Activity-Based Suppler CostingClearound uses Alpha Electronics and La Paz Company to buy two electronic components used in the manufacture of its cell phones: Component 125X and Component 30%. Consider two activities: testing componentsand reordering components. After the two components are inserted, testing is done to ensure that the two components in the phones are working properly. Reordering occurs because one or both of the componentshave failed the test and it is necessary to replenish component inventories. Activity cost information and other data needed for supplier costing are as follows:1. Activity Cests Caused by Suppliers (testing failures and reordering as a result)ActivityTesting componentsReandering componentsII. Supplier DataUnit purchase priceUnits purchasedUnit costAlpha Electronics125X$10120,0001,60060125X11.57$4,7007004030V$2630VFailed testsNumber of reordersRequired:Determine the cost of each supplier by using ABC Reund Test and Reorder rates to the nearest dollar and final answers to the nearest centAlpha ElectronicsLa Par Company27Costs$1,200,000300,000La Par Company125X304$1215,000100$2815,00010O125X12.0030720

ABC means activity based costing system of costing. Under this system, all type of overhead and…

Activity-Based Suppler Costing Clearounduses Alpha Electronics and La Par Company to buy two electronic components used in the manufacture of its cell phones: Component 125X and Component 30%. Consider ten activities: testing componen and reordering components. After the two components are inserted, testing is done to ensure that the two components in the phones are working property. Reordering occurs because one or both of the components have falled the test and it is necessary to replenish component inventories Activity cost information and other data needed for supplier costing are as foliows: 1. Activity Cests Caused by Suppliers (testing failures and reardering as a result) Activity Testing components Reordering components II. Supplier Data Unit purchase price Units purchased Failed tests Number of reorders Required: Unit cost Alpha Electronics 125X $10 120,000 1,600 125x 11.57 60 304 $26 4,700 700 40 304 Costs $1,200,000 300,000 27 La Pax Company 125X $12 15,000 10 0 Determine the cost of each supplier by using ABC Round Test and Reorder rates to the nearest dollac, and final answers Alpha Electronics La Par Company 301 $26 15,000 125X 12.00 10 0 30V 28 the nearest cent

Activity-Based Suppler Costing Clearounduses Alpha Electronics and La Par Company to buy two electronic components used in the manufacture of its cell phones: Component 125X and Component 30%. Consider ten activities: testing componen and reordering components. After the two components are inserted, testing is done to ensure that the two components in the phones are working property. Reordering occurs because one or both of the components have falled the test and it is necessary to replenish component inventories Activity cost information and other data needed for supplier costing are as foliows: 1. Activity Cests Caused by Suppliers (testing failures and reardering as a result) Activity Testing components Reordering components II. Supplier Data Unit purchase price Units purchased Failed tests Number of reorders Required: Unit cost Alpha Electronics 125X $10 120,000 1,600 125x 11.57 60 304 $26 4,700 700 40 304 Costs $1,200,000 300,000 27 La Pax Company 125X $12 15,000 10 0 Determine the cost of each supplier by using ABC Round Test and Reorder rates to the nearest dollac, and final answers Alpha Electronics La Par Company 301 $26 15,000 125X 12.00 10 0 30V 28 the nearest cent

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Julio produces two types of calculator, standard and deluxe. The company is currently using a traditional costing system with machine hours as the cost driver but is considering a move to activity-based costing. In preparing for the possible switch, Julio has identified two cost pools: materials handling and setup. The collected data follow: Standard Model Deluxe Model Number of machine hours 25,800 30,800 Number of material moves Number of setups 590 890 70 540 Total estimated overhead costs are $347,100, of which $170,200 is assigned to the material handling cost pool and $176,900 is assigned to the setup cost pool. Required: 1. Calculate the overhead assigned to each product using the traditional cost system. 2. Calculate the overhead assigned to each product using ABC.
Determining the Optimal Product Mix with One Constrained Resource Casual Essentials, Inc. manufactures two types of team shirts, the Homerun and the Goalpost, with unit contribution margins of $11 and $15, respectively. Regardless of type, each team shirts must be fed through a stitching machine to affix the appropriate team logo. The firm leases seven machines that each provides 1,000 hours of machine time per year. Each Homerun shirt requires 6 minutes of machine time, and each Goalpost shirt requires 30 minutes of machine time. Assume that there are no other constraints. Required: If required, round your answers to the nearest whole number. If an amount is zero, enter "0". 1. What is the contribution margin per hour of machine time for each type of team shirts? Contribution Margin Homerun $fill in the blank 1 Goalpost $fill in the blank 2 2. What is the optimal mix of team shirts? Optimal Mix Homerun fill in the blank 3 units Goalpost fill in the blank 4 units…
The Pittsburgh division of Vermont Machinery, Inc., manufactures drill bits.One of the production processes for a drill bit requires tipping, whereby carbide tips are inserted into the bit to make it stronger and more durable. This tipping process usually requires four or five operators, depending on the weekly workload. The same operators are also assigned to the stamping operation, where the size of the drill bit and the company's logo is imprinted on the bit. Vermont is considering acquiring three automatic tipping machines to replace the manual tipping and stamping operations. If the tipping process is automated, the division's engineers will have to redesign the shapes of the carbide tips to be used in the machine. The new design requires less carbide, resulting in savings on materials. The following financial data have been compiled: Project life: six years. Expected annual savings: reduced labor, $56,000; reduced material, $75,000; other benefits (reduced carpal tunnel syndrome…
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Answer the given question with a proper explanation and step-by-step solution. Please help me find an answer.
Theory of constraints, throughput margin, and relevant costs. Washington Industries manufactures electronic testing equipment. Washington also installs the equipment at customers’ sites and ensures that it functions smoothly. Additional information on the manufacturing and installation departments is as follows (capacities are expressed in terms of the number of units of electronic testing equipment): Washington manufactures only 250 units per year because the installation department has only enough capacity to install 250 units. The equipment sells for $55,000 per unit (installed) and has direct material costs of $30,000. All costs other than direct material costs are fixed. The following requirements refer only to the preceding data. There is no connection between the requirements.
Woodruff Company is currently producing a snowmobile that uses five specialized parts. Engineering has proposed replacing these specialized parts with commodity parts, which will cost less and can be purchased in larger order quantities. Current activity capacity and demand (with specialized parts required) and expected activity demand (with only commodity parts required) are provided. Activities Activity Driver ActivityCapacity Current ActivityDemand Expected ActivityDemand Material usage Number of parts 200,000 200,000 200,000 Installing parts Direct labor hours 20,000 20,000 16,000 Purchasing parts Number of orders 7,600 6,498 3,990 Additionally, the following activity cost data are provided: Material usage: $11 per specialized part used; $27 per commodity part; no fixed activity cost. Installing parts: $21 per direct labor hour; no fixed activity cost. Purchasing parts: Four salaried clerks, each earning a $47,000 annual salary; each clerk is capable of processing 1,900…
Activity-Based Supplier Costing Clearsound uses Alpha Electronics and La Paz Company to buy two electronic components used in the manufacture of its cell phones: Component 125X and Component 30Y. Consider two activities: testing components and reordering components. After the two components are inserted, testing is done to ensure that the two components in the phones are working properly. Reordering occurs because one or both of the components have failed the test and it is necessary to replenish component inventories. Activity cost information and other data needed for supplier costing are as follows: I. Activity Costs Caused by Suppliers (testing failures and reordering as a result) Activity Costs Testing components $1,200,000 Reordering components 300,000 II. Supplier Data Alpha Electronics La Paz Company 125X 30Y 125X 30Y Unit purchase price $10 $26 $12 $28 Units purchased 120,000 77,800 15,000 15,000 Failed tests…
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