Question 2 Moon produces tow products the A and B. The direct costs of the two products are given below: Direct materials Direct Labour A Materials handling Production set up costs £4.00 £3.00 The budgeted production for 80,000 units of A and 30,000 units of B. The two main activities identified for the simple production process are material handling and production set ups. Product A requires large production runs and large transfers of materials from stores. However, product B is a more complex product with a number of different types of materials required and shorter and more frequent production runs. The use of these activities for each product is The budgeted fixed overheads of Caplan are £600,000 and they are made up as follows: £200,000 £400,000 £600,000 A Number Material Handling requisitions 100 Number of Production Set Ups 50 Required: B £4.20 £2.20 B 400 200 Total 500 250 Calculate the unit cost of each product using the costing method of Activity Based Costing.

Question 2 Moon produces tow products the A and B. The direct costs of the two products are given below: Direct materials Direct Labour A Materials handling Production set up costs £4.00 £3.00 The budgeted production for 80,000 units of A and 30,000 units of B. The two main activities identified for the simple production process are material handling and production set ups. Product A requires large production runs and large transfers of materials from stores. However, product B is a more complex product with a number of different types of materials required and shorter and more frequent production runs. The use of these activities for each product is The budgeted fixed overheads of Caplan are £600,000 and they are made up as follows: £200,000 £400,000 £600,000 A Number Material Handling requisitions 100 Number of Production Set Ups 50 Required: B £4.20 £2.20 B 400 200 Total 500 250 Calculate the unit cost of each product using the costing method of Activity Based Costing.

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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Table 7.5 A company makes four products that have the following characteristics: Product A sells for $50 but needs $10 of materials to produce; Product B sells for $75 but needs $30 of materials to produce; Product C sells for $100 but needs $50 of materials to produce; Product D sells for $150 but needs $75 of materials to produce. The processing requirements for each product on each of the four machines are shown in the table. product (process time/unit) A B C D Work center W 6 3 12 X 9 10 4 8 4 y 12 9 Z 10 7 11 Work centers W, X, Y, and Z are available for 40 hours per week and have no setup time when switching between products. Market demand for each product is 80 units per week. In the questions that follow, the full cost method refers to maximizing the gross margin or product margin per unit for each product, the contribution margin approach refers to maximizing the contribution margin per unit for each product, and the bottleneck method refers to maximizing the throughput…
The following standard costs pertain to a component part manufactured by Ashby Company:Direct materials$2Direct labour5Manufacturing overhead 20 Standard cost per unit $27The company can purchase the part from an outside supplier for $25 per unit. The manufacturing overhead is 60% fixed and this fixed portion would not be affected by this decision. Assume that direct labour is an avoidable cost in this decision. What is the relevant amount of the standard cost per unit to be considered in a decision of whether to make the part internally or buy it from the external supplier?
II. The Sanka Company manufactures a variety of expensive furniture. Its job costing system was designed using an activity based approach. There are two direct cost categories (direct materials and direct labor) and three indirect cost pools. These three cost pools represent three activity areas at the plant. Activity Area Materials Handling Cutting Assembly Cost Driver Budgeted OH P200,000 P2,160,000 P2,000,000 Pool Rate Parts P2.50 Parts P25.00 DLH P250.00 Two styles of cabinets were produced in May, De Luxe and Standard. Their quantities, direct material costs and other data for May 2021 are as follows: # of parts 100,000 3,500 Production DM Cost DL Hours Standard 5,000 7,500 P3,500,000 P400,000 De Luxe 100 1,500 The direct labor rate is P50 per hour. Assume no beginning inventory and ending inventory is 20% of total production. 1. Determine the total manufacturing cost for Standard using ABC Costing. 2. Determine the total manufacturing cost for Deluxe using Traditional Costing,…
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Q1: Consider a simple three-step manufacturing process as illustrated in the given figure. Assuming that demand is 1,000 units, what is the required input to meet demand? Assume that the scrap cost is $5 at process 1, $10 at process 2, and $15 at process 3. The defective rates are 3%, 5%, and 7%, respectively. Compute the total scrap cost for the given system. 1 d₂ = 3% 2 d₂ = 5% 3 d₂ = 7%
question 2
Volume-based method of overhead cost allocation Required: -Allocate costs to products on the basis of labour hours -Over head cost rate = - Please write the formula or equation
FUT manufactures two products.. Both products require manufacturing operations in two departments: Product 1 2 Profit/Unit $25 $20 Labour Hours Dept. A 6 8 Labour Hours Dept. B 12 10 For the coming production period, FUT has available 900 hours of labor that can be allocated to either of the two departments. Find the production plan and labor allocation (hours assigned in each department) that will maximize profit. (Use Excel Solver)
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