HITech Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. Thecompany, which uses activity-based costing, has identified five activities (and related cost drivers). Eachactivity, its budgeted cost, and related cost driver is identified below.ActivityMaterial handlingMaterial insertionCost$ 225,0002,475,000840,000170,000Cost DriverNumber of partsNumber of partsMachine hoursAutomated machineryFinishingPackagingTotalDirect labor hours170.000$3,880,000Orders shippedThe following information pertains to the three product lines for next year:Economy10,0001,000Standard5,000500Deluxe2,000200Units to be producedOrders to be shippedNumber of parts per unitMachine hours per unitLabor hours per unit10152513522Assume that HiTech is using a volume-based costing system, and the preceding overhead costs are appliedto all products on the basis of direct labor hours. The overhead cost that would be assigned to theStandard product line is closest to:

Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

HITech Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below. Activity Material handling Cost $ 225,000 2,475,000 840,000 170,000 Cost Driver Number of parts Number of parts Material insertion Automated machinery Finishing Packaging Total Machine hours Direct labor hours Orders shipped 170.000 $3,880,000 The following information pertains to the three product lines for next year: Economy 10,000 1,000 Standard 5,000 Deluxe 2,000 Units to be produced Orders to be shipped Number of parts per unit Machine hours per unit Labor hours per unit 500 200 10 15 25 1 3 5 2 2 Assume that HiTech is using a volume-based costing system, and the preceding overhead costs are applied to all products on the basis of direct labor hours. The overhead cost that would be assigned to the Standard product line is closest to:

HITech Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below. Activity Material handling Cost $ 225,000 2,475,000 840,000 170,000 Cost Driver Number of parts Number of parts Material insertion Automated machinery Finishing Packaging Total Machine hours Direct labor hours Orders shipped 170.000 $3,880,000 The following information pertains to the three product lines for next year: Economy 10,000 1,000 Standard 5,000 Deluxe 2,000 Units to be produced Orders to be shipped Number of parts per unit Machine hours per unit Labor hours per unit 500 200 10 15 25 1 3 5 2 2 Assume that HiTech is using a volume-based costing system, and the preceding overhead costs are applied to all products on the basis of direct labor hours. The overhead cost that would be assigned to the Standard product line is closest to:

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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what is the predetermind rate?
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Activity-Based Costing CardioTrainer Equipment Company manufactures stationary bicycles and treadmills. The products are produced in the Fabrication and Assembly production departments. In addition to production activities, several other activities are required to produce the two products. These activities and their associated activity rates are as follows: Activity Activity Rate Fabrication $22 per machine hour (mh) Assembly $12 per direct labor hour (dlh) Setup $40 per setup Inspecting $18 per inspection Production scheduling $8 per production order Purchasing $5 per purchase order The activity-base usage quantities and units produced for each product were as follows: Stationary Bicycle Treadmill Machine hours 1,680 1,070 Direct labor hours 243 131 Setups 45 131 Inspections 158 94 Production orders 60 32 Purchase orders 240 98 Units produced 500 350 Use the activity rate and usage information to compute the total activity costs and the activity…
XYZ Co. manufactures three types of remote-control devices: X, Y, and Z. The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below. Activity Cost Cost Driver Material handling $225,000 Number of parts Material insertion 2,475,000 Number of parts Automated machinery 840,000 Machine hours Finishing 170,000 Direct labor hours Packaging 170,000 Orders shipped Total $3.880,000 The following information pertains to the three product lines for next year: Y Units to be produced 10,000 5,000 2,000 Orders to be shipped 1,000 500 200 Number of parts per unit 10 15 25 Machine hours per unit 1 3 Labor hours per unit 2
ABC Company manufactures three types of televisions: Model A, B and C. The company uses the activity-based costing, has identified five activities and its related cost drivers. Each activity, budgeted cost and related cost driver are as follows: (a) Materials handling, P112,500, number of parts; (b) Materials insertion, P1,237,500; number of parts; (c) Automated machinery, P420,000, machine hours; (d) Finishing, P85,000, direct labor hours; and (e) Packaging, P85,000, order shipped. The following information pertains to each product line for next year: (f) units produced (A, 5,000; B, 2,500; C, 1,000); (g) orders to be shipped (A 500, B 250, C 100); (h) number of parts per unit (A 5, B 7.50; C 12.50); (i) machine hours per unit (A 0.50; B 1.50; C 2.50) and (j) labor hours per unit (A 1; B 1, C 1). Under the activity-based costing, what is the total costs of A?
Foam Products, Incorporated, makes foam seat cushions for the automotive and aerospace industries. The company’s activity-based costing system has four activity cost pools, which are listed below along with their activity measures and activity rates: Activity Cost Pool Activity Measure Activity Rate Supporting direct labor Number of direct labor-hours $ 14 per direct labor-hour Batch processing Number of batches $ 90 per batch Order processing Number of orders $ 287 per order Customer service Number of customers $ 2,608 per customer The company just completed a single order from Interstate Trucking for 2,900 custom seat cushions. The order was produced in three batches. Each seat cushion required 0.4 direct labor-hour. The selling price was $142.30 per unit, the direct materials cost was $110 per unit, and the direct labor cost was $14.40 per unit. This was Interstate Trucking’s only order during the year. Required: Calculate the customer margin for Interstate Trucking.