Introduction To Managerial Accounting
8th Edition
ISBN: 9781259917066
Author: BREWER, Peter C., Garrison, Ray H., Noreen, Eric W.
Publisher: Mcgraw-hill Education,
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Chapter 4, Problem 1F15
To determine
Concept Introduction:
Predetermined overhead allocation:
Manufacturing overhead cost is the pool of all indirect costs incurred for the production. These are the costs which are not directly related to the product.
To Calculate:Plant wide overhead allocation rate.
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Kulka Corporation manufactures two products: Product F82D and Product T05P. The company uses a plantwide overhead rate based on direct labor hours. It is considering implementing an activity-based costing (ABC) system that allocates its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products F82D and T05P.
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Machining..........................
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10,000
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Fletes Corporation manufactures two products: Product O95C and Product M31N. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products O95C and M31N.
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$
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350
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$
98,000
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products
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$
340,000
10,000
DLHs
Activity Measure
Product O95C
Product M31N
Machine-hours
6,000
3,000
Number of setups
190
160
Number of products
1
1
Direct labor-hours
4,000
6,000
Using the ABC system, how much total manufacturing overhead cost would be assigned to Product O95C?
Immen Corporation manufactures two products: Product B820 and Product P99Y. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing
(ABC) system that allocates its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products B820 and P99Y.
Activity Cost Pool
Machining
Machine setups
Product design
Order size
Activity Measure
Machine-hours
Number of setups
Number of products
Direct labor-hours
Total Cost
Total Activity
$ 330,000
15,000 MHs
$ 300,000
500 setups
$ 46,000
2 products
$ 330,000
10,000 DLHS
Activity Measure
Machine-hours
Number of setups
Number of products
Direct labor-hours
Product Product
B820
P99Y
7,000
8,000
200
300
1
1
7,000
3,000
Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product B820?
Chapter 4 Solutions
Introduction To Managerial Accounting
Ch. 4 - What are the three common approaches for assigning...Ch. 4 - Why does activity-based costing appeal to some...Ch. 4 - Why do departmental overheadrates something result...Ch. 4 - What are the four hierarchical levels of activity...Ch. 4 - Why activity-based costing is described as a...Ch. 4 - Why do overhead costs often shift from high-volume...Ch. 4 - What are the three major ways in which...Ch. 4 - What are the major limitations of activity-based...Ch. 4 - Prob. 1AECh. 4 - Prob. 2AE
Ch. 4 - Change the data in red so that the Data area looks...Ch. 4 - Prob. 1F15Ch. 4 - Prob. 2F15Ch. 4 - Prob. 3F15Ch. 4 - Greenvood Company manufactures two products14,000...Ch. 4 - Prob. 5F15Ch. 4 - Prob. 6F15Ch. 4 - Greenvood Company manufactures two products14,000...Ch. 4 - Prob. 8F15Ch. 4 - Greenwood Company manufactures two products14,000...Ch. 4 - Prob. 10F15Ch. 4 - Prob. 11F15Ch. 4 - Greenwood Company manufactures two products14,000...Ch. 4 - Prob. 13F15Ch. 4 - Prob. 14F15Ch. 4 - Greenwood Company manufactures two products14,000...Ch. 4 - ABC Cost Hierarchy L041 The following activities...Ch. 4 - Compute Activity Rates L042 Rustafson Corporation...Ch. 4 - Compute ABC Product Costs L043 Lamer Corporation...Ch. 4 - Contrast ABC and Conventional Product Costs L044...Ch. 4 - Assigning Overhead to Products in ABC L042, L043...Ch. 4 - Cost Hierarchy and Activity Measures L041 Various...Ch. 4 - Contrast ABC and Conventional Product Costs L042,...Ch. 4 - Prob. 8ECh. 4 - Prob. 9ECh. 4 - Rocky Mountain Corporation makes two types of...Ch. 4 - Contrasting Activity-Based Costing and...Ch. 4 - Contrasting ABC and Conventional Product cost...Ch. 4 - ABC Cost Hierarchy L041 Mitchell Corporation...Ch. 4 - Prob. 14PCh. 4 - Prob. 15PCh. 4 - Contrasting ABC and Conventional Product Costs...Ch. 4 - Contrast Activity-Based Costing and Conventional...Ch. 4 - Adria Company recently implemented an...
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