Chapter 6: A Closer Look on Cost AccountingThe company makes 2,350 units of product X a year, requiring a total os3.300 machine hours, 250 orders and 200 inspection hours per year. Theproduct's direct material cost is P201.50 and its direct labor cost inP211.11 per unit. The product sells for P590 per unit. According to theactivity-based costing system, the gross margin for product X is?423,087.50b. 350,435.50c. 416,890d. None of the choicea.56.The following information is available for Mary Corp.Activity PoolSetupsQuality InspectionsAssembly (direct labor hour)What is the activity rate for setups?Activity Base50,000120,000400,000Budgeted Amount300,000600,0002,000,000a. P5.09c. РО.75d. P58.00b. Рб.00The activity rate for quality inspection is:с. Рб.00d. P5.09a. P5.29b. P5.00

The activity rate is calculated as total budgeted cost of particular activity divided by estimated…

56. The following information is available for Mary Corp. Activity Pool Setups Quality Inspections Assembly (direct labor hour) What is the activity rate for setups? P5.09 Activity Base 50,000 120,000 400,000 Budgeted Amount 300,000 600,000 2,000,000 с. РО.75 d. P58.00 a. b. Рб.00 The activity rate for quality inspection is: c. Р6.00 d. P5.09 a. P5.29 b. P5.00

56. The following information is available for Mary Corp. Activity Pool Setups Quality Inspections Assembly (direct labor hour) What is the activity rate for setups? P5.09 Activity Base 50,000 120,000 400,000 Budgeted Amount 300,000 600,000 2,000,000 с. РО.75 d. P58.00 a. b. Рб.00 The activity rate for quality inspection is: c. Р6.00 d. P5.09 a. P5.29 b. P5.00

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 26E: Starling Co. manufactures one product with a selling price of 18 and variable cost of 12. Starlings...

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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

Chapter 6: A Closer Look on Cost Accounting
The company makes 2,350 units of product X a year, requiring a total os
3.300 machine hours, 250 orders and 200 inspection hours per year. The
product's direct material cost is P201.50 and its direct labor cost in
P211.11 per unit. The product sells for P590 per unit. According to the
activity-based costing system, the gross margin for product X is?
423,087.50
b. 350,435.50
c. 416,890
d. None of the choice
a.
56.
The following information is available for Mary Corp.
Activity Pool
Setups
Quality Inspections
Assembly (direct labor hour)
What is the activity rate for setups?
Activity Base
50,000
120,000
400,000
Budgeted Amount
300,000
600,000
2,000,000
a. P5.09
c. РО.75
d. P58.00
b. Рб.00
The activity rate for quality inspection is:
с. Рб.00
d. P5.09
a. P5.29
b. P5.00

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