2. The company is considering replacing its traditional costing system with an activity-based absorption costing system that would have the following three activity cost pools: Estimated Overhead Cost $ 385,000 132,000 69,000 $ 586,000 Activity Cost Pools (and Activity Measures) Supporting direct labor (direct labor-hours) Batch setups (setups) Safety testing (tests) Total manufacturing overhead cost Determine the unit product costs of the Deluxe and Standard products under the activity-based absorption costing system. Expected Activity Deluxe 7,000 200 30 Standard 70,000 100 70 Total 77,000 300 100

2. The company is considering replacing its traditional costing system with an activity-based absorption costing system that would have the following three activity cost pools: Estimated Overhead Cost $ 385,000 132,000 69,000 $ 586,000 Activity Cost Pools (and Activity Measures) Supporting direct labor (direct labor-hours) Batch setups (setups) Safety testing (tests) Total manufacturing overhead cost Determine the unit product costs of the Deluxe and Standard products under the activity-based absorption costing system. Expected Activity Deluxe 7,000 200 30 Standard 70,000 100 70 Total 77,000 300 100

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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The JAG Company has assembled the following data pertaining to certain costs that cannot be easily identified as either fixed or variable. JAG Company has heard about a method of measuring cost functions called the high-low method and has decided to use it in this situation. The following are data from the most recent periods: Cost Hours $25,000 5,025 25,100 4,000 34,000 7,515 60,370 15,500 38,000 9.500 Required: (a) Using the high-low method, estimate the cost function. Round to two decimal places. Show work to receive partial credit!! (b) Calculate the estimated total costs at an operating level of 6,000 hours. Show work to receive partial credit!!!
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
LockTite Company produces two products, Pretty Safe (PS) and Virtually Impenetrable (VI). The following two tables give pertinent information about these products. Solve, a. What is the cost per unit of Pretty Safe if LockTite uses traditional overhead allocation based on number of units produced? b. What is the cost per unit of Pretty Safe if LockTite uses activity-based costing to allocate overhead?
what is the labor-related activity cost pool per DLH what is the machine-related activity cost pool per MH what is the machine setups activity cost pool per seteup what is the production orders activity cost per order what is the product testing activity cost per test what is the packaging activity cost per package what is the general factory activity cost per DLH
Julio produces two types of calculator, standard and deluxe. The company is currently using a traditional costing system with machine hours as the cost driver but is considering a move to activity-based costing. In preparing for the possible switch, Julio has identified two cost pools: materials handling and setup. The collected data follow: Standard Model Deluxe Model Number of machine hours 25,800 30,800 Number of material moves Number of setups 590 890 70 540 Total estimated overhead costs are $347,100, of which $170,200 is assigned to the material handling cost pool and $176,900 is assigned to the setup cost pool. Required: 1. Calculate the overhead assigned to each product using the traditional cost system. 2. Calculate the overhead assigned to each product using ABC.
Arial Company has two products: A and B. The company uses activity-based costing. The total cost and activity for each of the company's three activity cost pools are as follows: Total Activity Activity Cost Pool Total Cost Product A Product B Total Activity 1 $ 38,000 800 500 1,300 Activity 2 $ 29,040 780 600 1,380 Activity 3 $ 26,600 900 650 1,550 The activity rate under the activity-based costing system for Activity 3 is:
Coronado Inc. has conducted the following analysis related to its product lines, using a traditional costing system (volume-based) and an activity-based costing system. The traditional and the activity-based costing systems assign the same amount of direct materials and direct labor costs. Products Product 540X Product 137Y Product 249S (a) Sales Revenue $210,000 Product 137Y * Your answer is incorrect. Product 540X $ LA LA 166,000 LA 94,000 Product 249S $ Total Costs Traditional $59,000 For each product line, compute operating income using the traditional costing system. 49,000 17,000 160060 131040 ABC 53900 $49,940 34,960 40,100
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