Exercise 4-2 (Algo) Compute Activity Rates [LO4-2] [The following information applies to the questions displayed below.] Rustafson Corporation is a diversified manufacturer of consumer goods. The company the following seven activity cost pools: Activity Cost Pool Labor-related Machine-related Machine setups Production orders Product testing Packaging General factory Exercise 4-2 Part 1 (Algo) Activity Cost Pool Labor-related Machine-related Estimated Overhead Cost $ 17,200 $4,000 $ 18,000 $ 10,500 $ 27,600 $ 62,900 $ 57,600 Machine setups Production orders Product testing Packaging General factory Required: 1. Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal place Activity Rate per DLH per MH per setup per order Expected Activity 4,000 direct labor-hours 8,000 machine-hours per test per package per DLH 500 setups 300 orders 1,200 tests 3,700 packages 4,000 direct labor-hours

Exercise 4-2 (Algo) Compute Activity Rates [LO4-2] [The following information applies to the questions displayed below.] Rustafson Corporation is a diversified manufacturer of consumer goods. The company the following seven activity cost pools: Activity Cost Pool Labor-related Machine-related Machine setups Production orders Product testing Packaging General factory Exercise 4-2 Part 1 (Algo) Activity Cost Pool Labor-related Machine-related Estimated Overhead Cost $ 17,200 $4,000 $ 18,000 $ 10,500 $ 27,600 $ 62,900 $ 57,600 Machine setups Production orders Product testing Packaging General factory Required: 1. Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal place Activity Rate per DLH per MH per setup per order Expected Activity 4,000 direct labor-hours 8,000 machine-hours per test per package per DLH 500 setups 300 orders 1,200 tests 3,700 packages 4,000 direct labor-hours

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter4: Job-order Costing And Overhead Application

Section: Chapter Questions

Problem 34BEB: Use the following information for Brief Exercises 4-34 and 4-35: Sanjay Company manufactures a...

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Required information [The following information applies to the questions displayed below.] Rusties Company recently implemented an activity-based costing system. At the beginning of the year, management made the following estimates of cost and activity in the company's five activity cost pools: Activity Cost Pool Labor-related Purchase orders Product testing Template etching General factory Activity Cost Pool Labor-related (DLHs) Purchase orders (orders) Product testing (tests) Template etching (templates) General factory (MHs) Activity Measure. Direct labor-hours Number of orders Number of tests Number of templates Machine-hours Product A Product B Product C Product D Total Overhead Cost Expected Overhead Cost 2. The expected activity for the year was distributed among the company's four products as follows: Product A 500 60 260 0 3,900 $ 40,320 $1,650 $ 7,700 $ 1,260 $ 69,000 Expected Activity 2,240 DLHS Expected Activity Product B 140 120 60 28 3,200 550 orders 385 tests 45…
Activity-Based Costing and Customer Profitability Schneider Electric manufactures power distribution equipment for commercial customers, such as hospitals and manufacturers. Activity-based costing was used to determine customer profitability. Customer service activities were assigned to individual customers, using the following assumed customer service activities, activity base, and activity rate: Customer Service Activity Activity Base Activity Rate Bid preparation Number of bid requests $400 per request Shipment Number of shipments $ 80 per shipment Support standard items Number of standard items ordered $ 25 per std. item Support nonstandard items Number of nonstandard items ordered $150 per nonstd. item Assume that the company had the following gross profit information for three representative customers: Customer 1 Customer 2 Customer 3 Revenues $120,000 $200,000 $160,000 Cost of goods sold 76,800 110,000 83,200 Gross profit…
Required information [The following information applies to the questions displayed below.] Rusties Company recently implemented an activity-based costing system. At the beginning of the year, management made the following estimates of cost and activity in the company's five activity cost pools: Activity Cost Pool Labor-related Purchase orders Product testing Template etching General factory Activity Cost Pool Labor-related (DLHS) Activity Measure Product A Product B Product C Product D Direct labor-hours Number of orders Number of tests Number of templates Machine-hours Total Overhead Cost Expected Overhead Cost $ 30,115 $ 2,320 $ 6,930 $ 870 $ 65,100 2. The expected activity for the year was distributed among the company's four products as follows: Product A 625 30 190 Expected Activity 1,585 DLHS Product B 160 Purchase orders (orders) 190 Product testing (tests) 55 Template etching (templates) 17 3 General factory (MHS) 3,600 1,700 2,300 Using the ABC data, determine the total amount…
Activity-Based Costing and Customer Profitability Schneider Electric manufactures power distribution equipment for commercial customers, such as hospitals and manufacturers. Activity-based costing was used to determine customer profitability. Customer service activities were assigned to individual customers, using the following assumed customer service activities, activity base, and activity rate: Customer Service Activity Activity Base Activity Rate Bid preparation Number of bid requests $400 per request Shipment Number of shipments $ 80 per shipment Support standard items Number of standard items ordered $ 25 per std. item Support nonstandard items Number of nonstandard items ordered $150 per nonstd. item Assume that the company had the following gross profit information for three representative customers: Customer 1 Customer 2 Customer 3 Revenues $120,000 $200,000 $160,000 Cost of goods sold 76,800 110,000 83,200 Gross profit…
ell Computer incurs the following costs: LOADING... (Click the icon to view the costs.) Requirement Classify each of the cost items (a-h) into one of the business functions of the value chain. Cost Item Value Chain Business Function a. Utility costs for the plant assembling the Latitude computer line of products b. Distribution costs for shipping the Latitude line of products to a retail chain c. Payment to David Newbury Designs for design of the XPS 2-in-1 laptop d. Salary of computer scientist working on the next generation of servers e. Cost of Dell employees' visit to a major customer to demonstrate Dell's
Consumption Ratios; Activity RatesSaludable Company produces two types of get-well cards: scented andregular. Drivers for the four activities are as follows: ScentedCards RegularCards Inspection hoursSetup hoursMachine hoursNumber of moves 1,0804209602.880 7201802,880720 The following activity data have been collected: Inspecting productsSetting up equipmentMachiningMoving materials $45,00028,50030,72016,200 Required:1. Calculate the consumption ratios for the four drivers (round totwo decimal places).2. CONCEPTUAL CONNECTION Is there evidence of productdiversity? Explain the significance of product diversity for decisionmaking if the company chooses to use machine hours to assign all overhead.3. Calculate the activity rates that would be used to assign costs toeach product (round to two decimal places).4. Suppose that the activity rate for inspecting products is $20 perinspection hour. How many hours of inspection are expected forthe coming year?
An allocation base: a. can be units of output if the company has a single product O b. is determined before the period begins. O c. All the given answers are correct. O d. can be direct labor cost e. is a measure used to assign manufacturing overhead costs to products and services PAGE NEXT PAGE IZ TWO Jump CQURSE OUTLINE_SPRING2021 ► tv MacBook Air
Assume that a company has recently switched to JIT manufacturing. Each manufacturing cell produces a single product or major subassembly. Cell workers have been trained to perform a variety of tasks. Additionally, many services have been decentralized. Costs are assigned to products using direct tracing, driver tracing, and allocation. For each cost listed, indicate the most likely product cost assignment method used before JIT and after JIT. Set up a table with three columns: Cost Item, Before JIT, and After JIT. You may assume that direct tracing is used whenever possible, followed by driver tracing, with allocation being the method of last resort. Inspection costs Power to heat, light, and cool plant Minor repairs on production equipment Salary of production supervisor (department/cell) Oil to lubricate machinery Salary of plant supervisor Costs to set up machinery Salaries of janitors Power to operate production equipment Taxes on plant and equipment Depreciation on production…
D. ABC Company is a manufacturer of electronic parts and uses a service department charge system to charge profit centers. The following table identifies the service categories, costs and activity bases used by CCS Division. CCS Division Help desk Network center Electronic mail Local voice support Activity Base Number of calls Number of devices monitored Number of user account Number of phone extension C. d. Assumed Cost 73,600 614,250 53,550 127,238 Assumed Activity Base Quantity 2,300 calls 9,450 devices 6,300 accounts 8,775 extensions One of the profit centers for ABC Company is the Calamba Branch. Assume the following data for Calamba Branch: a. The branch has 4,000 employees of which 50% are office employees. b. All the office employees have a phone and 90% of them have a computer on the network. Ninety percent of the employees with a computer also have an email account. The average number of help desk calls for March 20X2 was .50 call per individual with a computer. e. There are…
Required information [The following information applies to the questions displayed below.] Rusties Company recently implemented an activity-based costing system. At the beginning of the year, management made the following estimates of cost and activity in the company's five activity cost pools: Activity Cost Pool Labor-related Purchase orders Product testing Template etching General factory Required: 1. Compute the activity rate for each of the activity cost pools. Activity Cost Pool Labor-related Activity Measure Direct labor-hours Number of orders Number of tests Number of templates Machine-hours Purchase orders Product testing Template etching General factory Activity Rate per DLH per order per test per template per MH < Prev Expected Overhead Cost $ 18,000 $ 1,050 $ 3,500 $ 700 $ 50,000 5 of 5 Expected Activity 2,000 DLHS 525 orders 350 tests 28 templates 10,000 MHS ww Next
Target prices, target costs, activity-based costing. Snappy Tiles is a small distributor of marble tiles. Snappy identies its three major activities and cost pools as ordering, receiving and storage, and shipping, and it reports the following details for 2016:
Delauder Enterprises makes a variety of products that it sells to other businesses. The company's activity-based costing system has four activity cost pools for assigning costs to products and customers. Details concerning that activity-based costing system are listed below: Activity Cost Pool Supporting assembly Processing batches. Processing orders. Serving customers Number of units purchased Number of batches. Activity Measure. Direct labor-hours (DLHS) Number of batches. Number of orders. Number of customers The cost of serving customers, $1,608.00 per customer, is the cost of serving a customer for one year. Grennon Corporation buys only one of the company's products. The details of last year's purchases of this product are listed below: Number of orders Direct labor-hour requirement. Selling price Direct materials cost Direct labor cost 1,500 units 5 batches 2 orders Activity Rate $ 3.45 per DLH $ 193.30 per batch $83.05 per order. $ 1,608.00 per customer 0.25 DLHS per unit $…