FUND.ACCT.PRIN.
25th Edition
ISBN: 9781260247985
Author: Wild
Publisher: RENT MCG
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Question
Chapter C, Problem 9E
1.
To determine
Concept Introduction:
Activity-based costing: Activity-based costing is one of the cost allocation methods where
The activity rates for each job.
2.
To determine
Concept Introduction:
Activity-based costing: Activity-based costing is one of the cost allocation methods where overhead costs are allocated based on activity usage. It can be determined by using multiplying activity rate and activity usage. Activities can be classified as production, setups, design, and factory services.
The allocated costs of a job.
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Required information
Gable Company uses three activity pools. Each pool has a cost driver. Information for Gable Company follows:
Activity Pools
Machining
Designing costs
Setup costs
Number of machine hours
Number of design hours
Number of batches
Total Cost
of Pool
$ 171,100
45, 100
66,123
Suppose that Gable Company manufactures three products, A, B, and C. Information about these products follows:
Product A
Product B
Product C
Cost Driver
Number of machine hours
Number of design hours
Number of batches
Total Overhead
Assigned
Product A Product B
20,000
2,200
30,000
1,300
40
170
Estimated
Cost Driver
59,000
5,500
465
Product C
9,000
2,000
255
Required:
Using activity rates, determine the amount of overhead assigned to each product.
Note: Do not round intermediate calculations. Round the final answer to nearest whole number.
Question 2: Walker Co. designs and builds computer servers for data centers. They use job costing to determine the cost of
the systems that they install which consist of server racks. Each system requires a different number of server racks to be installed.
Use the forecasts below to determine the total cost of each customer's system.
One manager must be hired for every twenty direct labor hours that will be spent on installations in total (round up for fractions),
and the advertising expenses are used to run local television advertisements in the hopes of enticing new business.
The cost of a typical project is shown below, along with details about several customer orders.
Direct Materials
$5,000 per server rack
Direct Labor
$60 per hour
$3,000 per person
Manager Salary
Advertising Expenses
$10,000 per month
Direct Labor Time
2 hours per server rack
Customers
Alice
Ben
Chris
Doris
Hours
Alice
Ben
Chris
Doris
Size of System in Racks
10
4
15
20
14
30
(A) What driver should Walker Co. use…
The company is considering using a two-stage cost allocation system and wants to assess the effects on reported product profits.
The company is considering using Engineering Hours and Users as the allocation base. Additional information follows.
Toot! TiX Total
Engineering hours 7,650 5,650 13,300
Users 9,500 17,100 26,600
Engineering – hour related administrative cost $ 114,380
User-related administrative cost $…
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?
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