FUND.ACCT.PRIN.
25th Edition
ISBN: 9781260247985
Author: Wild
Publisher: RENT MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter C, Problem 1PSA
Problem C-1A Applying activity-based costing P1 P2 A1
Craftmore Machining produces machine tools for the construction industry. The following details about
Production Activity
Indirect labour
Indirect material
Other overhead
Grinding.............................
$320,000
Polishing............................ $13S,000
Product modification.................. 600,000
Providi ng power...................... $255,000
System calibration.................... 500,000
Additional information on the drivers for its production activities follows.
Grinding...................... 13,000 machine hours Providing power............ 17,000 direct labor hours
Polishing..................... 13,000 machine hours System calibration........... 400 batches
Product modification........... 1.500 engineering hours
Required
1. Compute the activity overhead rates using ABC. Form cost pools as appropriate.
2. Determine overhead costs to assign to the following jobs using ABC.
Number of units............. 2O0 units 2,500 Units
Machine hours.............. 550 MH 5,00 MH
Engineering hours........... 26 eng. hours 32 eng. hours
Batches ................... 30 batches 90 batches
Direct labor hours ........... 500 DLH 4.375 DLH
3. What is the overhead cost per unit for Job 3175? What is the overhead cost per unit for Job 4286? Check (3) Job 3175, $373.25 per unit
4. If the company used a plantwide overhead rate based on direct labor hours, what would be the overhead cost for each unit of Job 3175? for Job 4286?
5. Compare the overhead costs per unit computed in requirements 3 and 4 for each job.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
PROBLEM 1
FIGHTING Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor hours (DLHs). The company has two products, H16Z and P25P, about which it has provided the following data:
H16Z
P25P
Direct materials per unit
P10.20
P50.50
Direct labor per unit
P8.40
P25.20
Direct labor-hours per unit
0.40
1.20
Annual production
30,000
10,000
The company’s estimated total manufacturing overhead for the year is P1,464,480 and the company’s estimated total direct labor-hours for the year is 24,000.
The company is considering using a variation of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below:
Activities and Activity Measures
Estimated Overhead Cost
Supporting direct labor (DLHs)
P 552,000
Setting…
Landen Corporation uses a job-order costing system. At the beginning of the year, the company made the following estimates:
Direct labor-hours required to support estimated production
Machine-hours required to support estimated production
Fixed manufacturing overhead cost
100,000
50,000
$ 280,000
$ 2.80
$ 5.60
Variable manufacturing overhead cost per direct labor-hour
Variable manufacturing overhead cost per machine-hour
During the year, Job 550 was started and completed. The following information is available with respect to this job:
Direct materials
Direct labor cost
Direct labor-hours
Machine-hours
$ 216
$ 327
15
5
Required:
1. Assume that Landen has historically used a plantwide predetermined overhead rate with direct labor-hours as the allocation base.
Under this approach:
a. Compute the plantwide predetermined overhead rate.
b. Compute the total manufacturing cost of Job 550.
c. If Landen uses a markup percentage of 200% of its total manufacturing cost, what selling price would…
TB MC Qu. 4-49 Boesenhofer, Inc., manufactures and sells...
Boesenhofer, Inc., manufactures and sells two products: Product N6 and Product N7. The company has an activity-based costing system with the following activity cost pools, activity measures, and
expected activity
Estimated
Expected Activity
Activity
Overhead
Activity Cost Pools
Measures
Cost
Product N6
Product N7
Labor-related
DLHS
Total
$345,060
128,534
107,598
2,100
600
4,100
Machine setups
5,000
800
3,800
setups
7,100
Order size
MHs
1,400
7,900
$581,192
The activity rate for the Machine Setups activity cost pool is closest to:
Multiple Cholce
$73.57 per setup
$91.81 per setup
Prev
of 36
Next >
10:54 AM
66°F Mostly cloudy
目。
21
10/20/2021
pe here to search
DELL
Home
End
Delete
PgUp
PgDn
F12
PrtScr
Insert
F10
F11
F8
F9
F7
F4
F5
F6
F3
Num
Lock
Backspace
&
%23
%24
Chapter C Solutions
FUND.ACCT.PRIN.
Ch. C - Prob. 1QSCh. C - Computing plantwide overhead rates P1 Chan Company...Ch. C - Computing overhead rates under ABC P2 Refer to the...Ch. C - Prob. 4QSCh. C - Prob. 5QSCh. C - Prob. 6QSCh. C - Prob. 7QSCh. C - Prob. 8QSCh. C - Prob. 9QSCh. C - Prob. 10QS
Ch. C - Prob. 11QSCh. C - Prob. 1ECh. C - Prob. 2ECh. C - Prob. 3ECh. C - Prob. 4ECh. C - Prob. 5ECh. C - Exercise C-6 Activity-based costing P2 Northwest...Ch. C - Prob. 8ECh. C - Prob. 9ECh. C - Prob. 10ECh. C - Prob. 11ECh. C - Prob. 12ECh. C - Problem C-1A Applying activity-based costing P1 P2...Ch. C - Prob. 2PSACh. C - Prob. 3PSACh. C - Prob. 4PSACh. C - Prob. CSPCh. C - Prob. 1DQCh. C - Complete the following for a traditional two-stage...Ch. C - What is the difference between operating...Ch. C - What is activity-based costing? What is its goal?Ch. C - What is a cost object?
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
- EXERCISE 5-15 Comprehensive Activity-Based Costing Exercise L05-2, L05-3, L05-4, L05-5 Advanced Products Corporation has supplied the following data from its activity-based costing system: Overhead Costs Wages and salaries. Other overhead costs. Total overhead costs.. Activity Cost Pool Supporting direct labor. ... Order processing Customer support. Other Wages and salaries. . . . . . . Other overhead costs..... vollot ynsqmos silt pode noitsmolni lenonibb neupon edull porib od T $300,000 on adol 100,000A #T Activity Measure Number of direct labor-hours Number of customer orders Number of customers This is an organization-sustaining activity Supporting Direct Labor 40% 30% Order Processing $400,000 Distribution of Resource Consumption Across Activities 3210 30% 10% Customer Support 20% 20% Total Activity for the Year 20,000 DLHs 400 orders 200 customers Not applicable Senasisch Other 10% 40% Total 100% 100%arrow_forwardProblem C-1A Applying activity-based costing LO P1, P2, A1 Skip to question [The following information applies to the questions displayed below.] Craftmore Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records. Production Activity Indirect Labor Indirect Materials Other Overhead Grinding $ 310,000 Polishing $ 145,000 Product modification 550,000 Providing power $ 260,000 System calibration 560,000 Additional information on the drivers for its production activities follows. Grinding 17,000 machine hours Polishing 17,000 machine hours Product modification 1,500 engineering hours Providing power 15,000 direct labor hours System calibration 200 batches Problem C-1A Part 2 Job 3175 Job 4286 Number of units 150 units 1,875 units Machine…arrow_forwardd. $70,000 What is the journal entry to assign indirect raw materials to a job a. Debit Work in Process account and credit Raw Materials account b. Debit Finished Goods account and credit Raw Materials account c. Debit Manufacturing Overhead account and credit Raw Materials account d. Debit Raw Materials account and credit Work in Process account Lontoy.arrow_forward
- 4:50 Using the following data for January, calculate the cost of goods manufactured: Direct materials............ $25,000 Direct labor................ ..$ 6,000 Manufacturing overhead..........$ 9,000 Beginning work in process......$ 8,000 Ending work in process..........$12,000 The cost of goods manufactured was: Multiple Choice $48,000 $40,000 $44,000 $36.000 APR 28 < Prev Saved n tv 5 of 53 ‒‒‒ M N Sarrow_forwardA Cothing Manufacturing Company provides the following unit costs associated with one of its products: Direct materials. Direct manufacturing labor Variable manufacturing overhead Fixed manufacturing overhead Operating costs Total $160 50 55 32 30 $327 What are the period costs per unit associated with the Product? O A $30 O B. $33 OC. $100 O D. $17arrow_forwardProblem 1 QWE Company engages in manufacturing business of toys. The company records shown the following: Factory Overhead 2,500,000 Direct Materials Cost 4,000,000 Direct Labor Cost 2,000,000 Direct Labor Hours 625,000 Machine Hours 800,000 Units Produced 500,000 The company wants to determine the overhead rate for the application of overhead in its operation Required What will be the predetermined rate in applying the overhead applied using the following basis? a. units produced b. direct labor cost c. direct labor hours d. direct materials cost e. machine hoursarrow_forward
- Problem 2 Milky Corporation has provided the following data from its activity-based costing accounting system: Activity Cost Pools Designing products Setting up batches Assembling products Total Cost P1,372,448 P33,300 P126,160 Total Activity 7,798 product design hours 740 batch set-ups 6,640 assembly hours The activity rate for the "designing products" activity cost pool is answer must be in nearest peso A The activity rate for the "setting up batches" activity cost pool is answer should be in nearest peso A The activity rate for the "assembling products" activity cost pool is answer must be in nearest peso Aarrow_forwardPROBLEM #1 Xavier Company produces a single product. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. The standard costs for one unit of product are as follows: Direct material: 6 ounces at $0.50 per ounce . . . . . . . . . . . . . . . . . . $3 Direct labor: 1.8 hours at $10 per hour . . . . . . . . . . . . . . . . . . . . . . . 18 Variable manufacturing overhead: 1.8 hours at $5 per hour . . . . . . . 9 Total standard variable cost per unit . . . . . . . . . . . . . . . . . . . . . . . . . $30 During June, 2,000 units were produced. The costs associated with June’s operations were as follows: Material purchased: 18,000 ounces at $0.60 per ounce . . . . . . . $10,800 Material used in production: 14,000 ounces . . . . . . . . . . . . . . . . . — Direct labor: 4,000 hours at $9.75 per hour . . . . . . . . . . . . . . . . . $39,000 Variable manufacturing overhead costs incurred . . . . . . . . . . . . . $20,800 Required: Compute the direct…arrow_forwardQuestion No.5 Ivory Corporation manufactures two products (A and B). The overhead costs have been divided into four cost pools that use the following activity drivers: Product Number of Orders Number of Set-ups Number of Labor Transactions Labor Hours A B Cost per pool 20 5 Rs.15,000 35 70 Rs.8,400 1,000 1,500 Rs.120,000 75 125 Rs.40,000 Required: Compute the allocation rates for each of the activity drivers listed. Allocate the overhead cost to Product A and B using activity-based-costing. Compute the overhead rate using machine hours under the functional based costing system. Allocate the overhead cost to Product A and B using the functional-based costing system overhead rate calculated in part C.arrow_forward
- TB MC Qu. 4-94 Vanvalkenburg, Inc., manufactures and... Vanvalkenburg. Inc., manufactures and sells two products: Product GQ5 and Product JO. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Expected Activity Activity Overhead Activity Cost Pools Measures Cost Product Q5 Product JØ Total Labor-related DLHS $191,748 70,536 295,592 Production orders 3,000 2,800 5,800 orders 300 500 800 Order size MHs 4,300 4,500 8,800 $557,876 The activity rate for the Order Size activity cost pool under activity-based costing is closest to: Multiple Cholce $36.23 per MH $68.48 per MH $96.19 per MH 10:54 AM 66°F Mostly cloudy 21 pe here to search 10/20/2021 DELL PgUp PgDn Ho Deletearrow_forwardQuestion 13All costs related to the manufacturing function in a company are:A. Prime costB. Conversion costC. Direct costD. Product cost Question 14In job-order cost system, the use of direct materials previously purchased usually is recorded as an increase in:A. Material accountB. Factor overhead appliedC. Factor overhead accountD. Work-in-process account Question 15The wages of factory janitorial staff should be classified as: A. Period costB. Factory overhead costC. Prime costD. Direct labor costarrow_forwardroblem C-1A Applying activity-based costing LO P1, P2, A1 Skip to question [The following information applies to the questions displayed below.] Craftmore Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records. Production Activity Indirect Labor Indirect Materials Other Overhead Grinding $ 310,000 Polishing $ 145,000 Product modification 550,000 Providing power $ 260,000 System calibration 560,000 Additional information on the drivers for its production activities follows. Grinding 17,000 machine hours Polishing 17,000 machine hours Product modification 1,500 engineering hours Providing power 15,000 direct labor hours System calibration 200 batches Problem C-1A Part 4 Job 3175 Job 4286 Number of units 150 units 1,875 units Machine…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Survey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning
Cost Accounting - Definition, Purpose, Types, How it Works?; Author: WallStreetMojo;https://www.youtube.com/watch?v=AwrwUf8vYEY;License: Standard YouTube License, CC-BY