Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
6th Edition
ISBN: 9780134486857
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
Chapter 19, Problem 46P
This problem continues the Piedmont Computer Company situation from Chapter 17. Recall that Piedmont Computer Company allocated
Records for two jobs appear here:
Requirements
- 1. Compute the total cost for each job using activity-based costing. The cost of direct labor is $25 per hour.
- 2. Is the
job cost greater or less than that computed in Chapter 17 for each job? Why? - 3. If Piedmont Computer Company wants to earn an operating income equal to 45% of the total cost, what sales price should it charge each of these two customers?
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Dakota Products uses a job-costing system with two direct-cost categories (direct materials and direct manufacturing labor) and one manufacturing overhead cost pool. Dakota allocates manufacturing overhead
costs using direct manufacturing labor costs. Dakota provides the following information
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Read the requirements
Requirement 1. Compute the actual and budgeted manufacturing overhead rates for 2020 (Enter your answer as a number [not as a percentage] rounded to two decimal places, XXX)
Actual manufacturing overhead rate =
1.95
Budgeted manufacturing overhead rate
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=
Requirements
BES
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1. Compute the actual and budgeted manufacturing overhead rates for 2020
2. During March, the job-cost record for Job 626 contained the following information
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$55,000
Direct manufacturing labor costs
$45,000
Compute the cost of Job 626 using (a) actual costing and (b) normal costing
3. At the end of 2020, compute the under- or…
1. SIP Inc. (SIP) is plastic injection molding company specializing in front-end grilles.
Bilchew Numbers wants to look at using an activity-based costing system. For
2021, he estimated overhead costs of $12,560,000 to be allocated using an
activity-based costing system (see the table below). Bilchew also estimated that
direct labour will be paid at the rate of $15 per hour.
Cost Driver
Activity
Cost Pool
Estimated
Cost
Total Quantity of
Allocation Base
(allocation
base)
Indirect materials
$ 1,450,000 Direct materials
$6,590,910
Indirect labour and
2,000,000 Direct labour
100,000 hours
supervision
Utilities
3,598,000 Power
20,000 kilowatt-hours
(kWh)
consumption
Inspection
4,200,000 Inspection
15,000 inspections
Depreciation
1,312,000 Machine usage
160,000 machine-hours
$12,560,000
During January 2021, Bilchew worked on two jobs, which consumed the following
resources:
Job 2021-A1
Job 2021-A2
Direct materials cost
$ 6,500
$ 22,000
Direct labour cost
$42,000
$165,000
Machine-hours
1,800…
Marpole Enterprises has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year:
(Click the icon to view the estimates of the cost pools.)
The accounting records show the Bossman job consumed the following resourd
ources:
(Click the icon to view the resources consumed for the Bossman job.)
When selling prices are based on costs assigned using the single cost driver, direct labour hours, then the Bossman job
OA. may increase overall sales as other jobs will be cross-subsidized
B. will contribute too little to profits, and Gregory Enterprises will not want to accept additional work from the company
C. is fairly billed because resources are allocated uniformly to all jobs
D. will likely seek to do business with competitors
E. is grossly underbilled for the job, while other jobs will be unfairly overbilled
Resources Consumed
Cost Driver
Direct labour-hours
Machine-hours
Square metres of area
Actual Level
150
1,700
80
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Chapter 19 Solutions
Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
Ch. 19 - The Santos Shirt Company manufactures shirts in...Ch. 19 - Prob. 2TICh. 19 - Prob. 3TICh. 19 - Prob. 4TICh. 19 - Prob. 5TICh. 19 - Prob. 6TICh. 19 - Prob. 7TICh. 19 - Prob. 8TICh. 19 - Prob. 9TICh. 19 - Prob. 10TI
Ch. 19 - Prob. 11TICh. 19 - Prob. 12TICh. 19 - Which statement is false? a. Using a single...Ch. 19 - Compute It uses activity-based costing. Two of...Ch. 19 - Compute It uses activity-based costing. Two of...Ch. 19 - Compute It uses activity-based costing. Two of...Ch. 19 - Compute It can use ABC information for what...Ch. 19 - Prob. 6QCCh. 19 - Companies enjoy many benefits from using JIT....Ch. 19 - Which account is not used in JIT costing? a....Ch. 19 - The cost of lost future sales after a customer...Ch. 19 - Spending on testing a product before shipment to...Ch. 19 - What is the formula to compute the predetermined...Ch. 19 - How is the predetermined overhead allocation rate...Ch. 19 - Describe how a single plantwide overhead...Ch. 19 - Why is using a single plantwide overhead...Ch. 19 - Why is the use of departmental overhead allocation...Ch. 19 - What is activity-based management? How is it...Ch. 19 - How many cost pools are in an activity-based...Ch. 19 - What are the four steps to developing an...Ch. 19 - Why is ABC usually considered more accurate than...Ch. 19 - List two ways managers can use ABM to make...Ch. 19 - Define value engineering. How is it used to...Ch. 19 - Explain the difference between target price and...Ch. 19 - How can ABM be used by service companies?Ch. 19 - What is a just-in-time management system?Ch. 19 - Explain how the work cell manufacturing layout...Ch. 19 - What are the inventory accounts used in JIT...Ch. 19 - How is the Conversion Costs account used in JIT...Ch. 19 - Prob. 18RQCh. 19 - Which accounts are adjusted for the underallocated...Ch. 19 - Prob. 20RQCh. 19 - Prob. 21RQCh. 19 - Prevention is much cheaper than external failure....Ch. 19 - What are quality improvement programs?Ch. 19 - Prob. 24RQCh. 19 - Prob. 1SECh. 19 - The Oakman (Company (see Short Exercise S19-1) has...Ch. 19 - Activity-based costing requires four steps. List...Ch. 19 - Prob. 4SECh. 19 - Darby Corp. is considering the use of...Ch. 19 - The following information is provided for Orbit...Ch. 19 - Jaunkas Corp. manufactures mid-fi and hi-fi stereo...Ch. 19 - Spectrum Corp. makes two products: C and D. The...Ch. 19 - Refer to Short Exercise S19-8. Spectrum Corp....Ch. 19 - Haworth Company is a management consulting firm....Ch. 19 - Refer to Short Exercise S19-10. Haworth desires a...Ch. 19 - Prob. 12SECh. 19 - Prime Products uses a JIT management system to...Ch. 19 - Stegall, Inc. manufactures motor scooters. For...Ch. 19 - Koehler makes handheld calculators in two models:...Ch. 19 - Koehler (see Exercise E19-15) makes handheld...Ch. 19 - Koehler (see Exercise E19-15 and Exercise E19-16)...Ch. 19 - Franklin, Inc. uses activity-based costing to...Ch. 19 - Turbo Champs Corp. uses activity-based costing to...Ch. 19 - Eason Company manufactures wheel rims. The...Ch. 19 - Refer to Exercise E19-20. For 2019, Easons...Ch. 19 - Refer to Exercises E19-20 and E19-21. Controller...Ch. 19 - Treat Dog Collars uses activity-based costing....Ch. 19 - Western, Inc. is a technology consulting firm...Ch. 19 - Refer to Exercise E19-24. The president of Western...Ch. 19 - Prob. 26ECh. 19 - Refer to Exercise E19-26. Western desires a 20%...Ch. 19 - Lally, Inc. produces universal remote controls....Ch. 19 - Prob. 29ECh. 19 - Darrel Co. makes electronic components. Chris...Ch. 19 - Prob. 31ECh. 19 - Prob. 32ECh. 19 - Willitte Pharmaceuticals manufactures an...Ch. 19 - The Alright Manufacturing Company in Rochester,...Ch. 19 - Oscar, Inc. manufactures bookcases and uses an...Ch. 19 - Blanchette Plant Service completed a special...Ch. 19 - Low Range produces fleece jackets. The company...Ch. 19 - Stella, Inc. is using a costs-of-quality approach...Ch. 19 - Harcourt Pharmaceuticals manufactures an...Ch. 19 - The Alexander Manufacturing Company in Rochester,...Ch. 19 - Martin, Inc. manufactures bookcases and uses an...Ch. 19 - Rennie Plant Service completed a special...Ch. 19 - High Mountain produces fleece jackets. The company...Ch. 19 - Roxi, Inc. is using a costs-of-quality approach to...Ch. 19 - Download an Excel template for this problem online...Ch. 19 - This problem continues the Piedmont Computer...Ch. 19 - Prob. 1TIATCCh. 19 - Harris Systems specializes in servers for...Ch. 19 - Harris Systems has decided to adopt ABC. To remain...Ch. 19 - Prob. 1EICh. 19 - Anu Ghai was a new production analyst at RHI,...
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