Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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Chapter 4, Problem 3E
Scrumptious Snacks Inc. manufactures three types of snack foods: tortilla chips, potato chips, and pretzels. The company has budgeted the following costs for the upcoming period:
Factory overhead is allocated to the three products on the basis of processing hours. The Products had the following production budget and processing hours per case:
- a. Determine the single plantwide factory overhead rate.
- b. Use the overhead rate in (a) to determine the amount of total and per-case overhead allocated to each of the three products under generally accepted accounting principles.
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Scrumptious Snaks Inc. manufactures three types of snak foods:tortilla chips, potato chips, and pretzels. The company has budgeted thefollowing costs for the upcoming periods:
Factory overhead is allocated to the three products on the basis ofprocessing hours. The Products had the following production budgetand processing hours per case:
a. Determine the single plantwide factory overhead rate.b. Use the overhead rate in (a) to determine the amount of total andper-case overhead allocated to each of the three products undergenerally accepted accounting principles.
Fire King manufactures safes- mobile safes, and walk-in stationary bank safes. As part of its annual budgeting process, Custer is analyzing the profitability of its two products. Part of this analysis involves estimating the amount of overhead to be allocated to each product line. The following information relates to overhead.
(a) The total estimated manufacturing overhead was $235,000. Under traditional costing (which assigns overhead on the basis of direct-labor hours), what amount of manufacturing overhead costs are assigned to One mobile safe?
The total estimated manufacturing overhead of $235,000 was comprised of $150,000 for material-handling costs and $85,000 for purchasing activity costs.
Under activity-based costing (ABC):
(b) What amount of material handling costs are assigned to One mobile safe?
(c) What amount of purchasing activity costs are assigned to One mobile safe?
Shilongo Ltd uses costing to attribute costs to individual products and services provided
to its customers. It has begun the preparation of its fixed production cost budget for the
forthcoming period. The company three production departments Machining, Assembly
and Finishing; and two service departments Stores and Maintenance.
The following costs have been produced:
Machining Assembly Finishing Stores Maintenance
2,500 1,500 1,000
Overhead cost $
6,000
800
The number of machine and labor hours budgeted for the forthcoming period is
budgeted as follows:-
Machining Assembly Finishing
Machine hours
500
40
50
Labor hours
100
300
200
Overheads are absorbed in Assembly and Finishing departments on a Labor hour
basis; and in Machining departments they are absorbed on a machine hour basis.
It has been estimated that service departments usage is as follows:
Machining Assembly Finishing Stores Maintenance
Maintenance
55%
20%
20%
5%
- Stores
40%
30%
20%
10%
Required:
b) Calculate the overhead…
Chapter 4 Solutions
Managerial Accounting
Ch. 4 - Why would management be concerned about the...Ch. 4 - Why would a manufacturing company with multiple...Ch. 4 - Prob. 3DQCh. 4 - Prob. 4DQCh. 4 - How does activity-based costing differ from the...Ch. 4 - Prob. 6DQCh. 4 - Prob. 7DQCh. 4 - Under what circumstances might the activity-based...Ch. 4 - Prob. 9DQCh. 4 - Prob. 10DQ
Ch. 4 - Single plantwide factory overhead rate The total...Ch. 4 - Multiple production department factory overhead...Ch. 4 - Activity-based costing: factory overhead costs The...Ch. 4 - Activity-based costing: selling and administrative...Ch. 4 - Activity-based costing for a service business...Ch. 4 - Kennedy Appliance Inc.s Machining Department...Ch. 4 - Bach Instruments Inc. makes three musical...Ch. 4 - Scrumptious Snacks Inc. manufactures three types...Ch. 4 - Isaac Engines Inc. produces three productspistons,...Ch. 4 - Handy Leather, Inc., produces three sizes of...Ch. 4 - Eclipse Motor Company manufactures two types of...Ch. 4 - The management of Nova Industries Inc....Ch. 4 - Comfort Foods Inc. uses activity-based costing to...Ch. 4 - Nozama.com Inc. sells consumer electronics over...Ch. 4 - Hercules Inc. manufactures elliptical exercise...Ch. 4 - Lonsdale Inc. manufactures entry and dining room...Ch. 4 - Activity cost pools, activity rates, and product...Ch. 4 - Handbrain Inc. is considering a change to...Ch. 4 - Prob. 14ECh. 4 - Activity-based costing and product cost distortion...Ch. 4 - Prob. 16ECh. 4 - Evaluating selling and administrative cost...Ch. 4 - Prob. 18ECh. 4 - Prob. 19ECh. 4 - Activity-based costing for a service company...Ch. 4 - Bounce Back Insurance Company carries three major...Ch. 4 - Gwinnett County Chrome Company manufactures three...Ch. 4 - The management of Gwinnett County Chrome Company,...Ch. 4 - Activity-based and department rate product costing...Ch. 4 - Activity-based product costing Mello Manufacturing...Ch. 4 - Allocating selling and administrative expenses...Ch. 4 - Product costing and decision analysis for a...Ch. 4 - Single plantwide factory overhead rate Spotted Cow...Ch. 4 - Multiple production department factory overhead...Ch. 4 - Activity-based department rate product costing and...Ch. 4 - Activity-based product costing Sweet Sugar Company...Ch. 4 - Allocating selling and administrative expenses...Ch. 4 - Product costing and decision analysis for a...Ch. 4 - Life Force Fitness, Inc., assembles and sells...Ch. 4 - Prob. 2MADCh. 4 - Prob. 3MADCh. 4 - Production run size and activity improvement...Ch. 4 - Prob. 5MADCh. 4 - Ethics in Action The controller of Tri Con Global...Ch. 4 - Communication The controller of New Wave Sounds...Ch. 4 - Pelder Products Company manufactures two types of...Ch. 4 - The Chocolate Baker specializes in chocolate baked...Ch. 4 - Young Company is beginning operations and is...Ch. 4 - Cynthia Rogers, the cost accountant for Sanford...
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