Financial & Managerial Accounting
Financial & Managerial Accounting
18th Edition
ISBN: 9781259692406
Author: Jan Williams, Susan Haka, Mark S Bettner, Joseph V Carcello
Publisher: McGraw-Hill Education
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Chapter 17, Problem 10BE

a.

To determine

Allocate the utilities cost pool to each product line assuming by assuming deluxe model used as 6,400 machine- hours and the basic model used 1,600 machine-hours.

a.

Expert Solution
Check Mark

Answer to Problem 10BE

Calculate the utilities cost pool for each product line:

ParticularsUtilities Cost Allocated
Deluxe ($180,000×80%(1))$144,000
Basic ($180,000×20%(2))$36,000
Total  cost allocated$180,000

(Table 1)

Explanation of Solution

Calculate the utilities cost pool to each product line assuming by assuming deluxe model used as 6,400 machine- hours and the basic model used 1,600 machine-hours.

ParticularsMachine hoursPercent to total
Deluxe6,400
  1. (1) 80%
Basic1,600
  1. (2) 20%
Total 8,000100%

(Table 2)

Working note:

Calculate the percent of deluxe model machine hours:

Percent of deluex model machine hours = Machine hours of deluxe modelTotal machine hours×100=6,4008,000×100=80% (1)

Calculate the percent basic model machine hours:

Percent of basic model machine hours = Machine hours of basic modelTotal machine hours×100=1,6008,000×100=20% (2)

b.

To determine

Allocate the maintenance pool to each product line assuming by assuming deluxe model used as 50 work orders and the basic model used 150 work orders.

b.

Expert Solution
Check Mark

Answer to Problem 10BE

Calculate the maintenance pool for each product line:

ParticularsMaintenance cost Allocated
Deluxe ($240,000×25%(3))$60,000
Basic ($240,000×75%(4))$180,000
Total  cost allocated$240,000

(Table 3)

Explanation of Solution

Calculate the maintenance pool to each product line assuming by assuming deluxe model used as 50 work orders and the basic model used 150 work orders.

ParticularsWork ordersPercent to total
Deluxe50 (3) 25%
Basic150
  1. (4) 75%
Total 200100%

(Table 4)

Working note:

Calculate the percent of deluxe model work orders:

Percent of deluxe model work orders = Work orders of deluxe modelTotal work orders×100=50200×100=25% (3)

Calculate the percent basic model work orders:

Percent of basic model work orders = Work orders of basic modelTotal work orders×100=150200×100=75% (4)

c.

To determine

Allocate the set –up pool to each product line by assuming that deluxe model used 30 production runs and the basic model used 70 production runs.

c.

Expert Solution
Check Mark

Answer to Problem 10BE

Calculate the set-up pool for each product line:

ParticularsSet-up cost Allocated
Deluxe ($60,000×30%(5))$18,000
Basic ($60,000×70%(6))$42,000
Total  cost allocated$60,000

(Table 5)

Explanation of Solution

Calculate the set –up pool to each product line assuming by assuming deluxe model used as 30 production runs and the basic model used 70 production runs.

ParticularsProduction RunsPercent to total
Deluxe30
  1. (5) 30%
Basic 70
  1. (6) 70%
Total 100100%

(Table 6)

Working note:

Calculate the percent of deluxe model production runs:

Percent of deluex model production runs = Production runs of deluxe modelTotal production runs×100=30100×100=30% (5)

Calculate the percent basic model production runs:

Percent of basic model production runs= Production runs of basic modelTotal production runs×100=70100×100=70% (6)

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Chapter 17 Solutions

Financial & Managerial Accounting

Ch. 17 - 4. What is meant by the term overhead application...Ch. 17 - 5. What is meant by the term overhead cost driver?...Ch. 17 - Prob. 6DQCh. 17 - Prob. 7DQCh. 17 - 8. Taylor & Malone is a law firm. Would the...Ch. 17 - 9. Define the term activity base. Ch. 17 - 10. Define the term cost driver. Ch. 17 - 11. Why is the use of a single activity base...Ch. 17 - 12. Describe how activity-based costing can...Ch. 17 - Prob. 13DQCh. 17 - 14. Why is the use of direct labor hours as an...Ch. 17 - 15. Discuss the potential benefits associated with...Ch. 17 - BRIEF EXERCISE 17.1 Accounting for Overhead Taylor...Ch. 17 - BRIEF EXERCISE 17.2 Transferring Costs in a Job...Ch. 17 - BRIEF EXERCISE 17.3 Overhead Application...Ch. 17 - BRIEF EXERCISE 17.4 Actual Overhead versus Applied...Ch. 17 - BRIEF EXERCISE 17.5 Types of Cost Accounting...Ch. 17 - BRIEF EXERCISE 17.6 Applying Direct Labor...Ch. 17 - BRIEF EXERCISE 17.7 Applying Direct Materials...Ch. 17 - Prob. 8BECh. 17 - BRIEF EXERCISE 17.9 Selecting Activity...Ch. 17 - Prob. 10BECh. 17 - EXERCISE 17.1 Accounting Terminology Listed are...Ch. 17 - EXERCISE 17.2 Flow of Costs in Job Order...Ch. 17 - EXERCISE 17.3 Journal Entries in Job Order...Ch. 17 - EXERCISE 17.4 Overhead Cost Drivers; Determination...Ch. 17 - EXERCISE 17.5 Cost Classifications Identify...Ch. 17 - Prob. 6ECh. 17 - EXERCISE 17.7 Journal Entries, Cost Flows, and...Ch. 17 - EXERCISE 17.8 Journal Entries, Cost Flows, and...Ch. 17 - EXERCISE 17.9 Journal Entries, Cost Flows, and...Ch. 17 - Prob. 10ECh. 17 - EXERCISE 17.11 Solving for Missing Amounts in a...Ch. 17 - EXERCISE 17.12 Solving for Missing Amounts in a...Ch. 17 - EXERCISE 17.13 Determining Balance Sheet Amounts...Ch. 17 - EXERCISE 17.14 Allocating Activity Cost...Ch. 17 - EXERCISE 17.15 Using ABC to Determine a Bid...Ch. 17 - PROBLEM 17.1A Job Order Costing: Computations and...Ch. 17 - PROBLEM 17.2A Job Order Costing: Journal Entries...Ch. 17 - PROBLEM 17.3A Job Order Costing: A Comprehensive...Ch. 17 - Prob. 4APCh. 17 - PROBLEM 17.5A Poor Drivers Are Cost Drivers Ye...Ch. 17 - PROBLEM 17.6A Applying Overhead Costs Using...Ch. 17 - Prob. 7APCh. 17 - PROBLEM 17.8A ABC versus Use of a Single Activity...Ch. 17 - PROBLEM 17.1B Job Order Costing: Computations and...Ch. 17 - PROBLEM 17.2B Job Order Costing: Journal Entries...Ch. 17 - PROBLEM 17.3B Job Order Costing: A Comprehensive...Ch. 17 - Prob. 4BPCh. 17 - PROBLEM 17.5B Drivers for Drivers Big Boomers...Ch. 17 - PROBLEM 17.6B Applying Overhead Costs Using...Ch. 17 - Prob. 7BPCh. 17 - PROBLEM 17.8B ABC versus Use of a Single Activity...Ch. 17 - CASE 17.1 Classic Cabinets has one factory in...Ch. 17 - CASE 17.2 Implementing ABC Dave Miller is the...Ch. 17 - CASE 17.3 The Bidding Wars Kendahl Plastics...
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