Gold Shoes Company manufactures cleats for baseball shoes. It has outlined the following overhead cost drivers:Overhead Cost PoolQuality ControlMachine TimeMaterials HandlingMiscellaneous Overhead CostNumber of InspectionsNumber of Machine hoursNumber of BatchesDirect Labor HoursGold Shoes Company has an order for cleats that has the following production requirements:Multiple Choice$28,950.Using activity-based costing, applied quality control factory overhead for the baseball cleat order is:$30,720.$33,750.Cost DriverNumber of inspectionsMachine hoursNumber of BatchesDirect labor hours$21,650.$20,100.Overhead Cost BudgetedLevel for Cost Driver$ 60,000173,42045027081,0803,75068,000Budgeted800667756,600

Name: Gold Shoes Company manufactures cleats for baseball shoes. It has out
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Description: Gold Shoes Company manufactures cleats for baseball shoes. It has outlined the following overhead cost drivers:Overhead Cost PoolQuality ControlMachine TimeMaterials HandlingMiscellaneous Overhead CostNumber of InspectionsNumber of Machine hoursNumb

Activity based costing method is a costing method in which the overheads are allocated to each…

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Gold Shoes Company manufactures cleats for baseball shoes. It has outlined the following overhead cost drivers: Overhead Cost Pool Quality Control Machine Time Materials Handling Miscellaneous Overhead Cost Number of Batches Direct Labor Hours Gold Shoes Company has an order for cleats that has the following production requirements: Number of Inspections Number of Machine hours Multiple Choice $28,950. Using activity-based costing, applied quality control factory overhead for the baseball cleat order is: $30,720. $33,750. Cost Driver Number of inspections Machine hours Number of Batches Direct labor hours $21,650. $20,100. Overhead Cost Budgeted Level for Cost Driver $ 60,000 173,420 450 270 8 1,080 3,750 68,000 Budgeted 800 667 75 6,600

Gold Shoes Company manufactures cleats for baseball shoes. It has outlined the following overhead cost drivers: Overhead Cost Pool Quality Control Machine Time Materials Handling Miscellaneous Overhead Cost Number of Batches Direct Labor Hours Gold Shoes Company has an order for cleats that has the following production requirements: Number of Inspections Number of Machine hours Multiple Choice $28,950. Using activity-based costing, applied quality control factory overhead for the baseball cleat order is: $30,720. $33,750. Cost Driver Number of inspections Machine hours Number of Batches Direct labor hours $21,650. $20,100. Overhead Cost Budgeted Level for Cost Driver $ 60,000 173,420 450 270 8 1,080 3,750 68,000 Budgeted 800 667 75 6,600

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 5E: Handy Leather, Inc., produces three sizes of sports gloves: small, medium, and large. A glove...

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San Mateo Optics, Inc., specializes in manufacturing lenses for large telescopes and cameras used in space exploration. As the specifications for the lenses are determined by the customer and vary considerably, the company uses a job-order costing system. Manufacturing overhead is applied to jobs on the basis of direct labor hours, utilizing the absorption- or full-costing method. San Mateos predetermined overhead rates for 20x1 and 20x2 were based on the following estimates. Jim Cimino, San Mateos controller, would like to use variable (direct) costing for internal reporting purposes as he believes statements prepared using variable costing are more appropriate for making product decisions. In order to explain the benefits of variable costing to the other members of San Mateos management team, Cimino plans to convert the companys income statement from absorption costing to variable costing. He has gathered the following information for this purpose, along with a copy of San Mateos 20x1 and 20x2 comparative income statement. San Mateo Optics, Inc. Comparative Income Statement For the Years 20x1 and 20x2 San Mateos actual manufacturing data for the two years are as follows: The companys actual inventory balances were as follows: For both years, all administrative expenses were fixed, while a portion of the selling expenses resulting from an 8 percent commission on net sales was variable. San Mateo reports any over-or underapplied overhead as an adjustment to the cost of goods sold. Required: 1. For the year ended December 31, 20x2, prepare the revised income statement for San Mateo Optics, Inc., utilizing the variable-costing method. Be sure to include the contribution margin on the revised income statement. 2. Describe two advantages of using variable costing rather than absorption costing. (CMA adapted)
Handy Leather, Inc., produces three sizes of sports gloves: small, medium, and large. A glove pattern is first stencilled onto leather in the Pattern Department. The stenciled patterns are then sent to the Cut and Sew Department, where the glove is cut and sewed together. Handy Leather uses the multiple production department factory overhead rate method of allocating factory overhead costs. Its factory overhead costs were budgeted as follows: The direct labor estimated for each production department was as follows: Direct labor hours are used to allocate the production department overhead to the products. The direct labor hours per unit for each product for each production department were obtained from the engineering records as follows: a. Determine the two production department factory overhead rates. b. Use the two production department factory overhead rates to determine the factory overhead per unit for each product.
Electan Company produces two types of printers. The company uses ABC, and all activity drivers are duration drivers. Electan Company is considering using DBC and has gathered the following data to help with its decision. A. Activities with duration drivers: B. Activities with consumption ratios and costs: C. Products with cycle time and practical capacity: Required: 1. Using cycle time and practical capacity for each product, calculate the total time for all primary activities. Comment on the relationship to ABC. 2. Calculate the overhead rate that DBC uses to assign costs. Comment on the relationship to a unit-based plantwide overhead rate. 3. Use the overhead rate calculated in Requirement 2 to calculate (a) the overhead cost per unit for each product, and (b) the total overhead assigned to each product. How does this compare to the ABC assignments shown in Part B of the Information set? 4. What if the units actually produced were 10,000 for Printer A and 18,000 for Printer B. Using DBC, calculate the cost of unused capacity.
Medical Tape makes two products: Generic and Label. It estimates it will produce 423,694 units of Generic and 652,200 of Label, and the overhead for each of its cost pools is as follows: It has also estimated the activities for each cost driver as follows: How much is the overhead allocated to each unit of Generic and Label?
Akhbar LLC uses ABC costing for its products “Deluxe’ and ‘Premium”. The total estimated factory overhead is divided into two activities. i) Purchase related overhead cost RO 10,000 ii) Quality inspection overhead cost RO 5000 The expected activities are 100 for purchase and 500 for quality inspection. Deluxe requires 60 purchase orders and 300 quality checks and Premium requires 40 purchase orders and 200 quality checks. Based on the information given, answer the following questions. The amount of overheads allocated to product Deluxe and Premium for quality inspection will be: a. RO 1000 and RO 3000 b. RO 3000 and RO 2000 c. RO 2000 and RO 3000 d. RO 1000 and RO 2000 Clear my choice Question 7 The amount of overheads allocated to the product Deluxe and Premium for purchase cost will be: a. RO 4000 and RO 6000 b. RO 6000 and RO 4000 c. RO 3000 and RO 5000 d. RO 5000 and RO 3000
Akhbar LLC uses ABC costing for its products “Deluxe’ and ‘Premium”. The total estimated factory overhead is divided into two activities. i) Purchase related overhead cost RO 10,000ii) Quality inspection overhead cost RO 5000The expected activities are 100 for purchase and 500 for quality inspection. Deluxe requires 60 purchase orders and 300 quality checks and Premium requires 40 purchase orders and 200 quality checks. Based on the information given, answer the following question The amount of overheads allocated to the product Deluxe and Premium for purchase cost will be?
Forner, Inc., manufactures and sells two products: Product Z1 and Product Z8. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity Estimated Expected Activity Activity Overhead Activity Cost Pools Labor-related Measures Cost Product Z1 Product Z8 Total DLHS $112,190 40,440 609,770 600 2,000 Machine setups Оrder size 2,600 1,200 6, 200 setups 500 700 MHs 3,000 3,200 $762,400 The activity rate for the Machine Setups activity cost pool under activity-based costing is closest to: Multiple Cholce $203.26 per setup $190.55 per setup $122.97 per setup 92 F AQI 61 nere to search DELL
Doles Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products. Activity Cost Pools Setting up batches Processing customer orders Assembling products Activity Rate Number of batches Number of customer orders Number of assembly hours Required: $66.52 per batch $23.58 per customer order $10.71 per assembly hour Data concerning two products appear below: Product K52W Product X94T 65 45 418 How much overhead cost would be assigned to each of the two products using the company's activity-based costing system? Product K52W Total overhead cost: ? 52 30 161 Product X94T ?
Doles Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products. Activity Cost Pools Setting up batches Processing customer orders Assembling products Data concerning two products appear below: Number of batches Number of customer orders Number of assembly hours Total overhead cost Activity Rate $69.22 per batch $26.28 per customer order $ 12.11 per assembly hour Product K52W 65 45 418 Required: How much overhead cost would be assigned to each of the two products using the company's activity-based costing system? (Round your intermediate calculations and final answers to 2 decimal places.) Product K52W Product X94T Product X94T 52 30 161
North Street Corporation manufactures two models of motorized go-carts, a standard and a deluxe model. The following activity and cost information has been compiled: Number of Number of Number of Product Setups Components Direct Labor Hours Standard 20 5 720 Deluxe 29 17 460 Overhead costs $17,150 $19,800 Number of setups and number of components are identified as activity-cost drivers for overhead. Assuming an activity-based costing system is used, what is the total amount of overhead cost assigned to the standard model? (Do not round interim calculations. Round the final answer to the nearest whole dollar.) A) $18,475 B) $11,500 C) $19,750 D)…
North Street Corporation manufactures two models of motorized go - carts, a standard and a deluxe model. The following activity and cost information has been compiled: Number of Number of Number of Product Setups Components Direct Labor Hours Standard 16 7 730 Deluxe 34 19 490 Overhead costs $16,000 $24,960 Number of setups and number of components are identified as activity - cost drivers for overhead. Assuming an activity - based costing system is used, what is the total amount of overhead cost assigned to the standard model? (Do not round interim calculations. Round the final answer to the nearest whole dollar.) O A. $17,600 O B. $11,840 OC. $29,120 O D. $20,480
Hails Corporation manufactures two products: Product Q21F and Product H44W. The company uses a plantwide overhead rate based on direct labor- hours. It is considering implementing an activity-based costing (ABC) system that allocates its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Q21F and H44W. Activity Cost Pool Machining Machine setups Product design Order size Machine-hours Number of setups Number of products Direct labor-hours 26.71% 50.00% 34.18% Activity Measure O 60.89% Machine-hours Number of setups Number of products Direct labor-hours Activity Measure Total Cost Total Activity $ 195,000 13,000 MHs 90,000 150 setups $ $ 64,000 $ 280,000 Product Q21F 9,000 80 1 6,000 Using the ABC system, the percentage of the total overhead cost that is assigned to Product Q21F is closest to: 2 products 10,000 DLHs Product H44W 4,000 70 1 4,000