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11: Requirements 1. Calculate the cost-allocation rate for each of the activity-cost pools for variable and fixed overhead costs. 2. Calculate the cost of unused capacity for the year. 3. Calculate the total cost for each model, and the cost per unit for each model.

11: Requirements 1. Calculate the cost-allocation rate for each of the activity-cost pools for variable and fixed overhead costs. 2. Calculate the cost of unused capacity for the year. 3. Calculate the total cost for each model, and the cost per unit for each model.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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10/8/2021 Chapter 5 - Homework-sehrish bashir The cost of unused facility rent identified in the preceding step (8) the minimum rate that Bow should charge for the use of the space. The facility rent is a (9) and should (10) the decision to sublet the space. (11) would be beneficial. Before subletting the space, though, Bow's management should (12). 9: Data Table Bow Boards Budgeted Costs for the Year Ended December 31, 2020 Direct materials-Basic boards 291,500 Direct materials-Competition boards 531,300 Direct manufacturing labor-Basic boards Direct manufacturing labor-Competition boards 612,000 Machine setup costs Machine maintenance and utility costs 1,105,000 Indirect labor costs 163,200 Facility rent 167,750 Machine depreciation 30,500 10: Data Table Other information: Basic Competition Units produced 5,300 Machine hours 26,000 Number of setups 006 Direct labor-hours 36,000 11: Requirements 1. Calculate the cost-allocation rate for each of the activity-cost pools for variable and fixed overhead costs. 2. Calculate the cost of unused capacity for the year. 3. Calculate the total cost for each model, and the cost per unit for each model. Bow has the opportunity to sublease the unused factory space to a startup company that will be manufacturing surf apparel. None of Bow's machinery will be used. Is there a minimum annual rent that Bow should charge? Are there other considerations that Bow's management should make prior to offering the space? 4. any
Transcribed Image Text:10/8/2021 Chapter 5 - Homework-sehrish bashir The cost of unused facility rent identified in the preceding step (8) the minimum rate that Bow should charge for the use of the space. The facility rent is a (9) and should (10) the decision to sublet the space. (11) would be beneficial. Before subletting the space, though, Bow's management should (12). 9: Data Table Bow Boards Budgeted Costs for the Year Ended December 31, 2020 Direct materials-Basic boards 291,500 Direct materials-Competition boards 531,300 Direct manufacturing labor-Basic boards Direct manufacturing labor-Competition boards 612,000 Machine setup costs Machine maintenance and utility costs 1,105,000 Indirect labor costs 163,200 Facility rent 167,750 Machine depreciation 30,500 10: Data Table Other information: Basic Competition Units produced 5,300 Machine hours 26,000 Number of setups 006 Direct labor-hours 36,000 11: Requirements 1. Calculate the cost-allocation rate for each of the activity-cost pools for variable and fixed overhead costs. 2. Calculate the cost of unused capacity for the year. 3. Calculate the total cost for each model, and the cost per unit for each model. Bow has the opportunity to sublease the unused factory space to a startup company that will be manufacturing surf apparel. None of Bow's machinery will be used. Is there a minimum annual rent that Bow should charge? Are there other considerations that Bow's management should make prior to offering the space? 4. any
- - 10/8/2021 Chapter 5 - Homework-sehrish bashir 4. Bow Boards manufactures two models of surfboards, Basic and Competition, in a facility in Southern California. In fabrication, machine setup costs are driven by the number of setups, machine maintenance and utility costs increase with the number of machine hours, and indirect labor costs increase with direct labor hours. Facility rent and machine depreciation are fixed, and are the basis of manufacturing capacity. Fixed costs are allocated equally to each unit produced, regardless of model. Currently, Bow uses 80% of its manufacturing capacity. The cost of unused capacity is not assigned to products, but is expensed as a separate line item. For 2020, Bow has budgeted the following: (Click the icon to view the budgeted information.) 10, 10(Click the icon to view other information.) 11 Read the requirements Requirement 1. Calculate the cost-allocation rate for each of the activity-cost pools for variable and fixed overhead costs. Select the formula you will use, then calculate the cost driver rate. (Round the cost driver rates to the nearest cent, $X.XX. "Machine maint & util" = "Machine maintenance and utility costs".) %3D (1) (2) Cost driver rate %3D Machine setups (3) %3D () (5) Machine maint & util Indirect labor costs %3D Facility rent (9) Depreciation (7) Requirement 2. Calculate the cost of unused capacity for the year. The cost of unused capacity for the year = %3D Requirement 3. Calculate the budgeted total cost and the cost per unit for each model. (Use the rates calculated in Requirement 1, as needed, for your computations, and round all total cost amounts to the nearest whole dollar. Enter the cost per unit amounts to the nearest cent, $X.XX.) Basic Competition Direct materials Direct manufacturing labor Machine setup costs Machine maintenance and utilities Indirect labor Facility rent Machine depreciation Budgeted total cost Number of units Budgeted cost per unit Requirement 4. Bow has the opportunity to sublease the unused factory space to a startup company that will be manufacturing surf apparel. None of Bow's machinery will be used. Is there a minimum annual rent that Bow should charge? Are there any other considerations that Bow's management should make prior to offering the space? Start by determining the cost of the unused factility rent. The cost of unused facility rent for the year =
Transcribed Image Text:- - 10/8/2021 Chapter 5 - Homework-sehrish bashir 4. Bow Boards manufactures two models of surfboards, Basic and Competition, in a facility in Southern California. In fabrication, machine setup costs are driven by the number of setups, machine maintenance and utility costs increase with the number of machine hours, and indirect labor costs increase with direct labor hours. Facility rent and machine depreciation are fixed, and are the basis of manufacturing capacity. Fixed costs are allocated equally to each unit produced, regardless of model. Currently, Bow uses 80% of its manufacturing capacity. The cost of unused capacity is not assigned to products, but is expensed as a separate line item. For 2020, Bow has budgeted the following: (Click the icon to view the budgeted information.) 10, 10(Click the icon to view other information.) 11 Read the requirements Requirement 1. Calculate the cost-allocation rate for each of the activity-cost pools for variable and fixed overhead costs. Select the formula you will use, then calculate the cost driver rate. (Round the cost driver rates to the nearest cent, $X.XX. "Machine maint & util" = "Machine maintenance and utility costs".) %3D (1) (2) Cost driver rate %3D Machine setups (3) %3D () (5) Machine maint & util Indirect labor costs %3D Facility rent (9) Depreciation (7) Requirement 2. Calculate the cost of unused capacity for the year. The cost of unused capacity for the year = %3D Requirement 3. Calculate the budgeted total cost and the cost per unit for each model. (Use the rates calculated in Requirement 1, as needed, for your computations, and round all total cost amounts to the nearest whole dollar. Enter the cost per unit amounts to the nearest cent, $X.XX.) Basic Competition Direct materials Direct manufacturing labor Machine setup costs Machine maintenance and utilities Indirect labor Facility rent Machine depreciation Budgeted total cost Number of units Budgeted cost per unit Requirement 4. Bow has the opportunity to sublease the unused factory space to a startup company that will be manufacturing surf apparel. None of Bow's machinery will be used. Is there a minimum annual rent that Bow should charge? Are there any other considerations that Bow's management should make prior to offering the space? Start by determining the cost of the unused factility rent. The cost of unused facility rent for the year =
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