Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 6, Problem 7EA
Rex Industries has two products. They manufactured 12,539 units of product A and 8.254 units of product B. The data are:
What is the activity rate for each cost pool?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
The cost per unit associated with the production of Xen Merchandising are the following: Direct
Materials - P1,000; Direct Wages - P200; Variable Overhead - P1,500; and Fixed Overhead - P2,000.
Given the data, what is the product cost?
Snavely, Incorporated, manufactures and sells two products: Product E1 and Product A7. Data concerning the expected production of each product and
the expected total direct labor-hours (DLHs) required to produce that output appear below:
Product E1
Product A7
Total direct labor-hours
Product E1
Product A7
The direct labor rate is $27.10 per DLH. The direct materials cost per unit for each product is given below:
Direct Materials
Cost per Unit
$ 233.00
$285.00
Activity Cost Pools
Labor-related
Machine setups
Order size
Expected
Production
600
200
The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
Direct Labor- Total Direct
Hours Per Unit Labor-Hours
4,800
8.0
4.0
800
5,600
Activity
Measures
DLHs
setups
MHs
Estimated
Overhead Cost
$ 117,100
55,210
863,520
$ 1,035,830
Expected Activity
Product E1 Product A7
4,800
700
2,900
800
200
3,600
Total
5,600
900
6,500
The total overhead applied to Product E1 under…
Vattes, Incorporated, manufactures and sells two products: Product 15 and Product U1. Data concerning the expected production of each product and the
expected total direct labor-hours (DLHs) required to produce that output appear below:
Product 15
Product U1
Total direct labor-hours
Product 15
Product U1
Direct
Materials
Cost per
Unit
$ 261.60
$ 121.60
The direct labor rate is $22.00 per DLH. The direct materials cost per unit for each product is given below:
Expected Hours Per
Production Unit
700
7.0
200
4.0
Activity Cost Pools
Labor-related
Machine setups
Order size
Direct
Labor-
The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
Expected Activity
Activity
Measures
DLHS
setups
MHS
Estimated
Overhead
Cost
Total
Direct
Labor-
Hours
4,900
800
5,700
$ 268,698
37,324
633,895
$ 939,917
Product 15 Product U1
4,900
300
4,900
800
400
4,800
Total
5,700
700
9,700
Which of the following statements…
Chapter 6 Solutions
Principles of Accounting Volume 2
Ch. 6 - Active Frame, Inc., manufactures clear and tinted...Ch. 6 - TyeDye Lights makes two products: Party and...Ch. 6 - Which is not a step in analyzing the cost driver...Ch. 6 - Overhead costs are assigned to each product based...Ch. 6 - Which of the following is a reason a company would...Ch. 6 - Which is the correct formula for computing the...Ch. 6 - A company anticipates the cost to heat the...Ch. 6 - A company calculated the predetermined overhead...Ch. 6 - Which is not a step In activity-based costing? A....Ch. 6 - What is the proper order of tasks In an ABC...
Ch. 6 - Which is not a task typically associated with ABC...Ch. 6 - Which statement is correct? A. Activity-based cost...Ch. 6 - Activity-based costing systems: A. use a single...Ch. 6 - Activity-based costing is preferable in a system:...Ch. 6 - Absorption costing is also referred to as: A....Ch. 6 - Under variable costing, a unit of product includes...Ch. 6 - Under absorption costing, a unit of product...Ch. 6 - A downside to absorption casting is: not including...Ch. 6 - When the number of units in ending inventory...Ch. 6 - Product costs under variable costing are...Ch. 6 - What is the predetermined overhead rate, and when...Ch. 6 - When is an activity-based costing system better...Ch. 6 - What is the advantage of labeling activities as...Ch. 6 - What conditions are necessary to designate an...Ch. 6 - For each cost pool, identify an appropriate cost...Ch. 6 - How is the primary focus of activity-based costing...Ch. 6 - What are the primary differences between...Ch. 6 - How are service companies similar or different...Ch. 6 - How are costs allocated in an ABC system?Ch. 6 - In production, what has changed to allow ABC...Ch. 6 - Why is it important to know the true cost for a...Ch. 6 - What is the primary difference between variable...Ch. 6 - Why would managers prefer variable costing over...Ch. 6 - Why is absorption costing the method allowable for...Ch. 6 - Can a company gather information for both variable...Ch. 6 - Steeler Towel Company estimates its overhead to be...Ch. 6 - Crystal Pools estimates overhead will utilize...Ch. 6 - A company estimated 100,000 direct labor hours and...Ch. 6 - Cozy, Inc., manufactures small and large blankets....Ch. 6 - Identify appropriate cost drivers for these cost...Ch. 6 - Match the activity with the most appropriate cost...Ch. 6 - Rex Industries has two products. They manufactured...Ch. 6 - Rex Industries has identified three different...Ch. 6 - Customs makes two types of hats: polyester (poly)...Ch. 6 - Customs has three cost pools and an associated...Ch. 6 - Potterii sells its products to large box stores...Ch. 6 - Assign each of the following expenses to either...Ch. 6 - Tri-bikes manufactures two different levels of...Ch. 6 - Cool Pool has these costs associated with...Ch. 6 - Using this information from Planters. Inc., what...Ch. 6 - Green Bay Cheese Company estimates its overhead to...Ch. 6 - Boarders estimates overhead will utilize 160,000...Ch. 6 - A company estimated 50,000 direct labor hours and...Ch. 6 - Cozy, Inc., manufactures small and large blankets....Ch. 6 - Identify appropriate cost drivers for these cost...Ch. 6 - Match the activity with the most appropriate cost...Ch. 6 - Rocks Industries has two products. They...Ch. 6 - Rocks Industries has identified three different...Ch. 6 - Frenchys makes two types of scarves: polyester...Ch. 6 - Frenchys has three cost pools and an associated...Ch. 6 - Carboni recently added a carbon line in addition...Ch. 6 - Assign each of the following expenses to either...Ch. 6 - Stacks manufactures two different levels of hockey...Ch. 6 - Crafts 4 All has these costs associated with...Ch. 6 - Using this information from Outdoor Grills, what...Ch. 6 - Colonels uses a traditional cost system and...Ch. 6 - Five Card Draw manufactures and sells 24,000 units...Ch. 6 - A local picnic table manufacturer has budgeted...Ch. 6 - Explain how each activity in this list can be...Ch. 6 - Medical Tape makes two products: Generic and...Ch. 6 - Box Springs, Inc., makes two sizes of box springs:...Ch. 6 - Please use the information from this problem for...Ch. 6 - A company has traditionally allocated its overhead...Ch. 6 - Carltons Kitchens makes two types of pasta makers:...Ch. 6 - Carltons Kitchens three cost pools and overhead...Ch. 6 - Lampierre makes brass and gold frames. The company...Ch. 6 - Portable Seats makes two chairs: folding and...Ch. 6 - Grainger Company produces only one product and...Ch. 6 - Summarized data for Walrus Co. for its first year...Ch. 6 - Happy Trails has this information for its...Ch. 6 - Appliance Apps has the following costs associated...Ch. 6 - This information was collected for the first year...Ch. 6 - Bobcat uses a traditional cost system and...Ch. 6 - Five Card Draw manufactures and sells 10,000 units...Ch. 6 - A local picnic table manufacturer has budgeted the...Ch. 6 - Explain how each activity in this list can be...Ch. 6 - Wrappers Tape makes two products: Simple and...Ch. 6 - Box Springs. Inc., makes two sizes of box springs:...Ch. 6 - Please use the information from this problem for...Ch. 6 - A company has traditionally allocated its overhead...Ch. 6 - Caseys Kitchens makes two types of food smokers:...Ch. 6 - Caseys Kitchens three cost pools and overhead...Ch. 6 - Lampierre makes silver and gold candlesticks. The...Ch. 6 - Portable Seats makes two chairs: folding and...Ch. 6 - Submarine Company produces only one product and...Ch. 6 - Summarized data for Backdraft Co. for its first...Ch. 6 - Trail Outfitters has this information for its...Ch. 6 - Wifi Apps has these costs associated with its...Ch. 6 - This information was collected for the first year...Ch. 6 - What conditions are optimal for using traditional...Ch. 6 - College Cases sells cases for electronic devices...Ch. 6 - How would a service industry apply activity-based...Ch. 6 - Cape Cod Adventures makes foam noodles with sales...Ch. 6 - In designing a bonus structure to reward your...
Additional Business Textbook Solutions
Find more solutions based on key concepts
E8-13 Identifying internal controls
Learning Objective 1
Consider each situation separately. Identify the missi...
Horngren's Accounting (12th Edition)
What is the difference between an allowance and a reimbursement? How does this difference affect labor burden?
Construction Accounting And Financial Management (4th Edition)
The accounting assumption that governs given situation.
Financial Accounting (11th Edition)
Compute Cost of Goods Manufactured and Cost of Goods Sold (Learning Objective 5) Compute the Cost of Goods Manu...
Managerial Accounting (5th Edition)
Discussion Analysis A13-41 Discussion Questions 1. How do managers use the statement of cash flows? 2. Describ...
Managerial Accounting (4th Edition)
Quick ratio and current ratio (Learning Objective 7) 1520 min. Consider the following data COMPANY A B C D Cash...
Financial Accounting, Student Value Edition (4th Edition)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Rocks Industries has two products. They manufactured 12,539 units of product A and 8.254 units of product B. The data are: Â What is the activity rate for each cost pool?arrow_forwardHesson, Incorporated, manufactures and sells two products: Product F3 and Product FO. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Product F3 Product FØ Total direct labor-hours Product F3 Product F0 Direct Materials Cost per Unit $ 261.40 $187.50 The direct labor rate is $16.30 per DLH. The direct materials cost per unit for each product is given below: Activity Cost Pools Labor-related Machine setups Order size Expected Hours Per Production Unit 300 6.0 200 5.0 Direct Labor- The company is considering adopting an activity-based costing system with the following activity cost pool Activity Measures DLHs setups MHS Total Direct Labor- Hours Estimated Overhead Cost 1,800 1,000 2,800 $ 110,964 33,005 486,720 $630,689 Expected Activity Product F3 Product FØ 1,800 1,000 300 200 3,100 2,900 tivity measures, and expected Total 2,800 500 6,000 The unit product cost of Product F3 under…arrow_forwardRondeau, Incorporated, manufactures and sells two products: Product V9 and Product M6. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Product V9 Product M6 Total direct labor-hours Product V9 Product M6 The direct labor rate is $24.20 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit $275.60 $ 168.80 Activity Cost Pools Labor-related Product testing Order size The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Required: Calculate the difference betwee the unit Expected Production 340 440 Traditional unit product cost ABC unit product cost Difference $ DLHs Tests MHS Product V9 Activity Measures Estimated Overhead Cost Direct Labor-Hours Per Unit 9.4 6.4 Product M6 0.00 $ Total Direct Labor-Hours 3,196 2,816 6,012 0.00 $ 95,656…arrow_forward
- Computing absorption cost per unit and variable cost per unit Adamson, Inc. has the following cost data for Product X: Calculate the unit product cost using absorption costing and variable costing when production is 2,000 units, 2,500 units, and 5,000 units.arrow_forwardRondeau, Incorporated, manufactures and sells two products: Product V9 and Product M6. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Product V9 Product M6 Total direct labor-hours Product V9 Product M6 Direct Materials Cost per Unit $ 287.60 $ 180.80 The direct labor rate is $26.60 per DLH. The direct materials cost per unit for each product is given below: Activity Cost Pools Labor-related Product testing Order size Expected Production 580 680 The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Traditional unit product cost ABC unit product cost Difference Direct Labor-Hours Per Unit DLHS Tests MHS 11.8 8.8 Activity Estimated Overhead Measures Product V9 Product M6 Total Direct Labor-Hours 6,844 5,984 12,828 Cost $ 101,656 75,208 398,000 $ 574,864 Product V9 6,844 1,020 5,300 Expected…arrow_forwardBarkes, Incorporated, manufactures and sells two products: Product BO and Product B5. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Product B0 Product B5 Total direct labor-hours Total Direct Expected Hours Per Labor- Production Unit Hours 400 7.0 500 4.0 Activity Cost Pools Labor-related Production orders Order size Direct Labor- The direct labor rate is $22.10 per DLH. The direct materials cost per unit is $288.10 for Product BO and $118.90 for Product B5. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Expected Activity Estimated Overhead Cost Activity Measures DLHs orders MHS 2,800 2,000 4,800 $ 136,944 64,629 588,294 $ 789,867 Product B0 Product B5 2,800 2,000 500 400 3,300 3,000 Total 4,800 900 6,300 The total overhead applied to Product BO under activity-based costing is closest to: (Round your…arrow_forward
- Nole, Incorporated, manufactures and sells two products: Product W8 and Product NO. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Product W8 Product NO Total direct labor-hours Total Direct Labor-Hours 900 11,000 11,900 The direct labor rate is $17.40 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit $ 176.40 $ 280.50 Product W8 Product NØ Expected Production 100 1,000 Activity Cost Pools Labor-related Machine setups Order size Direct Labor- Hours Per Unit 9.0 11.0 The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Expect Activity Product NO 11,000 400 4,200 Multiple Choice Activity Measures DLHS setups MHS Estimated Overhead Cost $461,720 25,865 796,220 $ 1,283,805 The overhead applied to each unit of Product W8 under…arrow_forwardUsing ABC to compute product costs per unit Spectrum Corp. makes two products: C and D. The following data have been summarized: The company plans to manufacture 250 units of each product. Calculate the product cost per unit for Products C and D using activity-based costing.arrow_forwardCarla Vista Manufacturing manufactures a single product. Annual production costs incurred in the manufacturing process are shown below for the production of 2,900 units. The company's Utilities and Maintenance costs are mixed costs. The fixed portions of these costs are $390 and $290, respectively. Calculate the expected costs to be incurred when production is 4,900 units. Use your knowledge of cost behavior to determine which of the other costs are foxed or variable. Production in Units Production Costs a. Direct Materials b. Direct Labor c. Utilities d. Rent e. Indirect Labor f. Supervisory Salaries & Maintenance 2,900 $ 8,961 23,461 1,666 3,900 6,351 2,400 1,711 Costs Incurred $ 4,900 Type of cost 10 0000 Farrow_forward
- Rondeau, Incorporated, manufactures and sells two products: Product V9 and Product M6. Data concerning the expected production of each product and the expected total direct labor-hours (DLHS) required to produce that output appear below: Total Direct Labor-Hours 7,564 6,624 14, 188 The direct labor rate is $27.00 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit Product V9 Product M6 Total direct labor-hours Product V9 Product M6 $ 289.60 $ 182.80 Activity Cost Pools Labor-related Product testing Order size The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Traditional unit product cost ABC unit product cost Difference Expected Production 620 720 Product V9 $ Direct Labor-Hours Per Unit 12.2 9.2 Activity Measures Estimated Overhead Cost DLHS $ 102,656 76,008 Tests MHS Product M6 0.00 $ Required: Calculate the difference between…arrow_forwardFor each of the four situations, calculate the cost basis per device based on the information shown above. (Round intermediate calculations and final answers to 2 decimal places.) A. Only the differential production costs could be considered as the cost basis. B. The total cost per device for normal production of 60,000 devices could be used as the cost basis. C. The total cost per device for productions of 66,000 devices, excluding marketing costs, could be used as the cost basis. D. The total cost per device for production of 66,000 devices, including marketing costs, could be used as the cost basis.arrow_forward3. Calculate the cycle time for each product by dividing the total hours used for each product by the units produced for each product. Now calculate the DBC cost for each product. Comment on the significance of DBC for this settingarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Cost Accounting - Definition, Purpose, Types, How it Works?; Author: WallStreetMojo;https://www.youtube.com/watch?v=AwrwUf8vYEY;License: Standard YouTube License, CC-BY