Question 3Ghaz Company produces two types of sound units: Deluxe and Regular. Activity data is asfollows:Activity Usage MeasuresUnits produced per yearPrime costProduct-Costing DataDeluxe5,000RM39,000Regular50,000Total55,000RM408,000RM369,000Direct labor hoursMachines hours5,00045,00050,00010,00090,000100,000Production runsNumber of moves101512060180Activity Cost Data (Overhead Activities)ActivityCost (RM)Activity driverProduction runsSetupsMaterials handlingPower60,00030,000Number of moves50,000Machines hoursTestingTotal40,000Direct labor hours180,000Required:a) Calculate the consumption ratios for each activity.b) Choose group activity based on the consumption ratios.c) Calculate a rate for each pooled group of activities.d) Calculate unit product costs using the pool rates.

ABC costing is a method where cost is allocated based on activity. It does not uses single overhead…

Question 3 Ghaz Company produces two types of sound units: Deluxe and Regular. Activity data is as follows: Activity Usage Measures Units produced per year Prime cost Product-Costing Data Regular 50,000 Deluxe Total 5,000 55,000 RM39,000 5,000 10,000 10 RM369,000 RM408,000 Direct labor hours 45,000 50,000 100,000 15 Machines hours 90,000 Production runs 5 Number of moves 120 60 180 Activity Cost Data (Overhead Activities) Cost (RM) Activity driver Production runs Activity Setups Materials handling 60,000 30,000 Number of moves Power 50,000 Machines hours Direct labor hours Testing Total 40,000 180,000 Required: a) Calculate the consumption ratios for each activity. b) Choose group activity based on the consumption ratios. c) Calculate a rate for each pooled group of activities. d) Calculate unit product costs using the pool rates.

Question 3 Ghaz Company produces two types of sound units: Deluxe and Regular. Activity data is as follows: Activity Usage Measures Units produced per year Prime cost Product-Costing Data Regular 50,000 Deluxe Total 5,000 55,000 RM39,000 5,000 10,000 10 RM369,000 RM408,000 Direct labor hours 45,000 50,000 100,000 15 Machines hours 90,000 Production runs 5 Number of moves 120 60 180 Activity Cost Data (Overhead Activities) Cost (RM) Activity driver Production runs Activity Setups Materials handling 60,000 30,000 Number of moves Power 50,000 Machines hours Direct labor hours Testing Total 40,000 180,000 Required: a) Calculate the consumption ratios for each activity. b) Choose group activity based on the consumption ratios. c) Calculate a rate for each pooled group of activities. d) Calculate unit product costs using the pool rates.

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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Question 8 Cranston Corporation makes four products in a single facility. Data concerning these products appear below: Products A C D B $42.30 Selling price per unit $50.00 $37.60 $ 33.50 $30.70 $ 21.00 $ 19.90 Variable manufacturing cost per unit $ 20.80 Variable selling cost per unit $2.10 $1.00 $2.40 $2.70 3.30 Milling machine minutes per unit 4.10 2.60 1.30 Monthly demand in units 1,000 4,000 3,000 3,000 The milling machines are potentially the constraint in the production facility. A total of 28,200 minutes are available per month on these machines. How many minutes of milling machine time would be required to satisfy demand for all four products? 23,500 28,200 O 11,000 O 31,400
Q.4 Standard cost systems provide companies with a number of advantages, argue the statement. Following are the details of Abbass Industries for the period ended June 30, 2020. Company establish standard on its normal capacity of 120,000 units/hours in a year: Direct Material 600,000 kgs at Rs. 9 per kg Direct Labor 4 hours per unit at Rs. 6 per hour Factory overhead: Fixed cost Rs. 240,000 per year or Rs. 20,000 per month. Variable Cost Rs. 4.50 per hour. During the one month of operation, company produced 11,000 units. Direct material used: 60,500 kgs at Rs. 9.10 per kg Direct labor used:…
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LL Requlred Information The following information applies to the questions displayed below] Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 units of each product Its average cost per unit for each product at this level of activity are given below. Alpha $42 Beta $ 24 32 24 Direct materials Direct labor Variable manufacturing overhead Traceable Fixed manufacturing overhead Variable selling expenses Common fixed expenses 42. 26. 34 31. 34. 27. Total cost per unit $173 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 2 What is the company's total amount of common fixed expenses? Total common fixed expenses. ( Prev of 15 2 3 4 Next e to search TPL F4 F5
QUESTION 4 An organisation manufactures a single product. The following information with regard to the raw material needed in the production process is supplied to you: Normal delivery time: 2.5 weeksMaximum delivery time: 3.5 weeksNormal usage: 52 000 units per yearPurchase price per unit: R8.50Cost of placing an order: R18.00Interest rate: 2% per yearStoring cost per unit: R2.50 Required: Calculate the re-order point if the organisation has a policy to keep safety stock. Calculate the safety stock that should be kept by the organisation.
< Prev A company uses the following standard costs to produce a single unit of output. Direct materials Direct Manufacturing pounds at $0.70 per pound- 0.4 hour at $8.00 per hour labor $ 5.60 $ 3.20 $ 1.96 overhead 53 0.4 hour at $4.90 per hour - During the latest month, the company purchased and used 77,000 pounds of direct materials ata price of $0.90 per pound to produce 10,000 units of output Direct le month totaled $29,100 based on 3,880 direct labor hours worked. Variable manufacturing overhead costs incurred totaled $15 600 and fixed manufacturing overhee $10,000. Based on this information, the direct materials price variace for the month was: Multiple Choice $2,000 favorable $15,400 unfavorable $5,600 unfavorable $6,400 unfavorable Ne $5,600 favorable 23 of 25
Question 5.1 Stark and Company would like to evaluate one of the product lines that they sell to the defense department. Every month the Stark and Company produce an identical number of units, although the sales in units differ from month to month. Selling price Units in beginning inventory $105 110 Units produced 6,400 Units sold 6,100 Units in ending inventory Variable costs per unit: 410 Direct materials $62 Direct labour $48 Variable manufacturing overhead Variable selling and administrative Fixed costs: $3 $7 Fixed manufacturing overhead Fixed selling and administrative $64,000 $35,600 Submission Instructions: 1. Under variable costing, identify the unit product cost for the month. 2. What is the unit product cost for the month under absorption costing? 3. Prepare an income statement for the month using the contribution format and the variable costing method. 4. Prepare an income statement for the month using the absorption costing method.
Assume a company has two divisions, Division A and Division B. Division A has provided the following information regarding the one product that it manufactures and sells on the outside market: Selling price per unit (on the outside market). Variable cost per unit $ 60 $ 44 Fixed costs per unit (based on capacity) Capacity in units $ 4 20,000 Division B could use Division A's product as a component part in the manufacture of 4,000 units of its own newly-designed product. Division B has received a quote of $58 from an outside supplier for a component part that is comparable to the one that Division A makes. If the company's divisional managers are evaluated based their division's profits and Division A is currently selling 18,000 units on the outside market, what is Division A's lowest acceptable transfer price if it were to sell 4,000 units to Division B?
Exercises 4 Event Company produces a single product with the following characteristics: price per unit, $30.00; variable material cost per unit, $9.20; variable labor cost per unit, $4.40; variable overhead cost per unit, $2.20; and fixed overhead cost per unit, $3.00. Event Company's manufacturing fixed costs are $5 million, and selling, general, and administration fixed costs are $1.5 million. What dollar sales are required for Event Company to earn a target profit of $600,000? Exercises 5 The following information pertains to Torasic Company's budgeted income statement for the month of June: Sales (1,500 units at $300) $450,000 Variable cost 200,000 250,000 280,000 $(30,000) Contribution margin Fixed cost Net loss Required a) Determine the company's breakeven point in both units and dollars. b) The sales manager believes that a $25,000 increase in the monthly advertising expenses will result in a considerable increase in sales. How much of an increase in sales must result from…
Question 6 Amundsen Company makes 60,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct Materials Direct Labor Variable Manufacturing Overhead Fixed Manufacturing Overhead Variable Selling Fixed Selling Total $ 10.10 $17.40 $ 2.70 $15.00 $ 2.75 $ 3.25 $51.20 An outside supplier has offered to sell the company all of these parts it needs. If the company accepts this offer, the facilities now being used to make the part would be idle and fixed manufacturing overhead would be reduced by 80% of current cost. The variable selling costs would be reduced to 40% of current cost. Required: What is the maximum amount the company should be willing to pay an outside supplier per unit for the part?
Question 2 Belian Sdn Bhd developed the following standard unit costs at 100% of its normal production capacity, which is 50,000 units per year: RM Direct materials Direct labour Variable factory overhead Fixed factory overhead 3 15 The selling price of each unit of product is RM25. Variable commercial expenses are RM1 per unit sold, and fixed commercial expenses total RM180,000 for the period, During the year, 49.000 units were produced and 52.000 units were sold. There is no work in process, beginning or ending inventories, and finished goods inventory is maintained at standard cost which has not changed from the preceding year. For the aurrent year, there is a net unfavorable variable cost variance in the amount of RM2.000. Áll standard cost variances are charged to cost of goods sold at the end of the period. Required : a) Prepare a comprehensive income statement on the absorption costing basis. b) Prepare a comprehensive income statement on the direct costing basis co31