Activity-based costing 4 Bluefield has decided to use an ABC costing system and has identified the following detailed information about its cost pools and cost drivers: Activity cost pools: Materials handling Machine maintenance Cost drivers: $48,300 $16,720 Number of material moves 420 Number of machine hours 44,000 Required: Calculate Bluefield's activity rate for each cost pool.

Activity-based costing 4 Bluefield has decided to use an ABC costing system and has identified the following detailed information about its cost pools and cost drivers: Activity cost pools: Materials handling Machine maintenance Cost drivers: $48,300 $16,720 Number of material moves 420 Number of machine hours 44,000 Required: Calculate Bluefield's activity rate for each cost pool.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 8CE: Electan Company produces two types of printers. The company uses ABC, and all activity drivers are...

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Using the data in P4-2 and Microsoft Excel: 1. Separate the variable and fixed elements. 2. Determine the cost to be charged to the product for the year. 3. Determine the cost to be charged to factory overhead for the year. 4. Determine the plotted data points using Chart Wizard. 5. Determine R2. 6. How do these solutions compare to the solutions in P4-2 and P4-3? 7. What does R2 tell you about this cost model?
Caseys Kitchens three cost pools and overhead estimates are as follows: Compare the overhead allocation using: A. The traditional allocation method B. The activity based costing method (Hint: the traditional method uses machine hours as the allocation base.)
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Computing and using activity-based costing overhead allocation rates Koehler (see Exercise E19-15 and Exercise E19-16) makes handheld calculators in two models—basic and professional—and wants to further refine its costing system by allocating overhead using activity-based costing. The estimated $721,000 of manufacturing overhead has been divided into three primary activities: Materials Handling, Machine Setup, and Insertion of Parts. The following data have been compiled: Requirement 1 Koehler expects to produce 200,000 basic models and 200,000 professional models. Compute the predetermined overhead allocation rates using activity-based costing. How much overhead is allocated to the basic model? To the professional model? Requirement 2 Compare your answers for Exercise E19-15, Exercise E19-16, and Exercise E19-17. What conclusions can you draw? Note: Short Exercise S19-15 and ES19-16 must be completed before attempting Short Exercise 519-17.
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Activity Based Costing? Answer
Activity-Based Costing Hakara Company has been using direct labor costs as the basis forassigning overhead to its many products. Under this allocation system, product A has been assignedoverhead of $10.80 per unit, while product B has been assigned $3.60 per unit. Management feels thatan ABC system will provide a more accurate allocation of the overhead costs and has collected thefollowing cost pool and cost driver information:Cost Pools Activity Costs Cost Drivers Activity Driver ConsumptionMachine setup $360,000 Setup hours 4,000Materials handling 100,000 Pounds of materials 20,000Electric power 40,000 Kilowatt-hours 40,000The following cost information pertains to the production of A and B, just two of Hakara’s manyproducts:A BNumber of units produced 4,000 20,000Direct materials cost $42,000 $54,000Direct labor cost $24,000 $40,000Number of setup hours 400 200Pounds of materials used 1,000 3,000Kilowatt-hours 2,000 4,000Required1. Use activity-based costing to determine a unit cost…
Your Company has two products: A and B. The company uses activity-based costing. The estimated total cost and expected activity for each of the company's three activity cost pools are as follows: Estimated Expected Activity Activity Cost Pool Cost Product A Product B Total Machine related $17,600 700 300 1,000 MH Batch setup $32,600 600 200 800 Setups Other $52,500 900 500 1,400 DLH What is the activity rate under the activity-based costing system for Batch setups? Group of answer choices $54.33 $40.75 $40.75 per Setup $16.30 $16.30 per Setup $54.33 per Setup
The pool rate is defined as the cost per unit of the cost driver for a particular activity cost pool. Group of answer choices True False Rocket Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below. Activity Cost Cost Driver Material handling $ 225,000 Number of parts Material insertion 2,475,000 Number of parts Automated machinery 840,000 Machine hours Finishing 170,000 Direct labor hours Packaging 170,000 Orders shipped Total $ 3,880,000 The following information pertains to the three product lines for next year: Economy Standard Deluxe Units to be produced 10,000 5,000 2,000 Orders to be shipped 1,000 500 200 Number of parts per unit 10 15 25 Machine…