Principles of Financial Accounting.
24th Edition
ISBN: 9781260158601
Author: Wild
Publisher: MCG
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Chapter C, Problem 2QS
a)
To determine
To compute a single plant
b)
To determine
To assign overhead costs to each model.
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Silven Company has identified the following overhead activities, costs, and activity drivers for the coming year:
Activity
Expected Cost
Activity Driver
Activity Capacity
Setting up equipment
$126,000
Number of setups
150
Ordering materials
18,000
Number of orders
900
Machining
1,260,000
Machine hours
10,500
Receiving
30,000
Receiving hours
1,250
Silven produces two models of cell phones with the following expected activity demands:
Model X
Model Y
Units completed
5,000
10,000
Number of setups
100
50
Number of orders
300
600
Machine hours
6,000
4,500
Receiving hours
375
875
Required:
Determine the total overhead assigned to each product using the four activity drivers.
Determine the total overhead assigned to each model using the two most expensive activities. The costs of the two relatively inexpensive activities are allocated to the two expensive activities in proportion to their costs.
Using ABC as the benchmark, calculate the percentage error and…
Xie Company identified the following activities, costs, and activity drivers for 2017. The company manufactures two types of go-karts: Deluxe and Basic.
Activity
Expected Costs
Expected Activity
Handling materials
$
625,000
100,000
parts
Inspecting product
900,000
1,500
batches
Processing purchase orders
105,000
700
orders
Paying suppliers
175,000
500
invoices
Insuring the factory
300,000
40,000
square feet
Designing packaging
75,000
2
models
Required:Compute the activity rate for each activity, assuming the company uses activity-based costing. (Round activity rate answers to 2 decimal places.)
Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year.
Activity
Expected Cost
Activity Driver
Activity Capacity
Setting up equipment
$480,000
Number of setups
600
Ordering costs
360,000
Number of orders
18,000
Machine costs
840,000
Machine hours
42,000
Receiving
400,000
Receiving hours
10,000
Deoro produces two models of dishwashers with the following expected prime costs and activity demands:
Model A
Model B
Direct materials
$600,000
$800,000
Direct labor
$480,000
$480,000
Units completed
16,000
8,000
Direct labor hours
6,000
2,000
Number of setups
400
200
Number of orders
6,000
12,000
Machine hours
24,000
18,000
Receiving hours
3,000
7,000
The company's normal activity is 8,000 direct labor hours.
Required:
Determine the unit cost for each model using direct labor hours to…
Chapter C Solutions
Principles of Financial Accounting.
Ch. C - Why are overhead costs allocated to products and...Ch. C - Prob. 2DQCh. C - Prob. 3DQCh. C - What is activity-based costing? What is its goal?Ch. C - Prob. 5DQCh. C - Prob. 6DQCh. C - Prob. 7DQCh. C - Identify at least four typical cost pools for...Ch. C - Prob. 9DQCh. C - Prob. 10DQ
Ch. C - Prob. 11DQCh. C - Prob. 1QSCh. C - Prob. 2QSCh. C - Prob. 3QSCh. C - Prob. 4QSCh. C - Prob. 5QSCh. C - Prob. 6QSCh. C - Prob. 7QSCh. C - Prob. 1ECh. C - Prob. 2ECh. C - Prob. 3ECh. C - Prob. 4ECh. C - Prob. 5ECh. C - Prob. 6ECh. C - Maxlon Company manufactures custom-made furniture...Ch. C - Prob. 5APCh. C - Prob. 6APCh. C - SP 1 This serial problem began in Chapter 1 and...
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