Cost of the three alternative methods of processing work in an office is stated below: A-Manual: Total fixed cost PM=3,000 Variable cost per case=48 B-Semi-Automatic: Total fixed cost PM=9,000 Variable cost per case=28 C-Fully automatic: Total fixed cost PM=25,000 Variable cost per case=8 Identify the indifferences.

Cost of the three alternative methods of processing work in an office is stated below: A-Manual: Total fixed cost PM=3,000 Variable cost per case=48 B-Semi-Automatic: Total fixed cost PM=9,000 Variable cost per case=28 C-Fully automatic: Total fixed cost PM=25,000 Variable cost per case=8 Identify the indifferences.

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Description: Cost of the three alternative methods of processing work in an office is stated below:A-Manual: Total fixed cost PM=3,000Variable cost per case=48B-Semi-Automatic:Total fixed cost PM=9,000Variable cost per case=28C-Fully automatic: Total fixed cost P

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 10PA: Carltons Kitchens three cost pools and overhead estimates are as follows: Compare the overhead...

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Cost of the two alternative methods of processing work in an office is stated below: A-Manual: Total fixed cost PM=3,000 Variable cost per case=48 B-Semi-Automatic: Total fixed cost PM=9,000 Variable cost per case=28 Identify the indifference.
Silven Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $138,000 Number of setups 120 Ordering materials 21,600 Number of orders 1,200 Machining 107,100 Machine hours 11,900 Receiving 16,740 Receiving hours 930 Silven produces two models of cell phones with the following expected activity demands: Model X 4,600 80 400 Units completed Number of setups Number of orders Machine hours Receiving hours Required: 6,800 310 Model X Model Y Model Y 9,200 40 800 5,100 620 1. Determine the total overhead assigned to each product using the four activity drivers. Total Overhead Assigned
Cost of the three alternative methods are stated below: A-Manual: Total fixed cost PM=3,000Variable cost per unit=48 B-Semi-Automatic:Total fixed cost PM=9,000Variable cost per unit=28 C-Fully automatic:Total fixed cost PM=25,000Variable cost per unit=8 Identify the cost indifference point.
5. Match the following cost pools and activities with the most appropriate cost driver. Group of answer choices a. number of parts b. square feet c. direct labor hours d. number of tests required e. machine hours f. machine setups g. number of orders received 1. setup cost pool? 2. assembly cost pool? 3. supervising cost pool? 4. testing cost pool? 5. ordering cost pool? 6. fringe…
The cost behavior patterns below are lettered A through H. The vertical axes of the graphs represent total dollars of expense, and the horizontal axes represent production in units, machine hours, or direct labor hours. In each case, the zero point is at the intersection of the two axes. Each graph may be used no more than once. Required: Select the graph that matches the lettered cost described here. a. Depreciation of equipmentthe amount of depreciation charged is computed based on the number of machine hours that the equipment was operated. b. Electricity billflat fixed charge, plus a variable cost after a certain number of kilowatt hours are used. c. City water billcomputed as follows: d. Depreciation of equipmentthe amount is computed by the straight-line method. e. Rent on a factory building donated by the citythe agreement calls for a fixed fee payment, unless 200,000 labor hours are worked, in which case no rent need be paid. f. Salaries of repair workersone repair worker is needed for every 1,000 machine hours or less (i.e., 0 to 1,000 hours requires one repair worker, 1,001 to 2,000 hours requires two repair workers, etc.).
Carltons Kitchens three cost pools and overhead estimates are as follows: Compare the overhead allocation using: A. The traditional allocation method B. The activity-based costing method (Hint: the traditional method uses machine hours as the allocation base.)
Refer to the data given in Problem 4.36 and suppose that the expected activity costs are reported as follows (all other data remain the same): The per unit overhead cost using the 14 activity-based drivers is 1,108 and 779 for Cylinder A and Cylinder B, respectively. Required: 1. Determine the percentage of total costs represented by the three most expensive activities. 2. Allocate the costs of all other activities to the three activities identified in Requirement 1. Allocate the other activity costs to the three activities in proportion to their individual activity costs. Now assign these total costs to the products using the drivers of the three chosen activities. 3. Using the costs assigned in Requirement 2, calculate the percentage error using the ABC costs as a benchmark. Comment on the value and advantages of this ABC simplification.
Characteristics of Production Process, Cost Measurement Vince Melders, of EcoScape Company, designs and installs custom lawn and garden irrigation systems for homes and businesses throughout the state. Each job is different, requiring different materials and labor for installing the systems. EcoScape estimated the following for the year: Number of direct labor hours 6,720 Direct labor cost $67,200 Overhead cost $50,400 During the year, the following actual amounts were experienced: Number of direct labor hours 6,045 Direct labor incurred $66,495 Overhead incurred $50,500 Required: 1. Should EcoScape use process costing or job-order costing? 2. If EcoScape uses a normal costing system and overhead is applied on the basis of direct labor hours, What is the overhead rate? Round your answer to the nearest cent. per direct labor hour
And this is a supplement of the question . Under an activity-based costing system, what is the per-unit overhead cost of Y? a. $272 b. $ 440 с. $164 d None of the given answers e. $282
The graphs below represent cost behavior patterns that might occur in acompany's cost structure. The vertical axis represents total cost, and thehorizontal axis represents activity output. Required:For each of the following situations, choose the graph from the group a-1 that best illustrates the cost pattern involved. Also, for each situation,identify the driver that measures activity output. 1. The cost of power when a fixed fee of $500 per month is chargedplus an additional charge of $0.12 per kilowatt-hour used2. Commissions paid to sales representatives. Commissions arepaid at the rate of 5 percent of sales made up to total annual salesof $500,000, and 7 percent of sales above $500,000.3. A part purchased from an outside supplier costs $12 per part for the first 3,000 parts and $10 per part for all parts purchased inexcess of 3,000 units.4. The cost of surgical gloves, which are purchased in incrementsof 100 units (gloves come in boxes of 100 pairs).5. The cost of tuition at a…
Exercise 9-34 and 9-35 (Algo) [The following information applies to the questions displayed below.] Benton Corporation manufactures computer microphones, which come in two models: Standard and Premium. Data for a representative quarter for the two models follow: Units produced Production runs per quarter Direct materials cost per unit Direct labor cost per unit Supervision Setup labor Incoming inspection Total overhead Standard 10,800 $ 222,750 251,775 186,300 $ 660,825 50 $ 30 50 Manufacturing overhead in the plant has three main functions: supervision, setup labor, and incoming materfal inspection. Data on manufacturing overhead for a representative quarter follow: Premium 2,700 25 $ 64 75
Following are utilities costs for different level of machine hours : $ 450 for 10 hours : $ 540 for 12 hours : for 14 hours : $ 720 for 16 hours . This cost is best described as Select one : a . None of the answers given b . Fixed c . Mixed d . Direct e . Variable