23. A plant has two categories of overhead: material handling and quality inspection. The costs expected for these categories for the coming year are as follows: Material handling Quality inspection P 100,000 P 300,000 The plant currently applied overhead using direct labor hours and expected actual capacity. This figure is 50,000 direct labor hours. The plant manager has been asked to submit a bid and has assembled the following data on the proposed budget for the potential job: Direct materials Direct labor Factory overhead Number of material movements Number of inspections P 3,700 P 7,000 10 5 ? The manager has been told that many competitors use an activity-based costing approach to assign overhead to jobs. Before submitting a bid, the manager wants to assess the effects of this alternative approach. The manager estimates that the expected number of material moves for all jobs during the year is 1,000; 5,000 quality inspections are expected to be performed. Assuming the bid price of full manufacturing cost plus 25 percent, what should be the bid under ABC approach? a. P 12,000 b. P 12,325 C. P 15,000 d. P 18,700

23. A plant has two categories of overhead: material handling and quality inspection. The costs expected for these categories for the coming year are as follows: Material handling Quality inspection P 100,000 P 300,000 The plant currently applied overhead using direct labor hours and expected actual capacity. This figure is 50,000 direct labor hours. The plant manager has been asked to submit a bid and has assembled the following data on the proposed budget for the potential job: Direct materials Direct labor Factory overhead Number of material movements Number of inspections P 3,700 P 7,000 10 5 ? The manager has been told that many competitors use an activity-based costing approach to assign overhead to jobs. Before submitting a bid, the manager wants to assess the effects of this alternative approach. The manager estimates that the expected number of material moves for all jobs during the year is 1,000; 5,000 quality inspections are expected to be performed. Assuming the bid price of full manufacturing cost plus 25 percent, what should be the bid under ABC approach? a. P 12,000 b. P 12,325 C. P 15,000 d. P 18,700

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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