Refer to CASE 2 (Company B), If activity-based costing is used, what would be the activity rate for the Setups activity?cost poolNone of the amounts given a O$50 b O$25 .c O$5 d O Company B is currently applying manufacturing overhead based on budgeted direct labor hours.Budgeted direct labor hours for the year is 50,000.The company is thinking of using Activity based Costing system and has identifies four activities. Thefour activities, cost drivers, annual activity level, and expected overhead costs for each activity for theyear are listed below.Annual Cost-DriverExpected MOH ($)400,000ActivityCost DriverActivity LevelMaintenanceMachine hours50,000Materials HandlingSetupsInspectionMaterial moves8,000200,000SetupsQuality inspections6,000300,00020,000100,000Total Budgeted MOH1,000,000Annual estimates for three of the products sold by the company are as follows:Total sales ($)Direct materialsProduct X$200,000$50,000Product Y$200,000$30,000Product Z$200,000$40,000Direct labor cost$45,000$25,500$35,000Direct labor hours4,5002,5503,500Number of materials moves350250300Number of inspectionsNumber of setups35020030015080120Number of machine hours800040006000

Name: Refer to CASE 2 (Company B), If activity-based costing is used, what
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Description: Refer to CASE 2 (Company B), If activity-based costing is used, what would be the activity rate for the Setups activity?cost poolNone of the amounts given a O$50 b O$25 .c O$5 d O Company B is currently applying manufacturing overhead based on budge

Formula: Activity rate for setup cost pool = Expected Manufacturing Overhead Cost/ Expected number…

Business

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The company is thinking of using Activity based Costing system and has identifies four activities. The four activities, cost drivers, annual activity level, and expected overhead costs for each activity for the year are listed below. Annual Cost-Driver Activity Cost Driver Activity LevelExpected MOH ($) Maintenance Machine hours 50,000 400,000 Materials Handling Material moves 8,000 200,000 Setups Setups 6,000 300,000 00 .000 100 000

The company is thinking of using Activity based Costing system and has identifies four activities. The four activities, cost drivers, annual activity level, and expected overhead costs for each activity for the year are listed below. Annual Cost-Driver Activity Cost Driver Activity LevelExpected MOH ($) Maintenance Machine hours 50,000 400,000 Materials Handling Material moves 8,000 200,000 Setups Setups 6,000 300,000 00 .000 100 000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Hochberg Corporation uses an activity-based costing system with the following three activity cost pools: Activity Cost Pool Total Activity Fabrication 30,000 machine-hours Order processing 300 orders Other Not applicable The Other activity cost pool is used to accumulate costs of idle capacity and organization-sustaining costs. The company has provided the following data concerning its costs: Wages and salaries $340,000 Depreciation Occupancy Total 160,000 220,000 $720,000 The distribution of resource consumption across activity cost pools is given below: Activity Cost Pools Fabrication Order Processing Other Total Wages and salaries 30% 60% 10% 100% Depreciation 15% 50% 35% 100% Occupancy 15% 55% 30% 100% The activity rate for the Fabrication activity cost pool is: A) $5.30 per machine-hour B) $3.60 per machine-hour C) $7.20 per machine-hour D) $4.80 per machine-hour
XYZ Co. uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity-based costing system: Costs: Wages and salaries $160,000 Depreciation 320,000 Utilities 240,000 Total $ 720,000 Distribution of resource consumption: Activity Cost Pools Assembly Setting Up Other Total Wages and salaries 50% 40% 10% 100% Depreciation 10% 55% 35% 100% Utilities 15% 50% 35% 100% How much cost, in total, would be allocated in the first-stage allocation to the Assembly activity cost pool? a. $212,000 O b. $148,000 O c. $360,000 O d. $376,000 O e. None of the given answer is correct.
Gutknecht Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity-based costing system: Costs: Wages and salaries Depreciation Utilities Total Distribution of resource consumption: $ 300,000 180,000 240,000 $ 720,000 Wages and salaries Depreciation Utilities Activity Cost Pools Assembly 35% Setting Up Other Total 40% 25% 100% 5% 10% 60% 35% 100% 60% 30% 100% How much cost, in total, would be allocated in the first-stage allocation to the Other activity cost pool? O Multiple Choice $180,000 $216,000 $210,000 $138,000
A company which uses activity-based costing has two products: A and B. The annual production and sales of Product A is 12,000 units and of Product B is 10,500 units. There are three activity cost pools, with total cost and total activity as follows: Total Activity Product Product A Activity Cost Pool Total Cost Total Activity 1 Activity 2 Activity 3 52-54 $25,420 130 490 620 $38,400 $122,670 890 310 1,200 820 3,410 4,230 The activity-based costing cost per unit of Product A is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice $10.79 $1.60 $4.80 $3.10
Silven Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity $138,000 Number of setups 10,200 Number of orders 92,400 Machine hours 18,480 Receiving hours phones with the following expected activity demands: Setting up equipment Ordering materials Machining Receiving Silven produces two models of cell Model X 5,000 80 200 6,600 385 Units completed Number of setups Number of orders Machine hours Receiving hours Required: Model Y 10,000 40 400 4,950 770 120 600 11,550 1,155
Data concerning three of Kilmon Corporation’s activity cost pools appear below: Activity Cost Pools Estimated Overhead Cost Expected Activity Assembling products $ 65,540 4,520 assembly hours Designing products $ 578,112 3,011 product design hours Setting up batches $ 41,820 820 batch set-ups Required: Compute the activity rates for each of the three cost pools. (Round your answers to 2 decimal places.) Activities Activity rate Assembly products Designing products Setting up batches
Merlin Company provides the following ABC costing information: Activities Total Costs Activity-cost drivers Account inquiry hours $200,000 10,000 hours Account billing lines $140,000 4,000,000 lines Account verification accounts $75,000 40,000 accounts Correspondence letters $25,000 4,000 letters Total costs $440,000 The above activities are used by Departments A and B as follows: Department A Department B Account inquiry hours 2,000 hours 4,000 hours Account billing lines 400,000 lines 200,000 lines Account verification accounts 10,000 accounts 8,000 accounts Correspondence letters 1,000 letters 1,600 letters Required: a. How much of the correspondence costs will be assigned to Department B? b. How much of the total costs will be assigned to Department A?
Saktanmokobaybeh Company uses standard costing for direct materials and direct labor. The following monthly cost functions were developed for manufacturing overhead items: Budgeted Overhead Item Cost Function: Indirect materials P 1.00 per DLH Indirect labor 1.25 per DLH Utilities 0.50 per DLH Insurance 50,000 Depreciation 400,000 The cost functions were determined using observations from 20,000 to 30,000 direct labor hours. The company expects to operate at 25,000 direct labor hours per month. The theoretical capacity per month of the company is 30,000 units. Each unit requires 2 direct labor hours. The Company applies overhead using direct labor hours. Actual data for this month are as follows: Variable overhead costs P 87,000 Fixed overhead costs 423,000 Direct labor hours 26,000 P
XYZ has provided the following data from its activity-based costing system: Activity Cost Pool Total Cost Total Activity Assembly $ 228,060 18,000 machine-hours Processing orders $ 34,068 1,600 orders Inspection $ 125,560 1,720 inspection hours The company makes 420 units of product YBY a year, requiring a total of 460 machine-hours, 80 orders, and 10 inspection hours per year. The product's direct materials cost is $48.96 per unit and its direct labor cost is $25.36 per unit. According to the activity-based costing system, the average cost of product YBY is closest to: O a. $94.26 per unit O b. None of the given answer is correct. Oc $94.00 per unit O d. $95.77 per unit O e $93.99 per unit CLEAR MY CHOICE
Sultan Company uses an activity-based costing system. At the beginning of the year, the company made the following estimates of cost and activity for its five activity cost pools: Activity Cost Pool Activity Measure Expected Overhead Cost Expected Activity Labor-related Direct labor-hours $ 184,800 30,800 DLHs Purchase orders Number of orders $ 6,900 230 orders Parts management Number of part types $ 81,120 104 part types Board etching Number of boards $ 45,000 1,800 boards General factory Machine-hours $ 150,300 16,700 MHs Required: 1. Compute the activity rate for each of the activity cost pools. 2. The expected activity for the year was distributed among the company’s four products as follows: Activity Cost Pool Expected Activity Product A Product B Product C Product D Labor-related (DLHs) 7,000 14,300 4,400 5,100 Purchase orders (orders) 58 26 46 100 Parts management (part types) 30 18 37 19 Board etching (boards) 500 720 580 0 General factory…
XYZ has provided the following data from its activity-based costing system: Activity Cost Pool Total Cost Total Activity Assembly $228,060 18,000 machine-hours Processing orders $ 34,068 1,600 orders Inspection $125,560 1,700 inspection hours The company makes 420 units of product YBY a year, requiring a total of 460 machine-hours, 80 orders, and 20 inspection-hours per year. The product's direct materials cost is $48.96 per unit and its direct labor cost is $25.36 per unit. According to the activity-based costing system, the average cost of product YBY is closest to: O a. $93.99 per unit O b. None of the given answer is correct. O. $95.77 per unit O d. $94.00 per unit O e. $94.26 per unit CLEAR MY CHOICE MacBook Air 20 F3 F1 $ % & # 5 6. 7 8 1 2 3 4 T. Y Q W E と K F G تثبيت A (( S V alt الأوامر C. I R
A company manufacturing two products furnishers the following data for a year: Product Annual Total Total number Total Output (units) of purchase orders machine number of hours set ups A 750 1200 85 15 B 450 800 115 10 1200 2000 200 25 The annual overheads are as under: Volume related activity costs RO 55000 Set up related costs RO 120000 Purchase related costs RO 85000 Total RO 260000 You are required to calculate the cost per unit of each product A and B based on: a. Traditional method of charging overheads b. Activity based costing method