Wright Ltd uses an Activity-based Costing (ABC) system to manufacture tractor metal parts. The following budget            information relates to Wright Ltd for next year:     Activity Activity Cost pool (£) Activity Cost driver Annual number of activity cost drivers Operating machinery 660,000 Machine hours 110,000 Maintaining machinery 80,000 Maintenance hour 1,600 Setting-up machinery 256,000 Machinery set-up 8,000 Purchasing materials 59,850 Purchase order 450 Controlling quality 104,500 Quality inspection 5,500 Total 1,160,350       An order from a customer for 80,000 units of parts caused 14,500 hours of machining, 22 maintenance hours, 20 machinery set-ups, 35 purchase orders, and 12 quality inspections. The order used £50,000 of materials and £65,000 of direct labour.   The cost driver rate per activity is?     a.   Operating machinery Maintaining machinery Setting-up machinery Purchasing materials Controlling quality c) 6 50 18 50 18   b.   Operating machinery Maintaining machinery Setting-up machinery Purchasing materials Controlling quality d) 6 50 32 133 19   c.     Operating machinery Maintaining machinery Setting-up machinery Purchasing materials Controlling quality a) 8 30 1 13 15   d.   Operating machinery Maintaining machinery Setting-up machinery Purchasing materials Controlling quality b) 7 40 11 80 16

Mike. Inc has two products A and B. The budgeted fixed manufacturing overhead is $10,000. The departmentis expected to work in full capacity. It plans to use cost-based pricing by using the absorption method. Assumethe firm can produce and sell 1,000 units Product A and 1,000 units Product B.                                                                               Product A   Product BDirect Materials                                                                 $3           $2Direct Labor                                                                       $1           $3Variable Manufacturing Overhead                                    $2            $1Budgeted labor hours used for each unit product                1              4Budgeted machine hours used for each unit product          3              1Sale Demand                                                                1,000      1,000                                                                   Product A…

compute the budgeted factory overhead rate (i.e., the $ rate per activity base hour, etc.) for department y

Hamid Ltd produces two products – shoes and belts. At present the company uses absorption costing, based on a labour hours rate, to establish the production overhead costs. The budgeted information for Period 4 is shown below. Product Shoes Belts Production in units 6000 5000 Machine hours per unit 5 hrs 6 hours Labour Hour per unit 3 hours 7 hours   The overhead and cost driver information for Period 4 is shown below. Activity Cost in (£) Product Inspection 46,200 Machine Set-up 21,000 Machine maintenance 20,800 Handling and Packaging 26,400   Additional information Product inspection – one in every ten products is inspected. Machine set-up – the company uses a single machine to produce both products. For period 4, 300 setups will be made that will be shared equally between both the products. Machine maintenance – this is based on a predetermined number of machine hours. Product handling and packaging – each product…

Mike. Inc has two products A and B. The budgeted fixed manufacturing overhead is $10,000. The departmentis expected to work in full capacity. It plans to use cost-based pricing by using the absorption method. Assumethe firm can produce and sell 1,000 units Product A and 1,000 units Product B.                                                                         Product A   Product BDirect Materials                                                           $3           $2Direct Labor                                                                 $1           $3Variable Manufacturing Overhead                              $2            $1Budgeted labor hours used for each unit product       1              4Budgeted machine hours used for each unit product   3              1Sale Demand                                                           1,000      1,000                                                                      Product A      Product BRequired Investment…

Caro Manufacturing has two production departments, Machining and Assembly, and two service departments, Maintenance and Cafeteria. Direct costs for each department and the proportion of service costs used by the various departments for the month of August follow:       Proportion of Services Used by Department Direct Costs Maintenance Cafeteria Machining Assembly Machining $180,000         Assembly 65,000         Maintenance 35,000           —         0.2           0.5         0.3 Cafeteria 30,000          0.8         —           0.1         0.1   Caro estimates that the variable costs in the Maintenance Department total $11,000, and in the Cafeteria variable costs total $18,000. Avoidable fixed costs in the Maintenance Department are $10,000.   Required: If Caro outsources the Maintenance Department, what is the maximum it can pay an outside vendor without increasing total costs? (Do not round intermediate calculations.)   Maximum Amount:

Tasman Products has a Maintenance Department that services equipment in the company's Forming Department and Assembly Department. The cost of this servicing is charged to the operating departments based on machine-hours. Data for the Maintenance Department follow: Variable costs for lubricants Fixed costs for salaries and other Budget $ 261,000* Actual $ 215,000 $ 333,300 $ 231,500 *Budgeted at $18 per machine-hour. Data for the Forming and Assembly Departments follow: Percentage of Peak- Forming Department Assembly Department Total Machine-Hours Period Capacity Required Budget Actual 74% 9,700 11,700 26% 100% 4,800 3,800 14,500 15,500 The amount of fixed costs in the Maintenance Department is determined by peak-period requirements. Required: 1. How much Maintenance Department cost should be charged to the Forming Department and to the Assembly Department? 2. How much, if any, of the Maintenance Department's actual costs should be treated as a spending variance and not charged to the…

Schoening Corporation is a shipping container refurbishment company that measures its output by the number of containers refurbished. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for January. Revenue Employee salaries and wages Refurbishing materials Other expenses Fixed Element per Month $ 50,600 $41,200 Variable Element per Actual Total for Container January Refurbished $4,100 $ 1.100 $ 700 $ 158,600 $92,700 $ 27,000 $ 40,800 When the company prepared its planning budget at the beginning of January, it assumed that 40 containers would have been refurbished. However, 38 containers were actually refurbished during January. The activity variance for "Refurbishing materials" for January would have been closest to: $1,000 F $1,400 F $1,000 U $1,400 U

Expo manufacturing has two production departments and two support departments. The number of employees for each department is as follows: $35,378 O $28,940 Human Resources Accounting Machining Producing Assembly Producing Human Resources shows a budget of $21,000 and accounting, $98,000, for the coming year. Support department costs are allocated on the basis of the number of employees. How much in total support costs would be allocated to assembly, using the step method? The Accounting department is allocated first. $119,000 $34,867 5 10 520 220

Tasman Products, Limited, of Australia has a Maintenance Department that services the equipment in the company’s Forming Department and Assembly Department. The cost of this servicing is charged to the operating departments on the basis of machine-hours. Cost and other data relating to the Maintenance Department and to the other two departments for the most recent year are presented below.   Data for the Maintenance Department follow:     Budget Actual Variable costs for lubricants $ 355,200* $ 455,760 Fixed costs for salaries and other $ 216,000 $ 232,600 *Budgeted at $24 per machine-hour.   Data for the Forming and Assembly Departments follow:     Percentage of Peak-Period Capacity Required Machine-Hours Budget Actual Forming Department 63% 9,800 11,800 Assembly Department 37% 5,000 4,000 Total 100% 14,800 15,800   The level of fixed costs in the Maintenance Department is determined by peak-period requirements.   Required: 1. How much Maintenance…