Roll Board Inc. manufactures several models of high-quality skateboards. The company's ABC system has four activity cost pools, which are listed below along with their activity measures and activity rates: Activity Cost Pool Supporting direct labour Batch processing Order processing Customer service Activity Measure Number of direct labour-hours Number of batches Number of orders Number of customers Activity Rate $ 2 per direct labour-hour $98 per batch $81 per order $32 per customer The company just completed a single order from SkateCo for 1,750 entry-level skateboards. The order was produced in 32 batches. Each skateboard required 0.4 direct labour-hours. The selling price was $135 per skateboard, the direct materials cost was $68.30 per skateboard, and the direct labour cost was $18.50 per direct labour-hour. This was the only order from SkateCo for the year. Required: Prepare a report showing the customer margin on sales to SkateCo for the year. Sales Costs: Direct materials Direct labour Supporting direct labour Batch processing Order processing Customer service overhead 0 Customer margin $ 0

Roll Board Inc. manufactures several models of high-quality skateboards. The company's ABC system has four activity cost pools, which are listed below along with their activity measures and activity rates: Activity Cost Pool Supporting direct labour Batch processing Order processing Customer service Activity Measure Number of direct labour-hours Number of batches Number of orders Number of customers Activity Rate $ 2 per direct labour-hour $98 per batch $81 per order $32 per customer The company just completed a single order from SkateCo for 1,750 entry-level skateboards. The order was produced in 32 batches. Each skateboard required 0.4 direct labour-hours. The selling price was $135 per skateboard, the direct materials cost was $68.30 per skateboard, and the direct labour cost was $18.50 per direct labour-hour. This was the only order from SkateCo for the year. Required: Prepare a report showing the customer margin on sales to SkateCo for the year. Sales Costs: Direct materials Direct labour Supporting direct labour Batch processing Order processing Customer service overhead 0 Customer margin $ 0

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 8CE: Electan Company produces two types of printers. The company uses ABC, and all activity drivers are...

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Rex Industries has identified three different activities as cost drivers: machine setups, machine hours, and inspections. The overhead and estimated usage are: Compute the overhead rate for each activity.
Electan Company produces two types of printers. The company uses ABC, and all activity drivers are duration drivers. Electan Company is considering using DBC and has gathered the following data to help with its decision. A. Activities with duration drivers: B. Activities with consumption ratios and costs: C. Products with cycle time and practical capacity: Required: 1. Using cycle time and practical capacity for each product, calculate the total time for all primary activities. Comment on the relationship to ABC. 2. Calculate the overhead rate that DBC uses to assign costs. Comment on the relationship to a unit-based plantwide overhead rate. 3. Use the overhead rate calculated in Requirement 2 to calculate (a) the overhead cost per unit for each product, and (b) the total overhead assigned to each product. How does this compare to the ABC assignments shown in Part B of the Information set? 4. What if the units actually produced were 10,000 for Printer A and 18,000 for Printer B. Using DBC, calculate the cost of unused capacity.
Roll Board Inc. manufactures several models of high-quality skateboards. The company's ABC system has four activity cost pools, which are listed below along with their activity measures and activity rates: Activity cost Pool Supporting direct labour Batch processing Or der processing Customer service Activity Rate $ 8 per direct labour-hour $44 per batch $87 per order $92 per customer Activity Measure Number of direct labour-hours Number of batches Number of orders Number of customers The company Just completed a single order from SkateCofor 1,300 entry-level skateboards. The order was produced In 28 batches. Each skateboard requlred 1.7 direct labour-hours. The selling price was $185 per skateboard, the direct materlals cost was $68.70 per skateboard, and the direct labour cost was $17.60 per direct labour-hour. This was the only order from SkateCofor the year. Required: Prepare a report showing the customer margin on sales to SkateCofor the year. Sales Costs: Direct materials Direct…
Scholfield Enterprises makes a variety of products that it sells to other businesses. The company's activity-based costing system has four activity cost pools for assigning costs to products and customers. Details concerning that activity-based costing system are listed below: Activity Cost Pool Supporting assembly Processing batches. Processing orders. Serving customers. Activity Measure Direct labor-hours (DLHS) Number of batches. Number of orders Number of customers Activity Rate $ 6.55 per DLH $ 138.20 per batch $ 52.60 per order $ 1,191.00 per customer The cost of serving customers, $1,191.00 per customer, is the cost of serving a customer for one year. Latif Corporation buys only one of the company's products which Scholfield Enterprises sells for $15.60per unit. Last year Latif Corporation ordered a total of 1,100units of this product in 2orders. To fill the orders, 7batches were required. The direct materials cost is $7.85per unit and the direct labor cost is $1.90per unit.…
Forner, Inc., manufactures and sells two products: Product Z1 and Product Z8. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity Estimated Expected Activity Activity Overhead Activity Cost Pools Labor-related Measures Cost Product Z1 Product Z8 Total DLHS $112,190 40,440 609,770 600 2,000 Machine setups Оrder size 2,600 1,200 6, 200 setups 500 700 MHs 3,000 3,200 $762,400 The activity rate for the Machine Setups activity cost pool under activity-based costing is closest to: Multiple Cholce $203.26 per setup $190.55 per setup $122.97 per setup 92 F AQI 61 nere to search DELL
Delauder Enterprises makes a variety of products that it sells to other businesses. The company's activity-based costing system has four activity cost pools for assigning costs to products and customers. Details concerning that activity-based costing system are listed below: Activity Cost Pool Supporting assembly Processing batches. Processing orders. Serving customers Number of units purchased Number of batches. Activity Measure. Direct labor-hours (DLHS) Number of batches. Number of orders. Number of customers The cost of serving customers, $1,608.00 per customer, is the cost of serving a customer for one year. Grennon Corporation buys only one of the company's products. The details of last year's purchases of this product are listed below: Number of orders Direct labor-hour requirement. Selling price Direct materials cost Direct labor cost 1,500 units 5 batches 2 orders Activity Rate $ 3.45 per DLH $ 193.30 per batch $83.05 per order. $ 1,608.00 per customer 0.25 DLHS per unit $…
Roll Board Inc. manufactures several models of high-quality skateboards. The company's ABC system has four activity cost pools, which are listed below along with their activity measures and activity rates: Activity Cost Pool Supporting direct labour Batch processing Order processing Customer service Activity Measure Number of direct labour-hours Number of batches Number of orders Number of customers Activity Rate $ 2 per direct labour-hour $98 per batch $81 per order $32 per customer The company just completed a single order from SkateCo for 1,750 entry-level skateboards. The order was produced in 32 batches. Each skateboard required 0.4 direct labour-hours. The selling price was $135 per skateboard, the direct materials cost was $68.30 per skateboard, and the direct labour cost was $18.50 per direct labour-hour. This was the only order from SkateCo for the year. Required: Prepare a report showing the customer margin on sales to SkateCo for the year. Sales Costs: Direct materials…
Roll Board Inc. manufactures several models of high-quality skateboards. The company’s ABC 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 labour Number of direct labour-hours $ 9 per direct labour-hour Batch processing Number of batches $ 43 per batch Order processing Number of orders $ 88 per order Customer service Number of customers $ 102 per customer The company just completed a single order from SkateCo for 1,350 entry-level skateboards. The order was produced in 28 batches. Each skateboard required 1.4 direct labour-hours. The selling price was $125 per skateboard, the direct materials cost was $68.80 per skateboard, and the direct labour cost was $17.70 per direct labour-hour. This was the only order from SkateCo for the year. Required: Prepare a report showing the customer margin on sales to SkateCo for the year.
Forner, Inc., manufactures and sells two products: Product Z1 and Product Z8. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Expected Activity Activity Cost Pools Activity Measures Overhead Cost Product Z1 Product Z8 Total Labor-related DLHs $ 112,190 600 2,000 2,600 Machine setups setups 40,440 500 700 1,200 Order size MHs 609,770 3,000 3,200 6,200 $ 762,400 The activity rate for the Order Size activity cost pool under activity-based costing is closest to: Multiple Choice $56.10 per MH $293.23 per MH $76.24 per MH $98.35 per MH
Foam 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 $ 5.55 per direct labor-hour Batch processing Number of batches $ 107.00 per batch Order processing Number of orders $ 275.00 per order Customer service Number of customers $ 2,463.00 per customer The company just completed a single order from Interstate Trucking for 1,000 custom seat cushions. The order was produced in two batches. Each seat cushion required 0.25 direct labor-hours. The selling price was $20 per unit, the direct materials cost was $8.50 per unit, and the direct labor cost was $6.00 per unit. This was Interstate Trucking’s only order during the year. Required: Calculate the customer margin on sales to…
Desjariais Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products. Activity Coat Pools Setting up batches Assembling products Processing customer orders. Data concerning two products appear below: Number of batches Number of assembly hours. Number of customer orders a. Product S96U b. Product QO6F Overhead cost Activity Rate $ 123.70 per batch $ 7.32 per assembly hour $ 59.76 per customer order Product S960 36 192 23 Required: a. How much overhead cost would be assigned to Product S96U using the company's activity-based costing system? b. How much overhead cost would be assigned to Product Q06F using the company's activity-based costing system? Note: Do not round intermediate calculations. Round your final answers to 2 decimal places. Product 006F 45 870 42
Weirick, Incorporated, manufactures and sells two products: Product T8 and Product P4. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Activity Cost Pools Activity Measures Estimated Overhead Cost Expected Activity Product T8 Product P4 Total Labor-related DLHs $ 134,500 9,600 4,800 14,400 Production orders orders 63,430 1,300 200 1,500 Order size MHs 992,100 3,100 3,900 7,000 $ 1,190,030 The total overhead applied to Product P4 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice $928,670 $552,747 $606,037 $1,055,530