Quiz 3 Managerial Accounting Study Guide

! 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: Support Department Cost allocation and Job Costing Custom Boat Manufacturing Company makes customised boats and uses job costing system. The company has two support departments (administration and security) and two manufacturing departments (machining and assembly). The following table shows the total overhead costs of manufacturing departments after the support departments' cost have been allocated under three cost allocation methods. Machining Department Cost $ 8,650,000 $ 8,500,000 $ 9,000,000 Assembly Department Cost $ 7,350,000 $ 7,500,000 $ 7,000,000 Cost Allocation Method Direct Method Step-down Method Reciprocal Method Management of the company has decided that it will achieve the most appropriate job costs by using individual manufacturing department overhead rates to allocate the overhead costs to the jobs. These rates are developed after support-department costs are allocated to manufacturing departments. The company uses normal costing. Machining department's…

Required information Lakeside Incorporated manufactures four lines of remote control boats and uses activity-based costing to calculate product cost. Activity Pools Machining Setup Quality control Cost Pool Machining Setup Quality Control Total Overhead Estimated Total Cost $ 679,400 105,950 164,900 Required: Suppose the Speedy boat requires 2,840 machine hours, 100 batches, and 300 inspections. Using the activity rates. determine the amount of overhead assigned to the Speedy product line. Note: Do not round your intermediate calculations and round your final answers to the nearest dollar amount. Allocated Overhead $ Estimated Cost Driver 0 21,500 machine hours 520 batches 970 inspections

Drilling Company uses activity-based costing and provides this information:   Manufacturing Activity Cost Driver Driver Rate Materials handling Number of parts $ 0.60 Machinery Number of machine hours 51.00 Assembly Number of parts 2.85 Inspection Number of finished units 30.00   Drilling has just completed 80 units of a component for a customer. Each unit required 100 parts and 3 machine hours. The prime cost is $1,300 per finished unit. All other manufacturing costs are classified as manufacturing overhead.   Required: 1. Compute the total manufacturing costs and the unit costs of the 80 units just completed using ABC costing. 2. In addition to the manufacturing costs, the firm has determined that the total cost of upstream activities, including research and development and product design, is $180 per unit. The total cost of downstream activities, such as distribution, marketing, and customer service, is $300 per unit. Compute the full product cost per unit, including…

Required information Lakeside Inc. manufactures four lines of remote control boats and uses activity-based costing to calculate-product cost. Activity Cost Pools Machining Setup Quality control Estimated Total Cost $562,400 18,500 machine hours 93,035 143,780 Estimated Cost Driver 460 batches 910 inspections Suppose the Luxury boat requires 6,660 machine hours, 182 inspections, and 92 batches. Using activity proportions, determine the amount of overhead assigned to the Luxury product line. (Round your final answers to the nearest whole number.) Cost Pool Allocated Overhead Machining 2$ 130,464 Setup Costs $ 36,810 Quality Control $ 14,528 Total Overhead 249,827

Drilling Company uses activity-based costing and provides this information:   Manufacturing Activity Cost Driver Driver Rate Materials handling Number of parts $ 0.3   Machinery Number of machine hours   56   Assembly Number of parts   3.10   Inspection Number of finished units   35       Drilling has just completed 85 units of a component for a customer. Each unit required 105 parts and 3.25 machine hours. The prime cost is $1,350 per finished unit. All other manufacturing costs are classified as manufacturing overhead.   Required: 1. Compute the total manufacturing costs and the unit costs of the 85 units just completed using ABC costing. 2. In addition to the manufacturing costs, the firm has determined that the total cost of upstream activities, including research and development and product design, is $185 per unit. The total cost of downstream activities, such as distribution, marketing, and customer service, is $305 per unit. Compute the full product cost per…

Hazelnut Corporation manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $143,484 in overhead. The company has identified the following information about its overhead activity pools and the two product lines: Quantity or Amount Consumed by Basic Activity Pools Materials handling Quality control Machine maintenance Cost Driver Number of moves Number of inspections Number of machine hours Required 1 Complete this question by entering your answers in the tabs below. Basic Model Luxury Model Required 2 Required 3 Required 4 Required: 1. Suppose Hazelnut used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. 2. Calculate the activity rates for each activity pool in Hazelnut's ABC system. 3. Calculate the amount of overhead that Hazelnut will assign to the basic line if it uses an ABC system. 4. Determine the amount of overhead Hazelnut will assign…

The managerial accountant at Sunny Manufacturing needs to determine how many costs are fixed costs and how many costs are variable costs in the organization. The managerial accountant reported the following information: Use the high-low method to determine the cost equation and use machine hours as the base for a cost driver in the analysis. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). Month Machine-Hours Total Cost January 1,800 $21,500 February 2,900 $23,200 March 1,000 $19,750 April 2,400 $21,000 May 3,400 $23,900

As the firm’s accountant you are required to write a report explaining your general approach to the use of cost accounts and in particular the problems of overhead costing.  The company has two producing departments, machining and assembly, and one service department, the canteen.  Direct departmental overhead for the coming year is estimated as machining K50,000, assembly K40,000 and canteen K10,000.  Details of estimated indirect overhead are as follows: Rates                                                         K1,000 Depreciation                                            K9,500 Light and power                                         K600 DEPARTMENTAL DATA                                                                             No. of               Cost of                                Kilowatt hours                employees         equipment                       square feet Machining                       600                               20                   K10,000…

Goodwill LLC manufacturing two products, A and B. The company currently adopts traditional method of charging overheads to the products based on labour hours. The company now wishes to adopt the Activity Based Costing method of allocating overheads, to do its product costing accurately. The company furnishes the following data for a year:     Product A Product B Direct material  @ RO 5 per Kg 6 Kgs 5 Kgs Direct Labour  @ RO 10 per hour 4.5 hours 5 hours   Product Annual Output (units) Total machine hours Total number of purchase orders Total number of set ups A 100 500 50 5 B 75 700 40 10   The annual overheads are as under: Volume related activity costs                         RO 20,000 Set up related costs                                         RO 15,000 Purchase related costs                                     RO 35,000 Total                                       RO 70,000 Based on the above information,…

Requ Gable Company uses three activity cost pools. Each pool has a cost driver. Information for Gable Company follows: Activity Cost Pools Machining Designing costs Setup costs Number of machine hours Number of design hours Number of batches Suppose that Gable Company manufactures three products, A, B, and C. Information about these products follows: Product A Product B Product C 26,000 2,800 40 Total Cost of Pool Cost Driver $250,600 Number of machine hours 61,600 Number of design hours 66,402 Number of batches Product A Product B Product C Total Overhead Assigned 36,000 1,600 170 Estimated Cost Driver 71,600 7,000 465 9,600 2,600 255 Required: 1. Using activity proportions, determine the amount of overhead assigned to each product. (Do not round your intermediate calculations. Round your final answers to nearest whole number.)

Using the following information for question 8-10 Honeydew Company produces two products, a high-end laptop computer under the label Bunsen Laptops, and an inexpensive desktop computer under the label Beaker Computers. The two products use two overhead activities, with the following costs: Setting up equipment Machining $2,000 12,000 The controller has collected the expected annual prime costs for each product, the machine hours, the setup hours, and the expected production. Direct Labor Direct Materials Expected Production in Units Machine hours Setup hours 8. Calculate Beaker's consumption ratio for setup hours. a. 0.50 b. 0.45 c. 0.90 d. 0.25 Bunsen Beaker $20,000 $5,000 15,000 4,000 2,000 2,000 750 1,500 50 50

You have been given the following information about the production of Tamarisk Co., and are asked to provide the factory manager with information for a meeting with the vice-president of operations:     Standard Cost Card   Direct materials (6.00 kg at $3.20 per kilogram)   $19.20   Direct labour (0.70 hours at $4.50)   3.15   Variable overhead (0.70 hours at $3.20 per hour)   2.24   Fixed overhead (0.70 hours at $7.00 per hour)   4.90       $29.49   The following is a production report for the most recent period of operations:         Variances Costs   TotalStandard Cost   Price/ Rate   Spending/Budget   Quantity/Efficiency   Volume Direct materials   $374,400   $5,997 F         $9,408 U       Direct labour   61,425   2,990 U         5,850 U       Variable overhead   43,680         $1,020 F   ?         Fixed overhead   95,550         410 F         $14,000 U What was the…

of 3 bok nt ant ences 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 $ 222,420 55,900 72,726 Product A Product B Product C Cost Driver Number of machine hours Number of design hours Number of batches Suppose that Gable Company manufactures three products, A. B, and C. Information about these products follows: Product A 24,000 Product C 9,400 2,600 60 2,400 265 Total Overhead Assigned Product B 34,000 1,500 180 Required: 1. Using activity proportions, determine the amount of overhead assigned to each product. Note: Do not round your intermediate calculations. Round your final answers to nearest whole number. Estimated Cost Driver 67,400 6,500

please answer within the format by providing formula the detailed workingPlease provide answer in text (Without image)Please provide answer in text (Without image)Please provide answer in text (Without image)   Churchill Products is considering updating its cost system to an activity-based costing system and is interested in understanding the effects. The company’s cost accountant has identified three overhead cost pools along with appropriate cost drivers for each pool.   Cost Pools Costs Activity Drivers Utilities $ 315,000   63,000 machine-hours Scheduling and setup   300,000   600 setups Material handling   795,000   1,590,000 pounds of material     The company manufactures three models of water basins (Oval, Round, and Square). The plans for production for the next year and the budgeted direct costs and activity by product line are as follows.     Products   Oval Round Square Total direct costs (material and labor) $ 80,000   $ 70,000   $ 80,000   Total…

QUESTION 1C (TOPIC 3)   North Network Sdn Bhd (NNSB) makes custom made furniture from quality woods. The company uses a job-order costing system and predetermined overhead rates to apply manufacturing overhead cost to jobs. Currently, NNSB uses a plantwide overhead rate based on direct labor costs in estimating the company manufacturing overhead. The following estimated data have been made by NNSB at the beginning of the year 2018:     Department Costs Designing Machining Furnishing Direct labor hours 30,000 60,000 40,000 Machine hours 20,000 40,000 30,000 Direct labor costs RM150,000 RM100,000 RM200,000 Direct materials costs RM190,000 RM400,000 RM250,000 Manufacturing overhead costs  RM270,000 RM400,000 RM50,000 Job 118 was started on 1 January 2018 and completed on 28 February 2018. NNSB’s cost records shown the following information on the Job 118:     Department Costs Designing Machining…

Ole Company manufactures two products, Product A and Product B. Currently, machine hours are used to allocate the overhead costs to the two products. Ole Company is considering adopting an activity-based costing system. If so, overhead costs will be traced to the following activities: Activities Machining Quality Control Material Moves Activity cost pools $300,000 $200,000 $400,000 Cost Drivers Machine Hours Number of inspections Number of moves Product A 30,000 400 2,000 Product B 20,000 600 6,000 (a) Calculate the total overhead cost assigned to Product A under the current system. (b) Calculate the total overhead cost for Product A if the company implements activity-based costing system. (c) Briefly explain which costing method gives a more accurate picture of the costs. (d) Suppose you are the management accountant in a university. List any three (3)activities commonly carried out in universities and identify an appropriate cost driver for each activity.

Rex Industries has identified three different activities as cost drivers: machine setups, machine hours, and inspections. The overhead and estimated usage are: Compute the overhead rate for each activity. Round your answers to two decimal places. Activity Overheadper Activity AnnualUsage OverheadRate perActivity Machine Setups $156,825      4,100      $fill in the blank 1      Machine Hours 352,750      14,110      $fill in the blank 2      Inspections 110,550      3,300      $fill in the blank 3

Mayron Industries manufactures dining chairs and tables. The following information is available:                                                      Dining Chairs       Tables          Total Overhead Cost             Machine setups                    200                  600              $48,000             Inspections                           250                  470              $72,000             Labor hours                         2,600               2,400 Mayron is considering switching from Traditional Costing based on labor hours to activity-based costing. 1.Assign total overhead costs to Tables using Traditional Costing 2.Assign total overhead costs to Dining Chairs using Activity Based Costing 3.Assign total overhead costs to Dining Chairs using Traditional Costing.

You have been given the following information about the production of Lisa Co., and are asked to provide the factory manager with information for a meeting with the vice president of operations. Standard Cost Card Direct materials (6 pounds at $5 per pound) $30.00 Direct labor (0.8 hours at $10) 8.00 Variable overhead (0.8 hours at $3 per hour) 2.40 Fixed overhead (0.8 hours at $7 per hour) 5.60 $46.00 The following is a variance report for the most recent period of operations. Variances Costs Total Standard Cost Price Quantity Direct materials $405,000 $8,296 F $9,800 U Direct labor 108,000 5,775 U 7,500 U

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…

Mayron Industries manufactures dining chairs and tables. The following information is available: Dining Chairs Tables Total Overhead Cost Machine setups 200 600 $48,000 Inspections 250 470 $72,000 2,600 2,400 Labor hours Mayron is considering switching from Traditional Costing based on labor hours to activity- based costing. Assign total overhead costs to Tables using Traditional Costing. $37,000 $83,000 O $62,400 O $57,600 $120,000

After reading an article about activity-based costing in a trade journal for the furniture industry, Santana Rey wondered if it was time to critically analyze overhead costs at Business Solutions. In a recent month, Santana found that setup costs, inspection costs, and utility costs made up most of its overhead. Additional information about overhead follows.  Activity   Cost   Driver Setting up machines $ 22,410   27 batches Inspecting components $ 4,600   4,600 parts Providing utilities $ 9,200   4,600 machine hours   Overhead has been applied to output at a rate of 40% of direct labor costs. The following data pertain to Job 615.          Direct materials $ 2,100   Direct labor $ 3,800   Batches   2 batches Number of parts   490 parts Machine hours   570 machine hours   1. Classify each of its three overhead activities as unit level, batch level, product level, or facility level.     2. What is the total cost of Job 615 if Business Solutions applies…

Drilling Company uses activity-based costing and provides this information: Driver Rate Manufacturing Activity Materials handling Machinery Assembly Inspection Cost Driver Drilling has just completed 74 units of a component for a customer. Each unit required 94 parts and 2.70 machine hours. The prime cost is $1,240 per finished unit. All other manufacturing costs are classified as manufacturing overhead. Required 1 Number of parts Number of machine hours Number of parts Number of finished units Required: 1. Compute the total manufacturing costs and the unit costs of the 74 units just completed using ABC costing. 2. In addition to the manufacturing costs, the firm has determined that the total cost of upstream activities, including research and development and product design, is $174 per unit. The total cost of downstream activities, such as distribution, marketing, and customer service, is $294 per unit. Compute the full product cost per unit, including upstream, manufacturing, and…

Carlise has identified the following information about its overhead activity pools and the two product lines: Cost Assigned to Pool $ 20,910 $ 85,120 $ 34,790 Activity Pools Materials handling Quality control Machine maintenance Cost Driver Number of moves Number of inspections Number of machine hours Quantity or Amount Consumed by Quantity or Amount Consumed by Indoor Line Outdoor Line Complete this question by entering your answers in the tabs below. Indoor Model Outdoor Model Total Required: 1. Suppose Carlise used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. 2. Calculate the activity proportions for each activity pool in Carlise's ABC system. 3. Calculate the amount of overhead that Carlise will assign to the Indoor line if it uses an ABC system. 4. Determine the amount of overhead Carlise will assign to the Outdoor line if it uses an ABC system. 5. Compare the results for a traditional system…

Shine Ltd manufactures two products, Exe and Zed. Currently, overheads are apportioned using a traditional absorption costing basis. You are the cost accountant and from the class discussion on activity based costing (ABC), you are considering its implementation in your company for the purposes of charging overheads to production. The following information has been provided: Type of cost Amount Current basis Volume related costs Sh. 600,000 Machine hours Purchasing related cost Sh.420,000 Labour hours Set-up costs Sh. 360,000 Labour hours   Extracts from the standard costs show the following:   EXE ZED Labour hours per unit 4 2 Machine hours per unit 2 2 Budgeted production next year 20,000 10,000 Number of purchase orders per annum 150 60 Number of machine set-up per annum 70 50       Required: Under traditional absorption costing, determine the overhead charged to product Zed?…

Shine Ltd manufactures two products, Exe and Zed. Currently, overheads are apportioned using a traditional absorption costing basis. You are the cost accountant and from the class discussion on activity based costing (ABC), you are considering its implementation in your company for the purposes of charging overheads to production. The following information has been provided: Type of cost Amount Current basis Volume related costs Sh. 600,000 Machine hours Purchasing related cost Sh.420,000 Labour hours Set-up costs Sh. 360,000 Labour hours   Extracts from the standard costs show the following:   EXE ZED Labour hours per unit 4 2 Machine hours per unit 2 2 Budgeted production next year 20,000 10,000 Number of purchase orders per annum 150 60 Number of machine set-up per annum 70 50       Required: Using ABC system, determine the overheads charged to product Exe, under purchase related costs?…

Splish Brothers is a trucking company. It provides local, short-haul, and long-haul services. It has developed the following three cost pools. Activity Cost Pool   Cost Drivers   EstimatedOverhead   Estimated Use ofCost Driverper Activity Loading and unloading   Number of pieces   $97,130   88,300 Travel   Miles driven   443,250   591,000 Logistics   Hours   82,880   2,960 (a)     Compute the activity-based overhead rates for each pool. (Round answers to 2 decimal places, e.g. 12.75.) Activity Cost Pool   Activity-BasedOverhead Rate   Loading and unloading     per piece Travel     per mile Logistics     per hour Please fill in the table.