FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- Custom's has three cost pools and an associated cost driver to allocate the costs to the product. The cost pools, cost driver, estimated overhead, and estimated activity for the cost pool are: Cost Pool Material Machining Inspection • Material cost pool . Material requisitions Machine hours Number of inspections • Machining cost pool Custom's data Cost Driver Inspection cost pool Estimated Activity per Driver 14,000 186,400 10,000 Estimated Overhead What is the predetermined overhead rate for each activity? Round to the nearest penny, two decimal places. $52,500 363,500 75,000arrow_forwardAshvinnarrow_forwardXYZ Ltd. is a manufacturing company that follows the cost allocation approach for overhead allocation. The company uses three cost pools for allocating overhead costs: Material Handling, Machine Maintenance, and Factory Utilities. Each cost pool has its own cost driver. For the current accounting period, the company incurred the following costs and activity levels: Material Handling Costs: $150,000 Cost Driver: Number of Material Orders - 2,500 orders Machine Maintenance Costs: $250,000 Cost Driver: Machine Hours - 10,000 hours Factory Utilities Costs: $200,000 Cost Driver: Direct Labor Hours - 5,000 hours Calculate the overhead allocation rate for each cost pool based on the given information. A) Material Handling: $60 per order, Machine Maintenance: $25 per hour, Factory Utilities: $40 per direct labor hour. B) Material Handling: $30 per order, Machine Maintenance: $25 per hour, Factory Utilities: $40 per direct labor hour. C) Material Handling: $60 per order, Machine…arrow_forward
- Larner Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Labor-related Machine-related Machine setups Production orders Shipments General factory $ 120.00 per shipment $ 10.00 per direct labor-hour Cost and activity data have been supplied for the following products: Direct labor-hours Machine-hours Machine setups Production orders Shipments Activity Rates $ 6.00 per direct labor-hour $ 10.00 per machine-hour Direct materials cost per unit Direct labor cost per unit Number of units produced per year $50.00 per setup $ 100.00 per order Unit product cost J78 Total Expected Activity 378 1,400 2,400 8 98 6 B52 30 30 1 1 1 Required: Compute the unit product cost of each product listed above. (Do not round intermediate calculations. Round your answers to 2 decimal places.) B52 J78 $ 4.50 $ 5.00 2,000 B52 $26.00 $6.00 100arrow_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
- 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.arrow_forwardLarner Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Labor-related Machine-related Machine setups Production orders Shipments $ 140.00 per shipment General factory $ 7.00 per direct labor-hour Cost and activity data have been supplied for the following products: Direct labor-hours Machine-hours Machine setups Production orders Shipments Activity Rates $7.00 per direct labor-hour Direct materials cost per unit Direct labor cost per unit Number of units produced per year $7.00 per machine-hour $30.00 per setup $200.00 per order Unit product cost Total Expected Activity J78 378 1,200 2,200 6 5 7 B52 30 50 1 1 1 Required: Compute the unit product cost of each product listed above. (Do not round intermediate calculations. Round your answers to 2 decimal places.) B52 378 $5.50 $ 4.75 4,000 B52 $32.00 $9.00 100arrow_forwardSavitaarrow_forward
- Maxey & Sons manufactures two types of storage cabinets-Type A and Type B—and applies manufacturing overhead to all units at the rate of $140 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 Туре А 160 56,000 200 Туре А 28,000 $38 43 Required 1 Required 2 Required 3 Туре В Unit manufacturing costs 120 78,750 150 The firm's total overhead of $18,865,000 is subdivided as follows: manufacturing setups, $4,116,000; machine processing, $11,319,000 and product shipping, $3,430,000. Required: 1. Compute…arrow_forwardFoam Products, Inc., 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 $ 12 per direct labor-hour Batch processing Number of batches $ 94 per batch Order processing Number of orders $ 278 per order Customer service Number of customers $ 2,633 per customer The company just completed a single order from Interstate Trucking for 2,300 custom seat cushions. The order was produced in two batches. Each seat cushion required 0.7 direct labor-hours. The selling price was $141.10 per unit, the direct materials cost was $108 per unit, and the direct labor cost was $14.00 per unit. This was Interstate Trucking’s only order during the year. Required: Prepare a report showing the customer margin…arrow_forwardKlumper Corporation Is a diversified manufacturer of Industrial goods. The company's activity-based costing system contalns the following stx activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Machine processing Machine setups Production orders Activity Rates $8 per direct labor-hour $ 3 per machine-hour $ 35 per setup $ 160 per order $ 120 per shipment $ 875 per product Shipments Product sustaining Activity data have been supplied for the following two products: Total Expected Activity K425 M67 Number of units produced per year 2,000 50 200 Direct labor-hours 1,825 3,480 13 Machine-hours 40 Machine setups Production orders Shipments Product sustaining 2 13 2 26 2 Requlred: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system? Activity Cost Pool K425 M67 Supporting direct labor Machine processing Machine setups Production orders Shipments Product sustaining Total overhead cost 이 $arrow_forward
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