Jamesway Corporation makes two types of replacement fittings for heavy construction equipment-screws and bolts. Dat the two products follow: Screws Bolts Direct Labour- Hours per Unit Annual Production 0.20 0.10 Additional information about the company follows: 40,000 units 60,000 units a. Screws require $8.70 in direct materials per unit, and bolts require $6.70. b. The direct labour wage rate is $20 per hour. c. Screws are more complex to manufacture than bolts, and they require special equipment. d. The ABC system has the following activity cost pools: Activity Cost Pool. Machine setups Special processing General factory Activity Cost Pool Machine setups Activity Measure. Number of setups Machine-hours Direct labour-hours. Required: 1. Compute the activity rate for each activity cost pool. Activity Rate per setup Estimated Overhead Cost Screws $ 26,400 $216,000 $504,000 80 4,000 7,000 Activity Bolts 40 0 14,000 Total 120 4,000 21,000

Jamesway Corporation makes two types of replacement fittings for heavy construction equipment-screws and bolts. Dat the two products follow: Screws Bolts Direct Labour- Hours per Unit Annual Production 0.20 0.10 Additional information about the company follows: 40,000 units 60,000 units a. Screws require $8.70 in direct materials per unit, and bolts require $6.70. b. The direct labour wage rate is $20 per hour. c. Screws are more complex to manufacture than bolts, and they require special equipment. d. The ABC system has the following activity cost pools: Activity Cost Pool. Machine setups Special processing General factory Activity Cost Pool Machine setups Activity Measure. Number of setups Machine-hours Direct labour-hours. Required: 1. Compute the activity rate for each activity cost pool. Activity Rate per setup Estimated Overhead Cost Screws $ 26,400 $216,000 $504,000 80 4,000 7,000 Activity Bolts 40 0 14,000 Total 120 4,000 21,000

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 2PB: The following product costs are available for Kellee Company on the production of eyeglass frames:...

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The following product costs are available for Kellee Company on the production of eyeglass frames: direct materials, $32,125; direct labor, $23.50; manufacturing overhead, applied at 225% of direct labor cost; selling expenses, $22,225; and administrative expenses, $31,125. The direct labor hours worked for the month are 3,200 hours. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? E. If 6.425 equivalent units are produced, what is the equivalent material cost per unit? F. What is the equivalent conversion cost per unit?
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Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow: Direct Labor-Hours Annual per unit Production Rims 0.60 26,000 units Posts 0.60 84,000 units Additional information about the company follows: 1. Rims require $17 in direct materials per unit, and Posts require $14. 2. The direct labor wage rate is $20 per hour. 3. Rims are more complex to manufacture than Posts and they require special equipment. 4. The ABC system has the following activity cost pools: 5. Estimated Activity Estimated Overhead Activity Cost Pool Activity Measure Cost Rims Posts Total Machine setups Number of setups $ 39,480 80 320 400 Special processing Machine-hours $ 146,160 3,000 3,000 General factory $ 1,092,000 Direct labor-hours 5,000 73,000 78,000 Compute the activity rate for each activity cost pool. Machine Setups Special Processing General factory per setup per MH per DLH