FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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XYZ Motors Corporation has identified activity centers to which
Activity Center - Utilities:
Cost - P600,000
Cost Driver - 30,000 machine hours
Activity Center - Scheduling sand setups
Cost - P546,000
Cost Driver - 390 setups
Activity Center - Material handling
Cost - P1,280,000
Cost Driver - 800,000 kilos of materials
The company's products and other operating statistics are as follows:
Product A:
Direct costs - P40,000
Machine hours - 15,000
Number of setups - 65
Kilos of material - 250,000
Number of units produced - 20,000
Direct labor hours - 16,000
Product B:
Direct costs - P40,000
Machine hours - 5,000
Number of setups - 190
Kilos of material - 150,000
Number of units produced - 10,000
Direct labor hours - 9,000
Product C:
Direct costs - P45,000
Machine hours - 10,000
Number of setups - 135
Kilos of material - 400,000
Number of units produced - 30,000
Direct labor hours - 25,000
The company sets selling prices at cost plus a 20% markup.
A. What is the unit cost of Product A using the appropriate cost drivers?
B. Using the above data, assuming that the company before installing ABC system, used a traditional costing system that allocated manufacturing overhead to products using direct labor hours, what is the unit selling price of Product B?
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- sarrow_forwardActivity-Based Costing Steampunk Corporation has the following predicted indirect costs and cost drivers for 2019 for the given activity cost pools: FabricationDepartment FinishingDepartment Cost Driver Maintenance $ 36,000 18,000 Machine hours Materials handling 54,000 27,000 Material moves Machine 126,000 9,000 Machine setups Inspections - 45,000 Inspection hours Total $ 216,000 $ 99,000 The following activity predictions were also made for the year: FabricationDepartment FinishingDepartment Machine hours 5,000 2,500 Material moves 1,500 750 Machine setups 350 25 Inspection hours - 500 It is assumed that the cost per unit of activity for a given activity does not vary between departments. Steampunk's president, Abner Punk, is trying to evaluate the company's product mix strategy regarding two of its product models, SW100 and SG150. The company has been using a company wide overhead rate based on machine hours but is considering…arrow_forwardSilven 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 1,155arrow_forward
- Hickory Company manufactures two products—13,000 units of Product Y and 5,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all $829,500 of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z: Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity Machining Machine-hours $ 246,000 12,000 MHs Machine setups Number of setups $ 137,500 250 setups Product design Number of products $ 89,000 2 products General factory Direct labor-hours $ 357,000 14,400 DLHs Activity Measure Product Y Product Z Machine-hours 7,500 4,500 Number of setups 40 210 Number of products 1 1 Direct labor-hours 8,500 5,900 Foundational 7-12 (Algo) 12. Using the ABC system, what percentage of the Machining costs is assigned to Product…arrow_forwardGable Company uses three activity pools. Each pool has a cost driver. Information for Gable Company follows: Total Cost of Pool $ 454,960 100,000 72,720 Estimated Cost Driver 96,800 10,000 505 Activity Pools Machining Designing costs Setup costs Suppose that Gable Company manufactures three products, A, B, and C. Information about these products follows: Product A Product B 38,000 4,000 40 Number of machine hours Number of design hours Number of batches Cost Driver Number of machine hours Number of design hours Number of batches Product A Product B Product C Total Overhead Assigned 48,000 2,200 170 Required: Using activity rates, determine the amount of overhead assigned to each product. Note: Do not round intermediate calculations. Round the final answer to nearest whole number. Product C 10,800 3,800 295arrow_forwardCarla Vista Industries has three activity cost pools and two products. It expects to produce 2,700 units of Product SZ09 and 1,400 of Product NZ16. Having identified its activity cost pools and the cost drivers for each pool, Carla Vista accumulated the following data relative to those activity cost pools and cost drivers. question: Assign the overhead cost to the two products: SZ09$? and NZ16$?arrow_forward
- Pharoah Co. has identified an activity cost pool to which it has allocated estimated overhead of $10212000. It has determined the expected use of cost drivers for that activity to be 851000 inspections. Widgets require 217000 inspections, Gadgets 167000 inspections, and Targets 467000 inspections. How much is the overhead assigned to each product? O Widgets $3404000, Gadgets $3404000, Targets $3404000 O Widgets $217000, Gadgets $167000, Targets $467000 O Widgets $3404000, Gadgets $1702000, Targets $5106000 O Widgets $2604000, Gadgets $2004000, Targets $5604000arrow_forwardComputing departmental overhead allocation rates The Oakman Company (see Short Exercise S19-1) has refined its allocation system by separating manufacturing overhead costs into two cost pools—one for each department. The estimated costs for the Mixing Department, $510,000, will be allocated based on direct labor hours, and the estimated direct labor hours for the year are 170,000. The estimated costs for the Packaging Department, $300,000, will be allocated based on machine-hours, and the estimated machine hours for the year are 40,000. In October, the company incurred 38,000 direct labor hours in the Mixing Department and 10,000 machine hours in the Packaging Department. Requirements Compute the predetermined overhead allocation rates. Round to two decimal places. Determine the total amount of overhead allocated in October.arrow_forwardA 162.arrow_forward
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