4 Neal Company manufactures computer workstations. The company's three activities and their overhead cost drivers follow. Activity Budgeted Cost Activity Cost Driver Budgeted Activity Usage Machine hours 2,600 machine hours 144,000 Fabrication $ 130,000 Assembly Inspection Direct labor hours 119,000 Units inspected 3,000 direct labor hours 7,000 units Job 101's actual activity usage along with a partial customer profitability report follow. Job 101 Machine Hours 25 MH Direct Labor Hours 30 DLH Units 15 Profitability Report-Job 101 Sales Cost of goods sold Direct materials Direct labor Overhead Gross profit Customer service costs Customer income Required: $ 9,500 $ 2,440 1,250 ? ? ? 1,000 ? 1. Compute activity rates using activity-based costing. 2. Use the results from part 1 to allocate overhead cost to Job 101. 3. Complete the profitability report for Job 101. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute activity rates using activity-based costing. Activity Fabrication Assembly Inspection Budgeted Cost Budgeted Activity Usage Activity Rate
4 Neal Company manufactures computer workstations. The company's three activities and their overhead cost drivers follow. Activity Budgeted Cost Activity Cost Driver Budgeted Activity Usage Machine hours 2,600 machine hours 144,000 Fabrication $ 130,000 Assembly Inspection Direct labor hours 119,000 Units inspected 3,000 direct labor hours 7,000 units Job 101's actual activity usage along with a partial customer profitability report follow. Job 101 Machine Hours 25 MH Direct Labor Hours 30 DLH Units 15 Profitability Report-Job 101 Sales Cost of goods sold Direct materials Direct labor Overhead Gross profit Customer service costs Customer income Required: $ 9,500 $ 2,440 1,250 ? ? ? 1,000 ? 1. Compute activity rates using activity-based costing. 2. Use the results from part 1 to allocate overhead cost to Job 101. 3. Complete the profitability report for Job 101. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute activity rates using activity-based costing. Activity Fabrication Assembly Inspection Budgeted Cost Budgeted Activity Usage Activity Rate
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Neal Company manufactures computer workstations. The company's three activities and their overhead cost drivers follow.
Activity
Budgeted
Cost
Activity Cost Driver
Budgeted Activity Usage
Machine hours
2,600 machine hours
144,000
Fabrication $ 130,000
Assembly
Inspection
Direct labor hours
119,000 Units inspected
3,000 direct labor hours
7,000 units
Job 101's actual activity usage along with a partial customer profitability report follow.
Job 101
Machine Hours
25 MH
Direct Labor Hours
30 DLH
Units
15
Profitability Report-Job 101
Sales
Cost of goods sold
Direct materials
Direct labor
Overhead
Gross profit
Customer service costs
Customer income
Required:
$ 9,500
$ 2,440
1,250
?
?
?
1,000
?
1. Compute activity rates using activity-based costing.
2. Use the results from part 1 to allocate overhead cost to Job 101.
3. Complete the profitability report for Job 101.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3
Compute activity rates using activity-based costing.
Activity
Fabrication
Assembly
Inspection
Budgeted Cost
Budgeted Activity Usage
Activity Rate
<Required 1
Required 2 >
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