EXERCISE 1 XYZ Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity $45,000 80,000 15,000 30,000 50,000 Number of moves. Material-handling costs.. Machine costs. Order costs.. 450 Machine hours. 20,000 750 Receiving costs. Setup costs.. Number of orders. Number of parts.. Number of setups.. 50,000 250 Assume that each activity corresponds to a process. XYZ's normal activity is 5,000 direct labor hours. The following two jobs were completed during March: Job X-1 Job Y-4 Direct materials. Direct labor ($15 per hour). Units completed... Number of moves. $1,500 $750 $2,000 $750 200 200 3 Machine hours.. 125 75 Number of orders. Number of parts. Number of setups.. 3 12 200 800 1 4 Required: 1. Determine the unit cost for each job using direct labor hours to apply overhead.
EXERCISE 1 XYZ Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity $45,000 80,000 15,000 30,000 50,000 Number of moves. Material-handling costs.. Machine costs. Order costs.. 450 Machine hours. 20,000 750 Receiving costs. Setup costs.. Number of orders. Number of parts.. Number of setups.. 50,000 250 Assume that each activity corresponds to a process. XYZ's normal activity is 5,000 direct labor hours. The following two jobs were completed during March: Job X-1 Job Y-4 Direct materials. Direct labor ($15 per hour). Units completed... Number of moves. $1,500 $750 $2,000 $750 200 200 3 Machine hours.. 125 75 Number of orders. Number of parts. Number of setups.. 3 12 200 800 1 4 Required: 1. Determine the unit cost for each job using direct labor hours to apply overhead.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 27E: Plata Company has identified the following overhead activities, costs, and activity drivers for the...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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