2. Traditional Costing vs. ABC CPA Company incurs P 800,000 in manufacturing overhead costs. The company has been allocating overhead to individual product lines based on direct labor hours. Cost Driver Direct labor hours Number of batches Amount in Cost Pool P 300,000 300,000 200,000 Number of shipments Total overhead costs P 800,000 Two products have the following characteristics: Direct labor hours Number of batches Number of shipments Product X 2,000 24 2 Amount of Activity 40,000 1,000 500 Product Y 1,000 30 150 REQUIRED: Determine the overhead costs to be allocated to each product (X and Y) using: A) Traditional costing (based on direct labor hours) B) Activity-based costing (ABC)

2. Traditional Costing vs. ABC CPA Company incurs P 800,000 in manufacturing overhead costs. The company has been allocating overhead to individual product lines based on direct labor hours. Cost Driver Direct labor hours Number of batches Amount in Cost Pool P 300,000 300,000 200,000 Number of shipments Total overhead costs P 800,000 Two products have the following characteristics: Direct labor hours Number of batches Number of shipments Product X 2,000 24 2 Amount of Activity 40,000 1,000 500 Product Y 1,000 30 150 REQUIRED: Determine the overhead costs to be allocated to each product (X and Y) using: A) Traditional costing (based on direct labor hours) B) Activity-based costing (ABC)

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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Exercise 7-4 (Algo) Second-Stage Allocation [LO7-4] Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Machine processing Machine setups Number of units produced per year Direct labor-hours Activity Rate $ 11 per direct labor-hour $5 per machine-hour $ 45 Production orders Shipments $ 120 per shipment Product sustaining $ 900 per product Activity data have been supplied for the following two products: Machine-hours Machine setups Production orders Shipments Product sustaining per setup $ 160 per order Total Expected Activity K425 M67 2,000 200 1,025 2,600 7 7 14 3 50 40 3 3 3 3 Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system?
Direct materials per unit Direct labor cost per unit Direct labor-hours per unit Estimated annual production and sales Estimated total manufacturing overhead Estimated total direct labor-hours $ 64.20 $ 17.60 Activity Cost Pools and (Activity Measures) Supporting direct labor (direct labor-hours) 1.4 DLHS 19,000 units The company has a conventional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below: Batch setups (setups) Product sustaining (number of products) General factory (machine-hours) Total manufacturing overhead cost $50.40 $ 12.40 1 DLHs 69,000 units $1,854,640 95,600 DLHs Required: 1-a. Compute the predetermined overhead rate based on direct labor-hours. 1-b. Using the predetermined overhead rate and other data from the problem, determine the unit product cost of each product. 2. The company is considering replacing its conventional…
Godiva company has two products, A and B. The company uses activity-based costing to allocate overhead costs of $100,000. Data relating to the company's activity pools for the current year are given below: Cost Pool Total cost in Total Number of Activity Measures Used Cost Pool Product A Product B Total Activity 1 $42,000 100 200 300 Activity 2 $10,000 20 5 25 Activity 3 $48,000 3,000 3,000 6,000 Compute the activity rate (allocation rate) for Activity 2: $500 $2,000 $400 $140
The XYZ Company uses Standard costing system. Following data are taken from its cost record.STANDARD ACTUALDirect Material Rate per unit Rs. 10 Rate per unit Rs. 12Total Cost Rs. 80,000 Quantity 8,600 unitsDirect Labour Wages per hour Rs. 40 Wages per hour Rs. 30Total labour hours 600 Total labour cost Rs. 16,500Factory Overhead 90% of Direct labour Rs. 20,000Required:1] Compute the Following. a) Material Price Varianceb) Material Quantity Variance c) Labour Rate Varianced) Labour efficiency variance e) Overhead Variance
Gold Company uses a plantwide overhead rate with machine hours as the allocation base. Use the following information to solve for the amount of machine hours estimated per unit of product RST. Direct material cost per unit of RST Total estimated manufacturing overhead Total cost per unit of RST Total estimated machine hours, Direct labor cost per unit of RST $ 19 $308,000 $ 84 154,000 MH 27 $
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Schwiesow Corporation has provided the following information: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Sales commissions Multiple Choice O $14,750 Variable administrative expense Fixed selling and administrative expense If 4,500 units are produced, the total amount of manufacturing overhead cost is closest to:
A Cothing Manufacturing Company provides the following unit costs associated with one of its products: Direct materials. Direct manufacturing labor Variable manufacturing overhead Fixed manufacturing overhead Operating costs Total $160 50 55 32 30 $327 What are the period costs per unit associated with the Product? O A $30 O B. $33 OC. $100 O D. $17
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Please only answer the total amount of fixed manufacturing overhead.
1. Company A produces two products H and L. Both are produced on the same equipment and use similar processes. The products differ by volume. Product H is a high volume product while L is a low volume product. Details of product inputs, output and the cost of activities are as follows: Product Machine Hour per unit Direct Annual Total Total No of No Labor Output (Units) Machine Direct Purchase of Hour Hours Labor Orders Set Hours Ups per unit L 4 1000 2000 4000 80 40 H 2 4 10000 20000 40000 160 60 11000 22000 44000 240 100 The cost centers cots (Overheads) are RO 440000 but have been further analyzed as follows: Volume related RO 110000 Purchasing related RO 120000 Set up related RO 210000 Calculate overhead cost under: a. Traditional volume based costing system b. ABC system
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