Principles of Financial Accounting.
24th Edition
ISBN: 9781260158601
Author: Wild
Publisher: MCG
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Chapter C, Problem 5QS
a)
To determine
To determine the
b)
To determine
To determine the overhead cost per unit for deluxe units.
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A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the
company's three activity cost pools are shown in the following table:
BUDGETED ACTIVITY
Budgeted Cost Product A
$70,000
$45,000
$82,000
Activity Cost Pool
Activity 1
Activity 2
Activity 3
How much overhead will be assigned to Product B using activity-based costing?
Product B
9,000
15,000
1,000
6,000
7,000
2,500
Product C
20,000
8,000
1,625
A company has two products: A and B. It uses activity-based costing and has prepared the following analysis showing
budgeted cost and activity for each of its three activity cost pools:
Activity Cost Pool
Budgeted Activity
Product A Product B
Activity 1
Budgeted Cost
$ 99,000
$ 74,000
4,200
4,000
Activity 2
5,700
6,700
Activity 3
$117,000
3,700
6,450
Annual production and sales level of Product A is 35,500 units, and the annual production and sales level of Product
B is 70,750 units. What is the approximate overhead cost per unit of Product B under activity-based costing?
Multiple Choice
$3.59
$2.30
A company has two products: A and B. It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for
each of its three activity cost pools:
Budgeted Activity
Product A Product B
Activity Cost Pool
Activity 1
Activity 2
Activity 3
Budgeted Cost
$106,000
4,900
4,700
$ 81,000
6,400
7,400
$131,000
4,400
7,150
Annual production and sales level of Product A is 36,200 units, and the annual production and sales level of Product B is 71,450 units. What is the
approximate overhead cost per unit of Product A under activity-based costing?
Multiple Choice
$1.41
O $3.91
$11.04
$2.47
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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- A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table: Budgeted Activity Activity Budgeted Cost Activity Cost Driver Product A Product B Product C $ 70,000 $ 45,000 $ 82,000 Square feet Units inspected Activity 1 6,000 9,000 20,000 Activity 2 Activity 3 7,000 15,000 8,000 Setups 2,500 1,000 1,625 What are the activity rates for the three activities under activity-based costing? Multiple Choice (1) $2.00 per square foot; (2) $3.00 per unit; (3) $3.50 per setup. (1) $3.50 per square foot; (2) $1.50 per unit; (3) $32,80 per setup. (1) $3.50 per square foot; (2) $3.00 per unit; (3) $16.00 per setup. (1) $2.00 per square foot: (2) $1.50 per unit; (3) $16.00 per setup.arrow_forwardA company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table: Budgeted Activity Activity Cost Pool Activity 1 Activity 2 Activity 3 Budgeted Cost Product A Product B 6,300 7,300 2,800 Product C $73,000 $48,000 $88,000 20,300 8,300 1,925 9,300 15,300 1,300 How much overhead will be assigned to Product B using activity-based costing?arrow_forwardA company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table: Activity Cost Pool Budgeted Cost $70,000 $45,000 $82,000 Product A Budgeted Activity Product B 9,000 15,000 1,000 Product C Activity 1 6,000 Activity 2 7,000 Activity 3 2,500 Which of the following statements is true regarding this company's activity rates? 20,000 8,000 1,625 Seleccione una: O The activity rate under the activity-based costing system for Activity 2 is $1.50. O The activity rate under the activity-based costing system for Activity 2 is $19.50. O The activity rate under the activity-based costing system for Activity 2 is $2.00. O The activity rate under the activity-based costing system for Activity 2 is $16.00. O The activity rate under the activity-based costing system for Activity 2 is $2.81.arrow_forward
- ABSORPTION COSTING VERSUS THROUGHPUT COSTING The book The Goal illustrates the concept of throughput costing. For the problem below prepare all journal entries and determine the impact on the income statement of the differences between absorption costing (normal accounting) and throughput costing. HINT: pay very careful attention to definitions of throughput, inventory and operating expense from the book BUDGETED MANUFACTURING COSTS DIRECT MATERIAL $20 PER UNIT DIRECT LABOR $2 PER UNIT VARIABLE OVERHEAD $10 PER UNIT FIXED OVERHEAD $150,000 YEAR 1 NO BEGINNING INVENTORY ACTUAL COSTS OF PRODUCTION EQUALS ABOVE MANUFACTURING COSTS PURCHASE DIRECT MATERAILS OF $200,000 INCUR SELLING AND ADMIN COSTS OF $80,000 #UNITS PRODUCED 10,000 # UNITS SOLD 9,000 SALES PRICE OF UNITS SOLD $100 YEAR 2 THERE…arrow_forwardThe pool rate is defined as the cost per unit of the cost driver for a particular activity cost pool. Group of answer choices True False Rocket Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below. Activity Cost Cost Driver Material handling $ 225,000 Number of parts Material insertion 2,475,000 Number of parts Automated machinery 840,000 Machine hours Finishing 170,000 Direct labor hours Packaging 170,000 Orders shipped Total $ 3,880,000 The following information pertains to the three product lines for next year: Economy Standard Deluxe Units to be produced 10,000 5,000 2,000 Orders to be shipped 1,000 500 200 Number of parts per unit 10 15 25 Machine…arrow_forwardkes Tarnish Industries produces miniature models of farm equipment. These collectibles are in great demand. It takes two operations, molding and finishing. to complete the miniatures. Next year's expected activities are shown in the following table: Direct labor hours Machine hours Multiple Choice Tarnish Industries uses departmental overhead rates and is planning on a $5.30 per direct labor hour overhead rate for the Finishing department. Compute the budgeted manufacturing overhead cost for the Finishing department given the information shown in the table. $461,300 $914.250 $583.000 $495,550 Molding 87,000 DLH 110,000 MH Finishing 172,500 DLH 93,500 MH Multiple Choice Zoe Company reports the following for its overhead cost for the year. Activity Budgeted Cost Budgeted Activity Usage Engineering support $101,500 Electricity 195,000 70 design changes 3,900 machine hours 400 setups Setup 260,000 Compute the activity rate for engineering support using activity-based costing. $1,450 per…arrow_forward
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