Activity-Based Costing and Conventional Costs Compared Chef Grill Company manufactures two types of cooking grills: the Gas Cooker and the Charcoal Smoker. The Cooker is a premium product sold in upscale outdoor shops; the Smoker is sold in major discount stores. Following is information pertaining to the manufacturing costs for the current month. Units Number of batches Number of batch moves Direct materials Direct labor Gas Cooker Charcoal Smoker 1,000 5,000 70 80 Manufacturing overhead follows: $20,000 $20,000 Total cost Gas Cooker $ $ Charcoal Smoker $ Activity Cost Cost Driver Materials acquisition and inspection $252,000 Amount of direct materials cost Materials movement Number of batch moves 16,700 Scheduling 48,000 Number of batches $316,700 Rounding instructions: Do not round until your final answers. Round total cost answers to the nearest dollar and per unit answers to the nearest cent. 10 20 (a) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming all manufacturing overhead is assigned on the basis of direct labor dollars. HINT: Use 6.4633 for overhead rate calculation. $100,000 $29,000 per unit per unit per unit per unit (b) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming manufacturing overhead is assigned using activity-based costing. Total cost $ Gas Cooker $ Charcoal Smoker $
Activity-Based Costing and Conventional Costs Compared Chef Grill Company manufactures two types of cooking grills: the Gas Cooker and the Charcoal Smoker. The Cooker is a premium product sold in upscale outdoor shops; the Smoker is sold in major discount stores. Following is information pertaining to the manufacturing costs for the current month. Units Number of batches Number of batch moves Direct materials Direct labor Gas Cooker Charcoal Smoker 1,000 5,000 70 80 Manufacturing overhead follows: $20,000 $20,000 Total cost Gas Cooker $ $ Charcoal Smoker $ Activity Cost Cost Driver Materials acquisition and inspection $252,000 Amount of direct materials cost Materials movement Number of batch moves 16,700 Scheduling 48,000 Number of batches $316,700 Rounding instructions: Do not round until your final answers. Round total cost answers to the nearest dollar and per unit answers to the nearest cent. 10 20 (a) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming all manufacturing overhead is assigned on the basis of direct labor dollars. HINT: Use 6.4633 for overhead rate calculation. $100,000 $29,000 per unit per unit per unit per unit (b) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming manufacturing overhead is assigned using activity-based costing. Total cost $ Gas Cooker $ Charcoal Smoker $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:Activity-Based Costing and Conventional Costs Compared
Chef Grill Company manufactures two types of cooking grills: the Gas Cooker and the Charcoal Smoker. The Cooker is a premium product sold in upscale outdoor shops; the Smoker is sold in major
discount stores. Following is information pertaining to the manufacturing costs for the current month.
Units
Number of batches
Number of batch moves
Direct materials
Direct labor
Gas Cooker Charcoal Smoker
1,000
5,000
10
20
70
80
Manufacturing overhead follows:
$20,000
$20,000
Total cost
Gas Cooker
Activity
Cost
Cost Driver
Materials acquisition and inspection $252,000 Amount of direct materials cost
Materials movement
Number of batch moves
16,700
Scheduling
48,000
Number of batches
$316,700
$
$
Charcoal Smoker $
Rounding instructions: Do not round until your final answers. Round total cost answers to the nearest dollar and per unit answers to the nearest cent.
(a) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming all manufacturing overhead is assigned on the basis of direct labor dollars.
HINT: Use 6.4633 for overhead rate calculation.
$100,000
$29,000
per unit
per unit
(b) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming manufacturing overhead is assigned using activity-based costing.
Total cost
$
Gas Cooker
$
Charcoal Smoker $
per unit
per unit
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