subject : General accounting ABC Manufacturing produces premium gadgets. Four raw materialsare transformed into the finished product by two productiondepartments. Manufacturing overhead is applied to production basedon machine hours. The following standards have been established foreach gadget produced:Standard Quantity Standard RateInputRaw material #135 lbs.$8.25/lbRaw material #2Raw material #318 ft.$5.50/ft2 containers$12.75/containerRaw material #45 units$3.40/unitDepartment A labor2.5 hrs$22.50/hrDepartment B labor1.8 hrs$27.00/hrManufacturing overhead$18.00/machine hourIf each gadget requires 3.2 machine hours to produce, calculate thestandard cost of producing 250 premium gadgets.

Calculate the Cost per GadgetFor each gadget, the cost is computed as:InputStandard Quantity per…

Answered: ABC Manufacturing produces premium…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 5PB: Wrappers Tape makes two products: Simple and Removable. It estimates it will produce 369,991 units...

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The following data appeared in the accounting records of Craig Manufacturing Inc., which uses the weighted average cost method: Case 1All materials are added at the beginning of the process, and labor and factory overhead are added evenly throughout the process. Case 2One-half of the materials are added at the start of the manufacturing process, and the balance of the materials is added when the units are one-half completed. Labor and factory overhead are applied evenly during the process. Make the following computations for each case: a. Unit cost of materials, labor, and factory overhead for the month b. Cost of the units finished and transferred during the month c. Cost of the units in process at the end of the month
Roberts Company produces two weed eaters: basic and advanced. The company has four activities: machining, engineering, receiving, and inspection. Information on these activities and their drivers is given below. Overhead costs: Required: 1. Calculate the four activity rates. 2. Calculate the unit costs using activity rates. Also, calculate the overhead cost per unit. 3. What if consumption ratios instead of activity rates were used to assign costs instead of activity rates? Show the cost assignment for the inspection activity.
Patterson Company produces wafers for integrated circuits. Data for the most recent year are provided: aCalculated using number of dies as the single unit-level driver. bCalculated by multiplying the consumption ratio of each product by the cost of each activity. Required: 1. Using the five most expensive activities, calculate the overhead cost assigned to each product. Assume that the costs of the other activities are assigned in proportion to the cost of the five activities. 2. Calculate the error relative to the fully specified ABC product cost and comment on the outcome. 3. What if activities 1, 2, 5, and 8 each had a cost of 650,000 and the remaining activities had a cost of 50,000? Calculate the cost assigned to Wafer A by a fully specified ABC system and then by an approximately relevant ABC approach. Comment on the implications for the approximately relevant approach.
Puvd, Inc manulactures a single product in which varlable manufacturing overthead is assigned on the basis of standard direct labor-hours. The company uses a standard cost system and has established the following standards for one unit of product Standard Cost Standard Price Direct materials Direct labor Variable manufacturing overhead Standard Quantity 1.5 pounds 0.5 hours or Rate $ 6.75 per pound $21.00 per hour $ 5.00 per hour $ 10.12 $ 10.50 $ 2.50 0.5 hours During March, the following activity was recorded by the company: • The company produced 6,000 units during the month. A total of 12.500 pounds of material were purchased at a cost of $35.000. • There was no beginning inventory of materials on hand to start the month; at the end of the month, 2.500 pounds of material remainedhe warehouse • During March, 3.200 direct labor-hours were worked at a rate of $21.50 per hour. • Varlable manufacturing overhead costs during March totaled $8,200. The direct materials purchases variance…
Puvo, Inc., manufactures a single product in which variable manufacturing overhead is assigned on the basis of standard direct labor-hours. The company uses a standard cost system and has established the following standards for one unit of product:. Standard Price Standard Standard Quantity 6.50 poundS or Rate $1.30 per pound $40.50per hour Cost Direct materials Direct labor Variable manufacturing overhead $8.45 0.40 hours $ 16.20 $ 3.68 0.40 hours $ 9.20 per hour During March, the following activity was recorded by the company. - The company produced 3,100 units during the month. A total of 20O100 pounds of material were purchased at a cost of $14,280. • There was no beginning inventory of materials on hand to start the month; at the end of the month, 4,320 pounds of material remained in the warehouse. During March, 1.160 direct labor-hours were worked at a rate of $37.50 per hour. Variable manufacturing overhead costs during March totaled $14.761. The direct materials purchases…
Puvo, Incorporated, manufactures a single product in which variable manufacturing overhead is assigned on the basis of standard direct labor-hours. The company uses a standard cost system and has established the following standards for one unit of product: Standard Quantity Standard Price or Rate Standard Cost Direct materials 7.1 pounds $ .90 per pound $ 6.39 Direct labor 0.5 hours $ 46.50 per hour $ 23.25 Variable manufacturing overhead 0.5 hours $ 9.80 per hour $ 4.90 During March, the following activity was recorded by the company: The company produced 3,700 units during the month. A total of 20,700 pounds of material were purchased at a cost of $14,880. There was no beginning inventory of materials on hand to start the month; at the end of the month, 4,920 pounds of material remained in the warehouse. During March, 1,220 direct labor-hours were worked at a rate of $43.50 per hour. Variable manufacturing overhead costs during March totaled $15,361. The…
Puvo, Incorporated, manufactures a single product in which variable manufacturing overhead is assigned on the basis of standard direct labor-hours. The company uses a standard cost system and has established the following standards for one unit of product: Standard Quantity Standard Price or Rate Standard Cost Direct materials 5.8 pounds $ 0.60 per pound $ 3.48 Direct labor 0.5 hours $ 33.50 per hour $ 16.75 Variable manufacturing overhead 0.5 hours $ 8.50 per hour $ 4.25 During March, the following activity was recorded by the company: The company produced 2,400 units during the month. A total of 19,400 pounds of material were purchased at a cost of $13,580. There was no beginning inventory of materials on hand to start the month; at the end of the month, 3,620 pounds of material remained in the warehouse. During March, 1,090 direct labor-hours were worked at a rate of $30.50 per hour. Variable manufacturing overhead costs during March totaled $14,061. The…
Puvo, Inc., manufactures a single product in which variable manufacturing overhead is assigned on the basis of standard direct labor-hours. The company uses a standard cost system and has established the following standards for one unit of product: Standard Quantity Standard Priceor Rate Standard Cost Direct materials 2.5 pounds $ 3.50 per pound $ 8.75 Direct labor 0.6 hours $ 8.00 per hour $ 4.80 Variable manufacturing overhead 0.6 hours $ 1.75 per hour $ 1.05 During March, the following activity was recorded by the company: The company produced 3,400 units during the month. A total of 12,000 pounds of material were purchased at a cost of $33,600. There was no beginning inventory of materials on hand to start the month; at the end of the month, 2,400 pounds of material remained in the warehouse. During March, 2,240 direct labor-hours were worked at a rate of $8.50 per hour. Variable manufacturing overhead costs during March totaled $2,552. The direct…
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Mickley Corporation produces two products, Alpha6s and Zeta7s, which pass through two operations, Sintering and Finishing. Each of the products uses two raw materials—X442 and Y661. The company uses a standard cost system, with the following standards for each product (on a per unit basis): Raw Material Standard Labor Time Product X442 Y661 Sintering Finishing Alpha6 2.0 kilos 1.5 liters 0.10 hours 0.80 hours Zeta7 3.0 kilos 2.5 liters 0.45 hours 0.90 hours Information relating to materials purchased and materials used in production during May follows: Material Purchases Purchase Cost StandardPrice Used inProduction X442 14,800 kilos $66,600 $4.30 per kilo 9,300 kilos Y661 15,800 liters $23,700 $1.60 per liter 13,800 liters The following additional information is available: The company recognizes price variances when materials are purchased. The standard labor rate is $22.00 per hour in Sintering and $21.00 per hour in Finishing.…
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