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 6SE
The following information is provided for Orbit Antenna Corp., which manufactures two products: Lo-Gain antennas and Hi-Gain antennas for use in remote areas.
Orbit Antenna plans to produce 125 Lo-Gain antennas and 225 Hi-Gain antennas.
Requirements
- 1. Compute the indirect
manufacturing cost per unit using direct labor hours for the single plant wide predeterminedoverhead allocation rate. - 2. Compute the ABC indirect manufacturing cost per unit for each product.
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SIMPly Power Inc., manufactures and sells two products: Product V9 and Product B1. Data concerning
the expected production of each product and the expected total direct labour-hours (DLHS) required to
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Product B1
Total direct labour-hours
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Product B1
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The company is considering adopting an activity-based costing system with the following activity cost
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O $86.5 per unit
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O $129.12 per unit
O $217.95 per unit
O $272.08 per unit
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5.0
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$176.90
$262.80
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36,990
62,408
$194,246
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Vattes, Incorporated, manufactures and sells two products: Product 15 and Product U1. Data concerning the expected production of each product and the
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Product 15
Product U1
Direct
Labor-
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Production Unit
700
7.0
200
4.0
Activity Cost Pools
Labor-related
Machine setups
Order size
Product 15
Product U1
Total direct labor-hours
The direct labor rate is $22.00 per DLH. The direct materials cost per unit for each product is given below:
Direct
Materials
Cost per
Unit
$ 261.60
$ 121.60
Activity
Measures
DLHS
setups
MHS
The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity,
Expected Activity
Total
Direct
Labor-
Estimated
Overhead
Cost
$ 268,698
Hours
4,900
800
5,700
37,324
633,895
$939,917
Product 15 Product U1
4,900
300
4,900
800
400
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5,700
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Casey Company has five activity cost pools and two products. It expects to
produce 200,000 units of its automobile scissors jack and 80,000 units of its truck
hydraulic jack. Having identified its activity cost pools and the cost drivers for
each cost pool, Casey Company accumulated the following data relative to those
activity cost pools and cost drivers.
Expected Use of
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Hydraulic
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Annual Overhead Data
Expected Use of Cost
Drivers per Activity
Estimated
Scissors
Activity Cost Pools
Ordering and receiving
Machine setup
Machining
Assembling
Inspecting and testing
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$ 200,000
600,000
2,000,000
1,800,000
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1,200 setups
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1,500
700
500,000
1,200,000
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Purchase orders
1,000
Setups
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500
Parts
Tests
3,000,000 parts
35,000 tests
300,000
1,800,000
20,000
$5,300,000
Required: Using ABC Calculate Per Unit and Total cost of Both Products
also Comment?
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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