Felcher, 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: (Click the icon to view the budgeted costs and activity bases.) Read the requirements. 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.) Materials handling Machine setup Insertion of parts Finishing Predetermined OH =allocation rate Requirement 2. Job 86 required the production of 170 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 170 bumpers and required one setup. Compute the indirect manufacturing cost allocated to Job 86. (Round all amou Job 86: Materials handling Machine setup Insertion of parts Finishing Total mfg. OH costs Allocated Mfg. OH Cost Requirements 1. Compute the predetermined overhead allocation rate for each activity. 2. Job 86 required the production of 170 bumpers and required one setup. Compute the indirect manufacturing cost allocated to Job 86. Data table Activity Total Budgeted Cost Allocation Base Materials handling S 8,000 Number of parts Machine setup Insertion of parts 2,700 Number of setups 60,000 Number of parts Finishing 84,000 Finishing direct labor hours $ 154,700 Total
Felcher, 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: (Click the icon to view the budgeted costs and activity bases.) Read the requirements. 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.) Materials handling Machine setup Insertion of parts Finishing Predetermined OH =allocation rate Requirement 2. Job 86 required the production of 170 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 170 bumpers and required one setup. Compute the indirect manufacturing cost allocated to Job 86. (Round all amou Job 86: Materials handling Machine setup Insertion of parts Finishing Total mfg. OH costs Allocated Mfg. OH Cost Requirements 1. Compute the predetermined overhead allocation rate for each activity. 2. Job 86 required the production of 170 bumpers and required one setup. Compute the indirect manufacturing cost allocated to Job 86. Data table Activity Total Budgeted Cost Allocation Base Materials handling S 8,000 Number of parts Machine setup Insertion of parts 2,700 Number of setups 60,000 Number of parts Finishing 84,000 Finishing direct labor hours $ 154,700 Total
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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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:Felcher, 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:
(Click the icon to view the budgeted costs and activity bases.)
Read the requirements.
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.)
Materials handling
Machine setup
Insertion of parts
Finishing
+
Predetermined OH
allocation rate
Requirement 2. Job 86 required the production of 170 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 170 bumpers and required one setup. Compute the indirect manufacturing cost allocated to Job 86. (Round all amou
Job 86:
Materials handling
Machine setup
Insertion of parts
Finishing
Total mfg. OH costs
Allocated Mfg. OH Cost
Requirements
1. Compute the predetermined overhead allocation rate for each activity.
2. Job 86 required the production of 170 bumpers and required one setup.
Compute the indirect manufacturing cost allocated to Job 86.
Data table
Activity
Total Budgeted
Cost
Allocation Base
Materials handling
Machine setup
$
Insertion of parts
8,000 Number of parts
2,700 Number of setups
60,000 Number of parts
84,000
Finishing
Finishing direct labor hours
154,700
Total
Felcher expects to produce 500 chrome bumpers during the year. The bumpers
are expected to use 1,000 parts, require 10 setups, and consume 3,000 hours
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