Farrington, Inc. uses activity-based costing to account for its chrome bumper manufacturing process. Company managers have identified four manufacturing activities: materials handling, machine setup, insertion of parts, and finishing. The budgeted activity costs for the year and their allocation bases are as follows: Requirement 1. Compute the predetermined overhead allocation rate for each activity. Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the allocation rate for each activity. (Round your answers to the nearest cent.) Predetermined OH ? ÷ ? = allocation rate Materials handling ? ÷ ? = ? Machine setup ? ÷ ? = ? Insertion of parts ? ÷ ? = ? Finishing ? ÷ ? = ? Requirement 2. Job 86 required the production of 200 bumpers and required one setup. Compute the indirect manufacturing cost allocated to Job 86. Begin by selecting the formula to allocate overhead (OH) costs. ? × ? = Allocated mfg. overhead costs Job 86 required the production of 200 bumpers and required one setup. Compute the indirect manufacturing cost allocated to Job 86. (Round all amounts to the nearest cent.) Job 86: Allocated Mfg. OH Cost Materials handling ? Machine setup ? Insertion of parts ? Finishing ? Total mfg. OH costs ? Activity Total Budgeted Cost Allocation Base Materials handling $3,000 Number of parts Machine setup 3,900 Number of setups Insertion of parts 52,000 Number of parts Finishing 66,000 Finishing direct labor hours Total $124,900 Farrington expects to produce 500 chrome bumpers during the year. The bumpers are expected to use 1,000 parts, require 5 setups, and consume 2,000 hours of finishing time.
Farrington, Inc. uses activity-based costing to account for its chrome bumper manufacturing process. Company managers have identified four manufacturing activities: materials handling, machine setup, insertion of parts, and finishing. The budgeted activity costs for the year and their allocation bases are as follows: Requirement 1. Compute the predetermined overhead allocation rate for each activity. Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the allocation rate for each activity. (Round your answers to the nearest cent.) Predetermined OH ? ÷ ? = allocation rate Materials handling ? ÷ ? = ? Machine setup ? ÷ ? = ? Insertion of parts ? ÷ ? = ? Finishing ? ÷ ? = ? Requirement 2. Job 86 required the production of 200 bumpers and required one setup. Compute the indirect manufacturing cost allocated to Job 86. Begin by selecting the formula to allocate overhead (OH) costs. ? × ? = Allocated mfg. overhead costs Job 86 required the production of 200 bumpers and required one setup. Compute the indirect manufacturing cost allocated to Job 86. (Round all amounts to the nearest cent.) Job 86: Allocated Mfg. OH Cost Materials handling ? Machine setup ? Insertion of parts ? Finishing ? Total mfg. OH costs ? Activity Total Budgeted Cost Allocation Base Materials handling $3,000 Number of parts Machine setup 3,900 Number of setups Insertion of parts 52,000 Number of parts Finishing 66,000 Finishing direct labor hours Total $124,900 Farrington expects to produce 500 chrome bumpers during the year. The bumpers are expected to use 1,000 parts, require 5 setups, and consume 2,000 hours of finishing time.
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 11E: Lonsdale Inc. manufactures entry and dining room lighting fixtures. Five activities are used in...
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Question
Farrington,
Inc. uses activity-based costing to account for its chrome bumper manufacturing process. Company managers have identified four manufacturing activities: materials handling, machine setup, insertion of parts, and finishing. The budgeted activity costs for the year and their allocation bases are as follows:Requirement 1. Compute the predetermined overhead allocation rate for each activity.
Begin by selecting the formula to calculate the predetermined overhead (OH) allocation rate. Then enter the amounts to compute the allocation rate for each activity. (Round your answers to the nearest cent.)
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Predetermined OH
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?
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÷
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?
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=
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allocation rate
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Materials handling
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?
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÷
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?
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=
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?
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Machine setup
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?
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÷
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?
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=
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?
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Insertion of parts
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?
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÷
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?
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=
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?
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Finishing
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?
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÷
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?
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=
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?
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Requirement 2. Job 86 required the production of
200 bumpers and required one setup. Compute the indirect manufacturing cost allocated to Job 86.
Begin by selecting the formula to allocate overhead (OH) costs.
?
|
×
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?
|
=
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Allocated mfg. overhead costs
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Job 86 required the production of
200
bumpers and required one setup. Compute the indirect manufacturing cost allocated to Job 86. (Round all amounts to the nearest cent.)
Job 86:
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Allocated Mfg. OH Cost
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Materials handling
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?
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Machine setup
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?
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Insertion of parts
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?
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Finishing
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?
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Total mfg. OH costs
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?
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Activity
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Total Budgeted Cost
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Allocation Base
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---|---|---|
Materials handling
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$3,000
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Number of parts
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Machine setup
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3,900
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Number of setups
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Insertion of parts
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52,000
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Number of parts
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Finishing
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66,000
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Finishing direct labor hours
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Total
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$124,900
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Farrington expects to produce 500 chrome bumpers during the year. The bumpers are expected to use 1,000 parts, require 5 setups, and consume 2,000 hours of finishing time.
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