A company selts two types of products: standard and deluxe. It prepares the following analysis showing budgeted cost and cost driver activity for each of its three activities Budgeted Activity Usage Deluxe 2,800 200 Total 5,800 Activity Factory services Setup Quality control Budgeted Cost $ 104, 400 $ 11,500 5 116,250 Activity Cost Driver Square feet Setups Units Inspected Standard 3,000 300 2, 500 500 5,250 7,750 Compute an activityrate for each activity using activity-based costing. Activity Budgeted Cost Budgeted Activity Usage Activity Rate 104 400 Factory services Setup 11.500 Quality control 116,250

A company selts two types of products: standard and deluxe. It prepares the following analysis showing budgeted cost and cost driver activity for each of its three activities Budgeted Activity Usage Deluxe 2,800 200 Total 5,800 Activity Factory services Setup Quality control Budgeted Cost $ 104, 400 $ 11,500 5 116,250 Activity Cost Driver Square feet Setups Units Inspected Standard 3,000 300 2, 500 500 5,250 7,750 Compute an activityrate for each activity using activity-based costing. Activity Budgeted Cost Budgeted Activity Usage Activity Rate 104 400 Factory services Setup 11.500 Quality control 116,250

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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A manufacturer uses activity-based costing to assign overhead cost to products. Budgeted cost information for its activities follows. Budgeted Cost $ 210,600 Activity Cost Driver Purchase orders Square feet Budgeted Activity Usage 5,400 purchase orders 5,900 square feet 50 Setups Factory services 104,250 Setup 67,750 Setups Compute an activity rate for each activity. (Round your answers to 2 decimal places.) Activity Purchasing Activity Purchasing Factory services Setup Budgeted Cost 210,600 104,250 67,750 $ $ $ Budgeted Activity Usage Activity Rate
An activity based costing system is being considered at Evelia, nv to assign products overhead costs; these overhead costs are currently assigned strictly by number of units produced. First, the two overhead costs of Rent expense and Insurance expense would be allocated to three activity cost pools - Finishing, Sanding, and Other - based on resource consumption. The information used to perform these allocations is below: Overhead Costs: Rent expense: $2,000,000 Insurance expense: $1,650,000 Distribution of Resource Consumption across Activity Cost Pools: Overhead Cost Activity Cost Pools Finishing Sanding Other Rent expense 0.45 0.25 0.30 Insurance expense 0.20 0.35 0.45 In the second stage, Finishing costs would be assigned to products using direct labor hours and Sanding costs would be assigned to products using the number of machine hours. The costs in the Other activity pool would not be assigned to products. Activity data for the company's two products is as…
Data concerning three of Kilmon Corporation’s activity cost pools appear below: Activity Cost Pools Estimated Overhead Cost Expected Activity Assembling products $ 65,540 4,520 assembly hours Designing products $ 578,112 3,011 product design hours Setting up batches $ 41,820 820 batch set-ups Required: Compute the activity rates for each of the three cost pools. (Round your answers to 2 decimal places.) Activities Activity rate Assembly products Designing products Setting up batches
Marissa Co., the consultant of Marisol Co. had summarized the following standard cost data extracted from the historical recordsa and performance reports issued by the cost accounting department in the prior year to assist in her analysis and evaluation of the standard costing policy of the company: Input required per unit Standard cost per unit Standard cost per unit Direct Materials 6 kg per unit P90 per kg P540 Direct Labor 5 hrs per unit P50 per hr P250 Other information follows: Budgeted factory overhead for the year: Variable 480,000 Fixed 600,000 The company's normal capacity per month is 400 units Actual cost materia;s purchased for the year is P2,342,000 During the year, direct materials purchased is 26,880 kg while direct materials actually used is 24,760 kgs Actual labor costs for the year 1,080,000 of which 24,900 direct labor hours was consumed Actual factory overhead amounted to 1,320,000, 65% of which is fixed cost, FOH is based on labor hours…
The following information is available for ABC Co.: Activity Pool Setups Quality Inspection Assembly (direct labor hours) Budgeted Amount 300,000 Activity Base 400,000 600,000 120,000 2,000,000 400,000 Compute for the activity rate for set up? A. 0.75 B. 5.09 C. 6.00 D. 58.00 QRS Co. produces three products. Production and cost information show the following: PRODUCTS S Units Produced 50,000 150,000 300,000 Direct labor Number of inspections 100,000 50,000 100,000 100 300 600 The consumption ratio based on the number of inspections would be, respectively. A. 20%, 30% and 50% B. 40%, 20% and 40% C.10%, 30% and 60% D. Equally
Gable Company uses three activity cost pools. Each pool has a cost driver. Information for Gable Company follows: Activity Cost Pools Total Cost of Pool Cost Driver Estimated Cost Driver Machining $ 250,000 Number of machine hours 84,900 Designing costs 56,000 Number of design hours 7,200 Setup costs 80,000 Number of batches 360 How do you find the activity rate?
Activity Rates and Product Costs using Activity-Based Costing Lonsdale Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budget activity costs and activity bases are as follows: Budgeted Activity Activity Cost Activity Base Casting $330,560 Machine hours Assembly 212,040 Direct labor hours Inspecting 26,100 Number of inspections Setup 39,000 Number of setups Materials handling 39,990 Number of loads Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow: Activity Base Entry Dining Total Machine hours 5,470 4,860 10,330 Direct labor hours 4,710 7,070 11,780 Number of inspections 1,320 420 1,740 Number of setups 210 50 260 Number of loads 730 200 930 Units produced 10,800 5,400 16,200 a. Determine the activity rate for each activity. If required, round the rate to the…
Carla Vista Industries has three activity cost pools and two products. It expects to produce 2,700 units of Product SZ09 and 1,400 of Product NZ16. Having identified its activity cost pools and the cost drivers for each pool, Carla Vista accumulated the following data relative to those activity cost pools and cost drivers. question: Assign the overhead cost to the two products: SZ09$? and NZ16$?
Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment Number of setups Ordering costs Number of orders Machine costs Receiving Direct materials Direct labor Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Units completed Direct labor hours Number of setups Number of orders $627,000 481,000 16,200 6,400 370 5,800 24,900 3,700 The company's normal activity is 7,900 direct labor hours. Machine hours Receiving hours Required: Model A Model B $482,510 372,000 864,000 410,000 Receiving hours Model A Machine hours $ del B Model B Unit Cost $836,000 497,000 8,500 1,500 240 1. Determine the unit cost for each model using direct labor hours to apply overhead. Round intermediate calculations and final answers to nearest cent. 12,800 18,300 6,300 610 18,600 43,200 10,000 2. Determine the unit cost for…
A company reports the following budgeted overhead costs and budgeted cost driver activity. Activity (Cost driver) Quality (number of units inspected) Factory services (square feet) Purchasing (number of orders) Activity Quality Factory services Purchasing Budgeted Cost $ 52,116 $ 123,216 $ 17,472 Use activity-based costing to compute the activity rate for each activity. Note: Round your "Activity Rate" to 2 decimal places. Budgeted Cost $ 52,116 123,216 17,472 Budgeted Activity of Cost Driver Standard Deluxe Total 3,180 860 3,820 2,220 188 228 Budgeted Activity Usage Activity Rate 4,040 6,040 416
Activity-Based Product Costing Sweet Sugar Company manufactures three products (white sugar, brown sugar, and powdered sugar) in a continuous production process. Senior management has asked the controller to conduct an activity-based costing study. The controller identified the amount of factory overhead required by the critical activities of the organization as follows: Activity Budgeted Activity Cost Production $462,000 Setup 289,100 Inspection 142,400 Shipping 129,000 Customer service 51,200 Total $1,073,700 The activity bases identified for each activity are as follows: Activity Activity Base Production Machine hours Setup Number of setups Inspection Number of inspections Shipping Number of customer orders Customer service Number of customer service requests The activity-base usage quantities and units produced for the three products were determined from corporate records and are as follows: Machine Hours Number…
Pleasant Stay Medical Inc. wishes to determine its product costs. Pleasant Stay offers a variety of medical procedures (operations) that are considered its “products.” The overhead has been separated into three major activities. The annual estimated activity costs and activity bases follow: Activity Budgeted Activity Cost Activity Base Scheduling and admitting $432,000 Number of patients Housekeeping 4,212,000 Number of patient days Nursing 5,376,000 Weighted care unit Total costs $10,020,000 Total “patient days” are determined by multiplying the number of patients by the average length of stay in the hospital. A weighted care unit (wcu) is a measure of nursing effort used to care for patients. There were 192,000 weighted care units estimated for the year. In addition, Pleasant Stay estimated 6,000 patients and 27,000 patient days for the year. (The average patient is expected to have a a little more than a…