A. Calculate the overhead rates for each activity. B. Calculate the dollar amount of overhead that should be assigned to firm and to extra firm.
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The company sells firm and extra firm mattresses. We plan to use ABC. The company has
accumulated the following data.
Activities Cost Cost Driver
Materials processing $1,400,000 Number of parts
Firmness testing 400,000
Number of tests
Customer calls 200,000 Number of customer calls
During the year, 100,000 parts were handled (75,000 for firm mattresses and 25,000 for
extra firm), 20,000 firmness tests were conducted (12,500 for firm and 7,500 for extra
firm), and 10,000 customers’ calls were answered (7,500 for firm and 2,500 for extra
firm)
A. Calculate the
B. Calculate the dollar amount of overhead that should be assigned to firm and to extra
firm.
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- Mattress Comfort Corporation manufactures two types of mattresses, Dreamer and Sleeper. Dreamer has a complex design that uses gel-filled compartments to provide support. Sleeper is simpler to manufacture and uses conventional padding. Last year, Mattress Comfort had the following revenues and costs: Dreamer Sleeper Total Revenue $700,000 $500,000 $1,200,000 Direct Materials 300,000 150,000 450,000 Direct Labor 150,000 75,000 225,000 Indirect Costs: Administration 60,000 Production Setup…Mattress Comfort Corporation manufactures two types of mattresses, Dreamer and Sleeper. Dreamer has a complex design that uses gel-filled compartments to provide support. Sleeper is simpler to manufacture and uses conventional padding. Last year, Mattress Comfort had the following revenues and costs: Dreamer Sleeper Total Revenue $1,200,000 $900,000 $2,100,000 Direct Materials 500,000 450,000 950,000 Direct Labor 250,000 200,000 450,000 Indirect Costs: Administration 80,000 Production Setup 100,000 Quality Control 120,000…Deming Incorporated recently implemented an activity-based costing system. Total results from all products manufactured in the current year are: Activity cost pool Total cost Total activity Assembly $7,500 1,500 machine-hours Packaging $3,150 450 number of orders Quality control inspections $900 200 number of inspections Deming manufactures sprinkler heads for commercial applications. Annual production and sales of the Sizzler, one type of its heads, is 2,300 units. The following relates the the most recent year. Annual machine hours 1,000 Annual number of orders…
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- Sunshine Company sells custom made surf boards in California. The finance manager has supplied the following data from its activity-based costing system: Overhead Costs Staff Salaries $500,000 Selling and administration overheads 200,000 Total Overhead Costs $700,000 Activity Cost Pool Activity Measure Total Activity for the Year Product design Number of new designs 500 new designs Order Processing Number of Customer orders 700 orders Customer Support Number of Customers 400 customers Others Organization sustaining activity Not applicable Distribution of Resource Consumption across Activities Product Design Order Processing Customer Support Other Total Staff Salaries 40% 30% 20% 10% 100% Selling and administration overheads 30% 10% 20% 40% 100% During the year Sunshine Company completed three individual orders for a new customer, Tarpaper…Medical Tape makes two products: Generic and Label. It estimates it will produce 404,444 units of Generic and 656,000 of Label, and the overhead for each of its cost pools is as follows: Estimated Cost Pool Overhead Material Receipts $126,000 Machine Setups 325,000 Assembly 585,000 Inspection 330,000 Total $1,366,000 It has also estimated the activities for each cost driver as follows: Driver Generic Label Inspections 450 650 Requisitions 400 1,000 Parts 250 400 Setups 300 350 How much is the overhead allocated to each unit of Generic and Label? Do not round intermediate computations and round your answers to two decimal places. Generic Label Cost per unit $Best Ink produces printers for personal computers. The following information is available for production of a recent order of 500 printers. Process time 16.0 hours Inspection time 3.5 hours Move time 9.0 hours Wait time 21.5 hours 1. Compute the company’s manufacturing cycle time. 2. Compute the company’s manufacturing cycle efficiency. 3. Assume the company wishes to increase its manufacturing cycle efficiency to 0.80. If process time is unchanged, what is the maximum number of hours of non-value-added time the company can have and meet this goal?
- Based from the given data, answer the following questions. Show your computations.G Toy Shop manufactures children's plush toys and incurred the following during the process: (The following are within one month of production with 980 total manufactured plush toys).P 150,000 for materials such as cloth, pile textiles and stuffing materialsP 10,000 for threads and accessoriesP 12,000 building rentalP 45,000 salaries of 5 factory workersP 10,000 security guard salaryP 5,500 depreciation of machines and equipment 4) What is the amount of Direct labor? a. P55,000 b. P10,000 c. P45,000 d. P0.005) What is the amount of Overhead Cost? a. P20,000b. P17,500c. P25,500d. P5,500 6) What is the amount of the Product Cost? a. P242,500 b. P245,000 c. P232,500 d. 240,500Erie Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to control its costs. The labor standards that have been set for one Jogging Mate are as follows: Standard Standard Rate per Hour $ 6.20 Standard Hours 24 minutes Cost $ 2.48 During August, 8,620 hours of direct labor time were needed to make 19,600 units of the Jogging Mate. The direct labor cost totaled $51,720 for the month. Required: 1. What is the standard labor-hours allowed (SH) to makes 19,600 Jogging Mates? 2 What is the standard labor cost allowed (SH x SR) to make 19,.600 Jogging Mates? 3. What is the labor spending variance? 4. What is the labor rate variance and the labor efficiency variance? 5. The budgeted variable manufacturing overhead rate is S4.10 per direct labor-hour. During August, the company incurred $41,376 in variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month. (For requirements 3 through 5, indicate…Erie Company manufactures a mobile fitness device called the Jogging Mate. The company uses standards to control its costs. The labor standards that have been set for one Jogging Mate are as follows: Standard Hours 27 minutes Standard Rate per Hour $6.00 During August, 9,540 hours of direct labor time were needed to make 19,600 units of the Jogging Mate. The direct labor cost totaled $56,286 for the month. Standard Cost $2.70 Required: 1. What is the standard labor-hours allowed (SH) to makes 19,600 Jogging Mates? 2. What is the standard labor cost allowed (SH x SR) to make 19,600 Jogging Mates? 3. What is the labor spending variance? 4. What is the labor rate variance and the labor efficiency variance? 5. The budgeted variable manufacturing overhead rate is $4.50 per direct labor-hour. During August, the company incurred $47,700 in variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month. (For requirements 3 through 5, indicate…