Sh52 Exercise 5-10A (Algo) Computing product cost with given activity allocation rates LO 5-3Finch Manufacturing produces two keyboards, one for laptop computers and the other for desktop computers. The production processis automated, and the company has found activity-based costing useful in assigning overhead costs to its products. The company hasidentified five major activities involved in producing the keyboards.ActivityMaterials receiving & handlingProduction setupAssemblyQuality inspectionPacking and shippingActivity measures for the two kinds of keyboards follow:LaptopsDesktopsLabor Cost$1,3201,210Allocation BaseCost of materialNumber of setupsNumber of partsInspection timeNumber of ordersLaptop keyboardsDesktop keyboardsMaterial Number of Number ofCont$5,8007,300Cost Per UnitSetupa33Parts4427Allocation Rate18 of material cont$102.00 per setup$ 3.00 per part$ 1.90 per minute$ 11.00 per orderInspection Time7,400 minutes4,600 minutesNumber ofOrdereRequireda. Compute the cost per unit of laptop and desktop keyboards, assuming that Finch made 200 units of each type of keyboard.Note: Round your answers to 2 decimal places.6917

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Description: Sh52 Exercise 5-10A (Algo) Computing product cost with given activity allocation rates LO 5-3Finch Manufacturing produces two keyboards, one for laptop computers and the other for desktop computers. The production processis automated, and the company

1. Calculation of cost per unit of laptop keyboards. a) Material receiving & handling =…

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Finch Manufacturing produces two keyboards, one for laptop computers and the other for desktop computers. The production pre is automated, and the company has found activity-based costing useful in assigning overhead costs to its products. The company identified five major activities involved in producing the keyboards. Activity Materials receiving & handling Production setup Assembly Quality inspection Packing and shipping Activity measures for the two kinds of keyboards follow: Laptops beaktope Allocation Bas Cost of material Number of setups Number of parta Inspection time Number of orders Labor Cost $1,320 1,210 Material Number of Number of Coat $5,800 7,300 Betupa 33 14 Allocation Rate 1 of material cont $102.00 per setup $ 3.00 per part $ 1.90 per minute $ 11.00 per order Parts Inspection Time 44 27 7,400 minutes 4,600 minutes Number of Orders 69 17 Required a. Compute the cost per unit of laptop and desktop keyboards, assuming that Finch made 200 units of each type of keyboard. Note: Round your answers to 2 decimal places.

Finch Manufacturing produces two keyboards, one for laptop computers and the other for desktop computers. The production pre is automated, and the company has found activity-based costing useful in assigning overhead costs to its products. The company identified five major activities involved in producing the keyboards. Activity Materials receiving & handling Production setup Assembly Quality inspection Packing and shipping Activity measures for the two kinds of keyboards follow: Laptops beaktope Allocation Bas Cost of material Number of setups Number of parta Inspection time Number of orders Labor Cost $1,320 1,210 Material Number of Number of Coat $5,800 7,300 Betupa 33 14 Allocation Rate 1 of material cont $102.00 per setup $ 3.00 per part $ 1.90 per minute $ 11.00 per order Parts Inspection Time 44 27 7,400 minutes 4,600 minutes Number of Orders 69 17 Required a. Compute the cost per unit of laptop and desktop keyboards, assuming that Finch made 200 units of each type of keyboard. Note: Round your answers to 2 decimal places.

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

Chapter5: Activity-based Costing And Management

Section: Chapter Questions

Problem 4MCQ: Use the following information for Multiple-Choice Questions 5-3 and 5-4: Consider the information...

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Exercise 5-10A (Algo) Computing product cost with given activity allocation rates LO 5-3 Walton Manufacturing produces two keyboards, one for laptop computers and the other for desktop computers. The production process is automated, and the company has found activity-based costing useful in assigning overhead costs to its products. The company has identified five major activities involved in producing the keyboards. Activity Materials receiving & handling Production setup. Assembly Quality inspection Packing and shipping Activity measures for the two kinds of keyboards follow: Laptops Desktops Required Labor Cost $ 1,260 1,150 Laptop keyboards Desktop keyboards Material Cost $5,800 7,700 Allocation Base Cost of material Number of setups Number of parts Inspection time Number of orders. Cost Per Unit Number of Number of Parta 50 22 Setups 26 15 Allocation Rate 28 of material cost. $111.00 per setup $ 3.00 per part $ 2.10 per minute $11.00 per order Inspection Time 6,800 minutes 5,500…
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
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
Computing and using activity-based costing overhead allocation rates Koehler (see Exercise E19-15 and Exercise E19-16) makes handheld calculators in two models—basic and professional—and wants to further refine its costing system by allocating overhead using activity-based costing. The estimated $721,000 of manufacturing overhead has been divided into three primary activities: Materials Handling, Machine Setup, and Insertion of Parts. The following data have been compiled: Requirement 1 Koehler expects to produce 200,000 basic models and 200,000 professional models. Compute the predetermined overhead allocation rates using activity-based costing. How much overhead is allocated to the basic model? To the professional model? Requirement 2 Compare your answers for Exercise E19-15, Exercise E19-16, and Exercise E19-17. What conclusions can you draw? Note: Short Exercise S19-15 and ES19-16 must be completed before attempting Short Exercise 519-17.
Computing product costs in an ABC system The Alexander Manufacturing Company in Rochester, Minnesota, assembles and tests electronic components used in smartphones. Consider the following data regarding component T24 (amounts are per unit): Requirements Complete the missing items for the two tables. Why might managers favor this ABC system instead of Alexander-’s older system, which allocated all manufacturing overhead costs on the basis of direct labor hours?
Traditional versus Activity-Based Cost Management SystemsObjective 5 - Explain the differences between traditional and contemporarycost management systems.Jazon Manufacturing produces two different models of cameras. One modelhas an automatic focus, whereas the other requires the user to determine thefocus. The two products are produced in batches. Each time a batch isproduced, the equipment must be configured (set up) for the specifications ofthe camera model being produced, The manual-focus camera requires moreparts than the automatic-focus model. The manual-focus model is also morelabor intensive, requiring much more assembly time but less machine time.Although the manual model is more labor intensive, the machine configurationrequired for this product is more complex, causing the manual model toconsume more of the setup activity resources than the automatic camera.Many, but not all, of the parts for the two cameras are purchased from externalsuppliers. Because it has more parts,…
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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
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?
(Appendix 3A) Scattergraph, High-Low Method, Method of Least Squares, Use of Judgment The management of Wheeler Company has decided to develop cost formulas for its major overhead activities. Wheeler uses a highly automated manufacturing process, and power costs are a significant manufacturing cost. Cost analysts have decided that power costs are mixed. The costs must be broken into their fixed and variable elements so that the cost behavior of the power usage activity can be properly described. Machine hours have been selected as the activity driver for power costs. The following data for the past 8 quarters have been collected: Note: For the following requirements, round the fixed cost to the nearest dollar, round the variable rates to three decimal places, and the R2 to two decimal places. Required: 1. Prepare a scattergraph by plotting power costs against machine hours. Does the scatter-graph show a linear relationship between machine hours and power cost? 2. Using the high and low points (i.e., the high-low method), compute a power cost formula. (Note: Round answers to three decimal places.) 3. Use the method of least squares to compute a power cost formula. Evaluate the coefficient of determination. 4. CONCEPTUAL CONNECTION Rerun the regression, and drop the point (20,000, 26,000) as an outlier. Compare the results from this regression to those for the regression in Requirement 3. Which is better?
Support activity cost allocation Kizzles Crepes Co. produces world famous crepes. The companys crepes are produced via its Mixing and Cooking activities, which both rely on the Janitorial and Maintenance activities. Kizzles management knows the most practical driver of Janitorial costs is square feet, but is uncertain whether to allocate Maintenance costs based on asset value of production equipment, number of service calls, or machine hours. Kizz1es management estimates that the Cooking and Mixing activities each require about twice as much space as the Maintenance activity. Instructions 1. What factors should Kizzles management consider in choosing the driver to use for the allocation of Maintenance costs? Of the three potential drivers mentioned in the problem, which one(s) should Kizz1es most likely not use? 2. Assume that Kizzles management allocates Maintenance costs based on the number of service calls. Further assume that in a given period, the Janitorial, Mixing, and Cooking activities incur 16, 40, and 24 service calls, respectively, and that the Janitorial and Maintenance costs of that period are 3,000 and 4,200, respectively. Determine the total costs allocated from each support activity to the other three activities using the reciprocal services method. 3. Kizz1es Crepes Co. is expanding rapidly due to its exponentially growing sales and popularity. Kizzles management is worried that as the company expands, its current method of support activity cost allocation, the reciprocal services method, may become too burdensome. Is this true? If so, what alternative method should Kizzles Crepes Co. use as it expands?