cialHomeInsertPage LayoutFormulasADataReviewView0000CH.Cause-and-Effect Relationship BetweenAllocation Base and Activity CostStandard Job Special Job1Total2 Number of printing jobs3 Price per job4 Cost of supplies per job5 Direct labor costs per job6 Printing machine-hours per job7 Cost of printing machine operations400200$ 600$1002$$ 750$ 125$901001010$ 75,000 Indirect costs of operating printing machinesincrease with printing machine-hours8.9 Setup-hours per job10 Setup costs11 Total number of purchase orders12 Purchase order costs47$ 45,000 | Indirect setup costs increase with setup-hourslugmos400500$ 18,000 Indirect purchase order costs increase withnumber of purchase orders$ 20,000 Design costs are allocated to standard and specialjobs based on a special study of the design13nead cost per$4,000$16,00014 Design costs15departmentMarketing costs as a percentage of16revenuesng system to$ 19,500$ 24,000 Demand for administrative resources increases5%5%wopuilds build-imple cost-n 2017. Oneompetitive.foverheadne gathers17 Administration costswith direct labor costsChps19Required1. Calculate the cost of a standard job and a special job under the simple costing system.2. Calculate the cost of a standard job and a special job under the activity-based costing system.3. Compare the costs of a standard job and a special job in requirements 1 and 2. Why do the simple andactivity-based costing systems differ in the cost of a standard job and a special job?4. How might Speediprint use the new cost information from its activity-based costing system to bettermanage its business?sed byn Ordinary 5-25 Activity-based costing, service company. Speediprint Corporation owns a small printing press thatprints leaflets, brochures, and advertising materials. Speediprint classifies its various printing jobs as stan-dard jobs or special jobs. Speediprint's simple job-costing system has two direct-cost categories (directmaterials and direct labor) and a single indirect-cost pool. Speediprint operates at capacity and allocatestherefore is planning to implement an activity-based costing system. Speediprint's ABC system wouldSpeediprint is concerned about the accuracy of the costs assigned to standard and special jobs and4.Direct maProductiin that department?Materialmaterials and direct labor) and a single indirect-cost pool. Speediprint operates at capacity and a tairectall indirect costs using printing machine-hours as the allocation base.Speediprint is concerned about the accuracy of the costs assigned to standard and special iobeMachineMachineNumberhave the same direct-cost categories as its simple costing system. However, instead of a single indicost pool there would now be six categories for assigning indirect costs: design, purchasing, setup nrinting machine operations, marketing, and administration. To see how activity-based costing would afferthe costs of standard and special jobs, Speediprint collects the following information for the fiscal vear2017 that just ended.The owners have hearsystem and are curiouthe indirect-cost poolproduction schedulingDoors collected the for

Traditional costing system: It is a method of allocation of overhead to the products. Under this method the overhead is assigned to products on the basis of a pre-determined overhead allocation rate. Under this method all the overheads incurred are considered as a single cost pool and a single cost driver is used to allocate the overheads. Activity based costing system: It is precise method of allocation of overhead to the products. Under this method the overhead costs are assigned to the activities concerned and then they are allocated to cost objects which use such activities.In case of multiple sub-parts only first 3 sub-parts will be answered. If you want other sub-parts to be answered, please post the entire question again and mention the sub-parts to be answered.

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5-25 Activity-based costing, service company. Speediprint Corporation ówns a small printing press that prints leaflets, brochures, and advertising materials. Speediprint classifies its various printing jobs as stan- dard jobs or special jobs. Speediprint's simple job-costing system has two direct-cost categories (direct materials and direct labor) and a single indirect-cost pool. Speediprint operates at capacity and allocates in that dep all indirect costs using printing machine-hours as the allocation base. Speediprint is concerned about the accuracy of the costs assigned to standard and special jobs and therefore is planning to implement an activity-based costing system. Speediprint's ABC system would have the same direct-cost categories as its simple costing system. However, instead of a single indirect cost pool there would now be six categories for assigning indirect costs: design, purchasing, setup. nri ing machine operations, marketing, and administration. To see how activity-based costing would affer the costs of standard and special jobs, Speediprint collects the following information for the fiscal veay 2017 that just ended.

5-25 Activity-based costing, service company. Speediprint Corporation ówns a small printing press that prints leaflets, brochures, and advertising materials. Speediprint classifies its various printing jobs as stan- dard jobs or special jobs. Speediprint's simple job-costing system has two direct-cost categories (direct materials and direct labor) and a single indirect-cost pool. Speediprint operates at capacity and allocates in that dep all indirect costs using printing machine-hours as the allocation base. Speediprint is concerned about the accuracy of the costs assigned to standard and special jobs and therefore is planning to implement an activity-based costing system. Speediprint's ABC system would have the same direct-cost categories as its simple costing system. However, instead of a single indirect cost pool there would now be six categories for assigning indirect costs: design, purchasing, setup. nri ing machine operations, marketing, and administration. To see how activity-based costing would affer the costs of standard and special jobs, Speediprint collects the following information for the fiscal veay 2017 that just ended.

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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Direct Labor wage rate is $ 30 per hour. a) Compute total cost per unit (for lambda and gamma) using traditional plantwide approach. (round your numbers) b) Compute total cost per unit (for lambda and gamma) using activity-based approach. (round your numbers)
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MFCB Ltd uses an activity-based costing system for its overhead costs. The company has provided the following data from its activity-based costing system. Activity Cost Pool Total Cost (RM) Total Activity Cleaning 442,068 78,800 hours Job support 52,801 1,900 jobs Client support 9,170 350 clients Other 110,601 Not applicable Total 614,640 The expenses of idle capacity and organization-sustaining expenditures are included in the 'Other' activity cost pool. One particular client, DNO Ltd, requested 46 jobs during the year that required a total of 92 hours of housecleaning. For this service, the client was charged RM2,230. TASK: Compute the predetermined overhead rate if the company chooses cleaning hours as the allocation base.
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Helm Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity based costing system: Costs: Manufacturing overhead Selling and administrative expenses Total Distribution of resource consumption: Manufacturing overhead Selling and administrative expenses $304,500 $493,000 Activity Cost Pools Customer Support 85% 20% O $116,000 O $428,000 Order Size 5% 60% S S Other 10% 20% The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. You have been asked to complete the first-stage allocation of costs to the activity cost pools. How much cost, in total, would be allocated in the first-stage allocation to the Customer Support activity cost 480,000 100,000 580,000 Total 100% 100%
Speedy Auto Repairs uses a job-order costing system. The company's direct materials consist of replacement parts installed in customer vehicles, and its direct labor consists of the mechanics' hourly wages. Speedy's overhead costs include various items, such as the shop manager's salary, depreciation of equipment, utilities, insurance, and magazine subscriptions and refreshments for the waiting room. The company applies all of its overhead costs to jobs based on direct labor-hours. At the beginning of the year, it made the following estimates: Direct labor-hours required to support estimated output Fixed overhead cost Variable overhead cost per direct labor-hour 24,000 $ 288,000 $ 1.00 Required: 1. Compute the predetermined overhead rate. 2. During the year, Mr. Wilkes brought in his vehicle to replace his brakes, spark plugs, and tires. The following information was available with respect to his job: $ 615 $208 9 Direct materials Direct labor cost Direct labor-hours used Compute Mr.…
Job Order Cost Accounting for a Service Company The Fly Company provides advertising services for clients across the nation. The Fly Company is presently working on four projects, each for a different client. The Fly Company accumulates costs for each account (client) on the basis of both direct costs and allocated indirect costs. The direct costs include the charged time of professional personnel and media purchases (air time and ad space). Overhead is allocated to each project as a percentage of media purchases. The predetermined overhead rate is 40% of media purchases. On August 1, the four advertising projects had the following accumulated costs: August 1 Balances Vault Bank $86,800 Take Off Airlines 26,000 Sleepy Tired Hotels 60,800 Tastee Beverages 37,300 Total $210,900 During August, The Fly Company incurred the following direct labor and media purchase costs related to preparing advertising for each of the four accounts: Direct Labor Media Purchases Vault Bank $57,800 $232,800…
Speedy Auto Repairs uses a job-order costing system. The company’s direct materials consist of replacement parts installed in customer vehicles, and its direct labor consists of the mechanics’ hourly wages. Speedy’s overhead costs include various items, such as the shop manager’s salary, depreciation of equipment, utilities, insurance, and magazine subscriptions and refreshments for the waiting room. The company applies all of its overhead costs to jobs based on direct labor-hours. At the beginning of the year, it made the following estimates: Direct labor-hours required to support estimated output 40,000 Fixed overhead cost $ 640,000 Variable overhead cost per direct labor-hour $ 1.00 Required: 1. Compute the predetermined overhead rate. 2. During the year, Mr. Wilkes brought in his vehicle to replace his brakes, spark plugs, and tires. The following information was available with respect to his job: Direct materials $ 707 Direct labor cost $ 230 Direct…
Job Order Cost Accounting for a Service Company The Fly Company provides advertising services for clients across the nation. The Fly Company is presently working on four projects, each for a different client. The Fly Company accumulates costs for each account (client) on the başis of both direct costs and allocated indirect costs. The direct costs include the charged time of professional personnel and media purchases (air time and ad space). Overhead is allocated to each project as a percentage of media purchases. The predetermined overhead rate is 50% of media purchases. On August 1, the four advertising projects had the following accumulated costs: August 1 Balances Vault Bank $68,700 Take Off Airlines 20,600 Sleepy Tired Hotels 48,100 Tastee Beverages 29,500 Total $166,900 During August, The Fly Company incurred the following direct labor and media purchase costs related to preparing advertising for each of the four accounts: Direct Labor Media Purchases Vault Bank $46,100 $173,800…
Job Order Cost Accounting for a Service Company The Fly Company provides advertising services for clients across the nation. The Fly Company is presently working on four projects, each for a different client. The Fly Company accumulates costs for each account (client) on the basis of both direct costs and allocated indirect costs. The direct costs include the charged time of professional personnel and media purchases (air time and ad space). Overhead is allocated to each project as a percentage of media purchases. The predetermined overhead rate is 60% of media purchases. On August 1, the four advertising projects had the following accumulated costs: August 1 Balances Vault Bank $72,500 Take Off Airlines 21,800 Sleepy Tired Hotels 50,800 Tastee Beverages 31,200 Total $176,300 During August, The Fly Company incurred the following direct labor and media purchase costs related to preparing advertising for each of the four accounts: Direct Labor Media…