Activity-Based CostingZeus Industries manufactures two types of electrical power units, custom and standard, which involve four factory overhead activities-production setup, procurement, quality control, and materials management. An activity analysis of the overhead revealed the following estimated activitycosts and activity bases for these activities:ActivityActivity CostActivity BaseProduction setup$ 44,000Number of setupsProcurement13,500Number of purchase orders (PO)Quality control97,500Number of inspectionsMaterials management84,000Number of componentsTotal$239,000The activity-base usage quantities for each product are as follows:PurchaseSetupsInspectionsComponentsUnit VolumeOrdersCustom2907601,2005002,000Standard1101403002002,0004009001,5007004,000Totala. Determine an activity rate for each activity.Activity RatesProduction SetupProcurementQuality ControlMaterials ManagementActivity cost+ Activity base/setup/PO $/inspection/componentActivity rateb. Assign activity costs to each product and determine the unit activity cost, using the activity rates from part (a). Round unit cost to two decimal places.CustomStandardSetups TotalPurchase OrdersTotalInspections TotalComponents TotalTotal product costUnit volumeUnit costC. Assume that each product required one direct labor hour per unit. Determine the per-unit cost if factory overhead is allocated on the basis of direct labor hours. Round your answer to two decimal places.$1per unitd. The custom product will consume more vmaterials management activities than will the standard product.Next

Name: Activity-Based CostingZeus Industries manufactures two types of elect
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Description: Activity-Based CostingZeus Industries manufactures two types of electrical power units, custom and standard, which involve four factory overhead activities-production setup, procurement, quality control, and materials management. An activity analysi

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a. Determine an activity rate for each activity. Activity Rates Production Setup Procurement Quality Control Materials Management Activity cost + Activity base /setup /PO /inspection /component Activity rate b. Assign activity costs to each product and determine the unit activity cost, using the activity rates from part (a). Round unit cost to two decimal places. Custom Standard Setups Total Purchase Orders Total Inspections Total Components Total Total product cost Unit volume Unit cost C. Assume that each product required one direct labor hour per unit. Determine the per-unit cost if factory overhead is allocated on the basis of direct labor hours. Round your answer to two decimal places. per unit d. The custom product will consume more v materials management activities than will the standard product.

a. Determine an activity rate for each activity. Activity Rates Production Setup Procurement Quality Control Materials Management Activity cost + Activity base /setup /PO /inspection /component Activity rate b. Assign activity costs to each product and determine the unit activity cost, using the activity rates from part (a). Round unit cost to two decimal places. Custom Standard Setups Total Purchase Orders Total Inspections Total Components Total Total product cost Unit volume Unit cost C. Assume that each product required one direct labor hour per unit. Determine the per-unit cost if factory overhead is allocated on the basis of direct labor hours. Round your answer to two decimal places. per unit d. The custom product will consume more v materials management activities than will the standard product.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 4PB: Activity-based product costing Sweet Sugar Company manufactures three products (white sugar, brown...

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Primera Company produces two products and uses a predetermined overhead rate to apply overhead. Primera currently applies overhead using a plantwide rate based on direct labor hours. Consideration is being given to the use of departmental overhead rates where overhead would be applied on the basis of direct labor hours in Department 1 and on the basis of machine hours in Department 2. At the beginning of the year, the following estimates are provided: Actual results reported by department and product during the year are as follows: Required: 1. Compute the plantwide predetermined overhead rate and calculate the overhead assigned to each product. 2. Calculate the predetermined departmental overhead rates and calculate the overhead assigned to each product. 3. Using departmental rates, compute the applied overhead for the year. What is the under- or overapplied overhead for the firm? 4. Prepare the journal entry that disposes of the overhead variance calculated in Requirement 3, assuming it is not material in amount. What additional information would you need if the variance is material to make the appropriate journal entry?
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: The activity bases identified for each activity are as follows: The activity-base usage quantities and units produced for the three products were determined from corporate records and are as follows: Each product requires 0.5 machine hour per unit. Instructions Determine the activity rate for each activity. Determine the total and per-unit activity cost for all three products. Round to nearest cent. Why arent the activity unit costs equal across all three products since they require the same machine time per unit?
Medical Tape makes two products: Generic and Label. It estimates it will produce 423,694 units of Generic and 652,200 of Label, and the overhead for each of its cost pools is as follows: It has also estimated the activities for each cost driver as follows: How much is the overhead allocated to each unit of Generic and Label?
Zeus Industries manufactures two types of electrical power units, custom and standard, which involve four factory overhead activities—production setup, procurement, quality control, and materials management. An activity analysis of the overhead revealed the following estimated activity costs and activity bases for these activities:ActivityActivity CostActivity BaseProduction setup$ 44,000Number of setupsProcurement13,500Number of purchase orders (PO)Quality control97,500Number of inspectionsMaterials management84,000Number of componentsTotal$239,000The activity-base usage quantities for each product are as follows:SetupsPurchaseOrdersInspectionsComponentsUnit VolumeCustom2907601,2005002,000Standard1101403002002,000Total4009001,5007004,000a. Determine an activity rate for each activity. b. Assign activity costs to each product and determine the unit activity cost, c. Assume that each product required one direct labor hour per unit. Determine the per-unit cost if factory overhead is…
Zeus Industries manufactures two types of electrical power units, custom and standard, which involve four factory overhead activities—production setup, procurement, quality control, and materials management. An activity analysis of the overhead revealed the following estimated activity costs and activity bases for these activities: Activity Activity Cost Activity Base Production setup $ 42,000 Number of setups Procurement 137,500 Number of purchase orders (PO) Quality control 200,000 Number of inspections Materials management 168,000 Number of components Total $547,500 The activity-base usage quantities for each product are as follows: Setups Purchase Orders Inspections Components Unit Volume Custom 200 1,100 2,200 450 2,000 Standard 150 150 300 350 2,000 Total 350 1,250 2,500 800 4,000 a. Determine an activity rate for each activity. Activity Rates Production Setup Procurement Quality Control Materials…
Activity-Based Costing Zeus Industries manufactures two types of electrical power units, custom and standard, which involve four factory overhead activities—production setup, procurement, quality control, and materials management. An activity analysis of the overhead revealed the following estimated activity costs and activity bases for these activities: Activity Activity Cost Activity Base Production setup $ 63,000 Number of setups Procurement 118,750 Number of purchase orders (PO) Quality control 187,500 Number of inspections Materials management 172,000 Number of components Total $541,250 The activity-base usage quantities for each product are as follows: Setups Purchase Orders Inspections Components Unit Volume Custom 350 950 1,900 450 1,000 Standard 100 300 600 350 1,000 Total 450 1,250 2,500 800 2,000 a. Determine an activity rate for each activity. Activity Rates Production Setup Procurement Quality…
Activity-Based Costing Zeus Industries manufactures two types of electrical power units, custom and standard, which involve four factory overhead activities—production setup, procurement, quality control, and materials management. An activity analysis of the overhead revealed the following estimated activity costs and activity bases for these activities: Activity Activity Cost Activity Base Production setup $ 79,750 Number of setups Procurement 144,000 Number of purchase orders (PO) Quality control 256,000 Number of inspections Materials management 126,000 Number of components Total $605,750 The activity-base usage quantities for each product are as follows: Setups Purchase Orders Inspections Components Unit Volume Custom 300 1,200 2,400 400 2,000 Standard 250 400 800 300 2,000 Total 550 1,600 3,200 700 4,000 a. Determine an activity rate for each activity. Activity Rates Production Setup Procurement Quality…
Activity-Based Costing Zeus Industries manufactures two types of electrical power units, custom and standard, which involve four factory overhead activities—production setup, procurement, quality control, and materials management. An activity analysis of the overhead revealed the following estimated activity costs and activity bases for these activities: Activity Activity Cost Activity Base Production setup $ 44,000 Number of setups Procurement 13,500 Number of purchase orders (PO) Quality control 97,500 Number of inspections Materials management 84,000 Number of components Total $239,000 The activity-base usage quantities for each product are as follows: Setups PurchaseOrders Inspections Components Unit Volume Custom 290 760 1,200 500 2,000 Standard 110 140 300 200 2,000 Total 400 900 1,500 700 4,000 a. Determine an activity rate for each activity. Activity Rates Production Setup Procurement Quality Control…
Under an activity based costing system, what is the per-unit overhead cost of Z
Custom's has three cost pools and an associated cost driver to allocate the costs to the product. The cost pools, cost driver, estimated overhead, and estimated activity for the cost pool are as follows: Cost Pool Cost Driver EstimatedActivityper Driver EstimatedOverhead Material Material Requisitions 12,000 $44,400 Machining Machine Hours 186,600 373,200 Inspection Number of Inspections 9,000 65,700 What is the predetermined overhead rate for each activity? Round your answers to two decimal places. Cost Pool PredeterminedOverhead Rate Material $fill in the blank 1 per requisition Machining $fill in the blank 2 per machine hour Inspection $fill in the blank 3 per inspection
Sabby Industries has three activity cost pools and two products. It expects to produce 2,900 units of Product S209 and 1.200 of Product NZ16. Having identified its activity cost pools and the cost drivers for each pool, Sabby accumulated the following data relative to those activity cost pools and cost drivers. Activity Cost Pool Machine set-ups Assembling Inspection (a) Cost Driver Assembling Set-ups Machine hours Calculate the overhead rates. Inspection Inspections Machine set-ups $ $ Estimated Overhead $78,660 323,000 6,400 Estimated Use of Cost Drivers per set-up 190 per inspection 17,000 100 per machine hour 5709 NZ16 130 10,100 60 60 6,900 40
Doede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts--equipment depreciation and supervisory expense--to three activity cost pools--Machining, Order Filling, and Other--based on resource consumption. Data to perform these allocations appear below: Overhead costs: Equipment depreciation $ 91,000 Supervisory expense $ 12,300 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Machining Order Filling Other Equipment depreciation 0.60 0.30 0.10 Supervisory expense 0.60 0.20 0.20 In the second stage, Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity: MHs (Machining) Orders (Order Filling) Product W1 6,050 198 Product M0 21,800 999 Total…