FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- In Class Assignment 1 AlSaleh has assigned overhead on a plantwide basis to its two products (Tables and Chairs) using direct labor hours which are estimated to be 200,000 for the current year. The company has decided to experiment with activity-based costing and has created two activity cost pools and related activity cost drivers. These two cost pools are Ordering and receiving (cost driver is Purchase orders) and machine setup (cost driver is number of setups). Overhead allocated to the ordering and receiving cost pool is $200,000, and $800,000 is allocated to the machine setup cost pool. Additional information related to these pools is as follows: Cost Drivers Tables Chairs Purchase orders 30,000 10,000 number of setups 10,000 30,000 a. Determine the amount of overhead assigned to the table product line and the chairs product line using activity-based costing. b. What amount of overhead would be assigned to the tables and chairs product lines using the traditional approach,…arrow_forwardPronghorn Industries has three activity cost pools and two products. It estimates production 2,000 units of Product BC113 and 1,000 of Product AD908. Having identified its activity cost pools and the cost drivers for each pool, Pronghorn accumulated the following data relative to those activity cost pools and cost drivers. Activity Cost Pools Machine setup Machining Packing (a) Annual Overhead Data Activity Cost Pools Machine setup Using the above data, do the following: Machining Packing Cost Drivers $ Setups $ Machine hours Orders Estimated Overhead Estimated Overhead $17,500 120,750 28,670 Use of Cost Drivers per Product Estimated Use of Cost Drivers per Activity 35 Prepare a schedule showing the computations of the activity-based overhead rates per cost driver. 4,830 470 Estimated Use of Cost Drivers per Activity setups machine hours Product BC113 orders 20 1,140 120 $ $ $ Product AD908 15 3,690 350 Activity-Based Overhead Rates per setup per machine hr. per orderarrow_forwardGreenwood Company manufactures two products—14,000 units of Product Y and 6,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z: Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity Machining Machine-hours $ 192,000 10,000 MHs Machine setups Number of setups $ 50,400 120 setups Production design Number of products $ 76,000 2 products General factory Direct labor-hours $ 387,200 16,000 DLHs Activity Measure Product Y Product Z Machining 7,200 2,800 Number of setups 50 70 Number of products 1 1 Direct labor-hours 7,200 8,800 What is the activity rate for the Product Design activity cost pool? What is the activity rate for the General Factory…arrow_forward
- Greenwood Company manufactures two products-13,000 units of Product Y and 5,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity- based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z: Activity Cost Pool Machining Machine setups Production design General factory TOP- OWS Activity Measure Machining Number of setups Number of products Direct labor-hours Machining cost Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Product Y +1 (252) 484-2153 Oh nun % Product Y Product Z 8,800 3,200 40 240 1 1 8,800 3,200 12. Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z? (Round your in calculations to 2 decimal places. Round your answers to 2 decimal places.) Product Zarrow_forwardGreenwood Company manufactures two products—15,000 units of Product Y and 7,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z: Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity Machining Machine-hours $ 227,700 11,000 MHs Machine setups Number of setups $ 153,900 270 setups Production design Number of products $ 91,000 2 products General factory Direct labor-hours $ 257,000 10,000 DLHs Activity Measure Product Y Product Z Machining 8,700 2,300 Number of setups 60 210 Number of products 1 1 Direct labor-hours 8,700 1,300 Required: 1. What is the company’s plantwide overhead rate? (Round your answer to 2 decimal places.) PLEASE ROUND TO…arrow_forwardHaresharrow_forward
- Carlise Corp., which manufactures ceiling fans, currently has two product lines, the Indoor and the Outdoor. Carlise has to overhead of $132,720. Carlise has identified the following information about its overhead activity cost pools and the two product lines: Quantity/Amount Consumed by Indoor Line Quantity/Amount Consumed by Outdoor Line Activity Cost Pools Cost Driver Materials handling Number of moves Quality control Number of inspections Machine maintenance Number of machine hours Required: 1. Suppose Carlise used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount.) Indoor Model Outdoor Model Total Cost Assigned to Pool $21, 120 $71,760 4,600 inspections $39,840 29,000 machine hours 19,000 machine hours 600 moves 500 moves 5,800 inspections Overhead Assignedarrow_forwardGreenwood Company manufactures two products—15,000 units of Product Y and 7,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z: Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity Machining Machine-hours $ 231,000 11,000 MHs Machine setups Number of setups $ 180,000 300 setups Production design Number of products $ 94,000 2 products General factory Direct labor-hours $ 260,000 10,000 DLHs Activity Measure Product Y Product Z Machining 9,000 2,000 Number of setups 60 240 Number of products 1 1 Direct labor-hours 9,000 1,000 5. What is the activity rate for the Product Design activity cost pool?arrow_forwardMaxey & Sons manufactures two types of storage cabinets-lype A and Type B-and applies manufacturing overhead to all units at the rate of $120 per machine hour. Production information follows. Descriptions Anticipated volume (units) Direct-material cost per unit Direct-labor cost per unit Descriptions The controller, who is studying the use of activity-based costing, has determined that the firm's overhead can be identified with three activities: manufacturing setups, machine processing, and product shipping. Data on the number of setups, machine hours, and outgoing shipments, which are the activities' three respective cost drivers, follow. Setups Machine hours Outgoing shipments Type A 140 48,000 200 Required 1 Type A 24,000 $28 33 Required 2 Required 3 The firm's total overhead of $13,860,000 is subdivided as follows: manufacturing setups, $3,024,000; machine processing. $8,316,000; and product shipping, $2,520,000. Required: 1. Compute the unit manufacturing cost of Type A and Type B…arrow_forward
- Please do not give image formatarrow_forwardGreenwood Company manufactures two products—15,000 units of Product Y and 7,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z: Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity Machining Machine-hours $ 227,700 11,000 MHs Machine setups Number of setups $ 153,900 270 setups Production design Number of products $ 91,000 2 products General factory Direct labor-hours $ 257,000 10,000 DLHs Activity Measure Product Y Product Z Machining 8,700 2,300 Number of setups 60 210 Number of products 1 1 Direct labor-hours 8,700 1,300 10. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z? (Round your…arrow_forwardHaresharrow_forward
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