ABC system. For the coming period, the company is planning to use 5,000 direct labor hours, and its total budgeted factory overhead amounts to P90,000, broken down as follows: Activity Setup costs Production monitoring Cost Driver Number of set ups Budgeted Activity Budgeted Cost P20,000 P40,000 40 Number of batches 20 Quality control Number of inspections 1,000 P30,000 Projected data for one of the Company's product, Product B, for the coming period are as follows: Production and sales 1,000 units Number of inspections 200 Direct labor hours 2,000 hours Direct material cost P10 per unit Units per batch Number of setups 500 Direct labor rate P20 per hour 4 1. If the Company will use the traditional full cost system, the cost per unit of product B for the coming period will be 2. If the Company will use the ABC system, the cost per unit of product B for the coming year will be

ABC system. For the coming period, the company is planning to use 5,000 direct labor hours, and its total budgeted factory overhead amounts to P90,000, broken down as follows: Activity Setup costs Production monitoring Cost Driver Number of set ups Budgeted Activity Budgeted Cost P20,000 P40,000 40 Number of batches 20 Quality control Number of inspections 1,000 P30,000 Projected data for one of the Company's product, Product B, for the coming period are as follows: Production and sales 1,000 units Number of inspections 200 Direct labor hours 2,000 hours Direct material cost P10 per unit Units per batch Number of setups 500 Direct labor rate P20 per hour 4 1. If the Company will use the traditional full cost system, the cost per unit of product B for the coming period will be 2. If the Company will use the ABC system, the cost per unit of product B for the coming year will be

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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The total factory overhead for Magnum Corporation is budgeted for the year at $500,000. This is divided into three activity pools: fabrication, $246,000; assembly, $144,000, and setup, $110,000. Magnum manufactures two types of kayaks: Basic and Deluxe. The activity-based usage quantities for each project by activity are as follows: Fabrication Assembly Setup Basic 2,000 dlh 8,000 dlh 5 setups Deluxe 10,000 dlh 24,000 dlh 15 setups Total activity-base usage 12,000 dlh 32,000 dlh 20 setups Each product is budgeted for 2,500 units of production for the year.What is the activity-based factory overhead per unit for the Deluxe kayak? a.$41.80 b.$158.20 c.$100.00 d.$154.54
Fee Ltd makes four products, A, B, C and D, and has produced the following budgeted figures for the forthcoming period:A B C DDemand (units) 4,000 1,000 1,800 1,500Income K 40,000 20,000 27,000 38,400 Costs KMaterial 12,000 8,000 12,000 12,000Labour 12,000 6,000 8,000 15,000Variable Overhead 2,000 1,000 1,700 2,400Fixed Overhead 6,000 4,000 5,000 6,000Labour is paid at K10 per hour and is limited to 3,800 hours for the period. Materials are bought at K20 per kg and 2400 kgs of material is available.Required:(a) Find the limiting factor if the company wishes to produce the budgeted units as above. (b) Calculate and determine the order of profitability. (c) Calculate the production mix that will maximize profit for the period and the profit that will result if that mix is produced. (d) Calculate the increase in profit if an extra 150 units of the limiting factor are made available.
Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared monthly for each department. The planning budget and flexible budget for the Production Department are based on the following formulas, where q is the number of labor-hours worked in a month: Cost Formulas Direct labor $15.80q Indirect labor $8,200 + $1.60q Utilities $6,400 + $0.80q Supplies $1,100 + $0.40q Equipment depreciation $23,000 + $3.70q Factory rent $8,400 Property taxes $2,100 Factory administration $11,700 + $1.90q The Production Department planned to work 8,000 labor-hours in March; however, it actually worked 8,400 labor-hours during the month. Its actual costs incurred in March are listed below: Actual Cost Incurred in March Direct labor $ 134,730 Indirect labor $ 19,860 Utilities $ 14,570 Supplies $ 4,980 Equipment depreciation $ 54,080 Factory rent $ 8,700 Property taxes $ 2,100…
Narp. Ine, is preparing a budget for next vear and requires a breakdown of the cost of steam used in its factory into fixed and variable components. The following data on the cost of steam used and the units produced are available for the last six months: 25) Cost of Steam Units Produced July August September. October $ 15,850 13,000 16,370 20,000 17,600 18.500 3,000 c22,000 2,900 3,750 2,670 2.650 16.970 November. December. Total.... S101.320 ans Sharp uses the high-low method of analysis. Required: Show your work in answering the question. Failure to do so results in zero points a. What is the estimated variable cost of steam per unit produced? b. What is the total fixed cost? c. If there were 2,500 units produced the cost of steam would be?
Denver Enterprises recently used 14,000 labor hours to produce 7,500 completed units. According to manufacturing specifications, each unit is anticipated to take two hours to complete. The company's actual payroll cost amounted to $158,200. If the standard labor cost per hour is $11, Denver's labor efficiency variance is: How do you find standard hours? A. $11,000U. B. $11,000F. C $11,300U. D. $11,300F. E. none of the other answers are correct.
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Swifty Corporation manufactures safes-large mobile safes, and large walk-in stationary bank safes. As part of its annual budgeting process, Swifty is analyzing the profitability of its two products. Part of this analysis involves estimating the amount of overhead to be assigned to each product line. The information shown below relates to overhead. Units planned for production Material moves per product line Purchase orders per product line Direct labor hours per product line (a) (1) One mobile safe $ (2) Your answer is correct. (b1) eTextbook and Media (a) One walk-in safe (b) The total estimated manufacturing overhead was $260,000. Under traditional costing (which assigns overhead on the basis of direct labor hours), what amount of manufacturing overhead costs are assigned to: (Round answers to 2 decimal places, e.g. 12.25.) One mobile safe $ One walk-in safe Mobile Safes Walk-in Safes $ 200 $ 300 450 800 416 50 3,536 200 The total estimated manufacturing overhead of $260,000 was…
Palladium Inc. produces a variety of household cleaning products. Palladium's controller has developed standard costs for the following four overhead items: Overhead Item Total Fixed Cost Variable Rate per Direct Labor Hour Maintenance Power Indirect labor Rent $86,000 140,000 $0.20 0.45 2.10 35,000 Next year, Palladium expects production to require 88,000 direct labor hours Exercise 9-63 Flexible Budget for Various Levels of Activity Refer to the information for Palladium Inc. above. Required: 1. Prepare an overhead budget for the expected level of direct labor hours for the coming year. 2. Prepare an overhead budget that reflects production that is 15% higher than expected and for production that is 15% lower than expected.
Production, Direct Labor, Direct Materials, Sales Budgets, Budgeted Contribution Margin Greiner Company makes and sells high-quality glare filters for microcomputer monitors. John Craven, controller, is responsible for preparing Greiner's master budget and has assembled the following data for the coming year. The direct labor rate includes wages, all employee-related benefits, and the employer's share of FICA. Labor saving machinery will be fully operational by March. Also, as of March 1, the company's union contract calls for an increase in direct labor wages that is included in the direct labor rate. Greiner expects to have 6,600 glare filters in inventory on December 31 of the current year, and has a policy of carrying 35 percent of the following month's projected sales in inventory. Information on the first four months of the coming year is as follows: January February March April Estimated unit sales 37,200 35,400 40,000 40,000 Sales price per unit $80 $80 $75 $75 Direct labor…
Production, Direct Labor, Direct Materials, Sales Budgets, Budgeted Contribution Margin Greiner Company makes and sells high-quality glare filters for microcomputer monitors. John Craven, controller, is responsible for preparing Greiner's master budget and has assembled the following data for the coming year. The direct labor rate includes wages, all employee-related benefits, and the employer's share of FICA. Labor saving machinery will be fully operational by March. Also, as of March 1, the company's union contract calls for an increase in direct labor wages that is included in the direct labor rate. Greiner expects to have 6,600 glare filters in inventory on December 31 of the current year, and has a policy of carrying 35 percent of the following month's projected sales in inventory. Information on the first four months of the coming year is as follows: January February March April Estimated unit sales 37,200 35,400 40,000 40,000 Sales price per unit $80 $80 $75 $75 Direct labor…
Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared monthly for esch deportment. The planning budget and flexible budget for the Production Department are based on the following formulas, where q is the number of labor-hours worked in a month: Cost Formulas Direct labor Indirect labor Utilitics Supplies Equipment depreciation Factory rent Ргopсrty tакеs Factory adninistration $15.88g $8, 280 + $1.68g $6,400 + $e.seg $1,180 + $e.48g $23,0ee + $3.78g $8,400 $2,100 $11,700 + $1.9eg The Production Department planned to work 8,000 lebor-hours in March; however, it octually worked 8,400 lobor-hours during the month. Its actual costs incurred in March are listed below: Actual Cost Incurred in March $134,738 $ 19,860 $ 14,578 $ 4,988 $ 54, 88e $ 8,700 $ 2,100 $ 26,470 Direct labor Indirect labor lities Supplies Equipment depreciation Factory rent Property taxes Factory administration Required: 1. Prepare the Production…
The total factory overhead for Landen Company is budgeted for the year at $675,000. Landen manufactures two drapery products: sheer curtains and insulated curtains. These products each require 6 direct labor hours (dlh) to manufacture. Each product is budgeted for 7,500 units of production for the year. What would the factory overhead allocated per unit for insulated curtains using the single plantwide factory overhead rate be? a.$15.00 b.$270.00 c.$45.00 d.$90.00