of engineering changes 1,491,500 Machine hours Number of Number Production of Orders Moves 1,400 520 250 155 820 4,500 The activity rate for the procurement activity cost pool is Oa. $20.40 per purchase order Ob. $65.70 per purchase order Oc. $319.10 per purchase order Od. $163.43 per purchase order Number of Engineering Changes 14 4 23 Machine Hours 1,700 9,800 11,200 Number of Units 1,800 4,400 2,300
Joanne, owner of Automated Fabric Inc., is interested in using the reciprocal method for allocating service department costs. The following data from operations have been collected for analysis.Budgeted manufacturing overhead costs:Maintenance (Support Dept) $150,000Personnel (Support Dept) $ 80,000Weaving (Operating Dept) $325,000Colourising (Operating Dept) $175,000Services provided:By Maintenance (budgeted labour-hours):to Personnel 500to Weaving 3,500to Colorizing 2,000By Personnel (Number of employees):Plant Maintenance 5Weaving 15Colorizing 10Required:Using the reciprocal method calculate:a) the total cost in the Maintenance departmentb) the total cost in the Personnel department Please dont give solutions image format thank you
Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below. Procurement Scheduling Materials handling Product development Production Activity Cost Activity Base $362,500 Number of purchase orders 244,700 Number of production orders 486,700 Number of moves 766,200 Number of engineering changes 1,535,800 Machine hours Disk drives Tape drives Wire drives Number of Number of Number Number of of Moves Purchase Orders Production Orders 4,090 270 2,400 225 11,900 760 The activity-based cost for each disk drive unit is Oa. $665.88 Ob. $300.73 Oc. $208.11 Od. $19.71 1,240 780 3,500 Engineering Changes 15 6 25 Machine Hours 2,500 10,000 10,200 Number of Units 2,200 4,500 2,700
Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to five separate activity pools. The budgeted activity cost and activity base data by product are as follows: Procurement Scheduling Materials handling Product development Production Disk drives Tape drives Wire drives Activity Cost $379,200 245,800 402,900 728,700 1,528,900 Number of Purchase Orders 3,890 1,700 13,000 Activity Base Number of purchase orders Number of production orders Number of moves Number of engineering changes Machine hours c. $148.42 per machine hour O d. $20.4 per machine hour Number of Number Number of of Moves Production Orders 280 155 870 1,330 500 3,600 Engineering Changes 13 3 20 Machine Hours 1,500 8,400 10,700 The activity rate (rounded to the nearest cent) for the production cost pool is O a. $74.2 per machine hour O b. $74.22 per machine hour O Number of Units 2,100 3,900 3,000