Activity-Based Costing Steampunk Corporation has the following predicted indirect costs and cost drivers for 2019 for the given activity cost pools:   Fabrication Department Finishing Department Cost Driver Maintenance $ 84,000 42,000 Machine hours Materials handling 126,000 63,000 Material moves Machine 294,000 21,000 Machine setups Inspections - 105,000 Inspection hours Total $ 504,000 $ 231,000   The following activity predictions were also made for the year:   Fabrication Department Finishing Department Machine hours 5,000 2,500 Material moves 1,500 750 Machine setups 350 25 Inspection hours - 500 It is assumed that the cost per unit of activity for a given activity does not vary between departments. Steampunk's president, Abner Punk, is trying to evaluate the company's product mix strategy regarding two of its product models, SW100 and SG150. The company has been using a company wide overhead rate based on machine hours but is considering switching to either department rates of activity-based rates. The production manager has provided the following data for the production of a batch of 100 units for each of these models:   SW100 SG150 Direct materials cost $ 28,000 $ 42,000 Direct labor cost $ 11,200 $ 8,400 Machine hours (Fabrication) 250 350 Machine hours (Finishing) 100 50 Materials moves 20 40 Machine setups 5 10 Inspection hours 15 30 a. Determine the cost of one unit each of SW100 and SG150, assuming a company-wide overhead rate is used based on total machine hours. Round rate to two decimal places. Overhead rate based on total machine hours:  $Answer   per machine hour   Use rounded overhead rate calculated about for calculations below. Round cost answers to the nearest whole number. Round cost per unit to two decimal places. Product Costs per Unit SW100 SG150 Direct materials     Direct labor     Manufacturing overhead     Total cost per batch     Number of units per batch     Cost per unit     b. Determine the cost of one unit of SW100 and SG150, assuming department overhead rates are used. Overhead is assigned based on machine hours in both departments. Round to two decimal places, if applicable. Overhead rate based on machine hours for Fabrication Dept.:  $Answer   per machine hour.   Overhead rate based on machine hours for Finishing Dept.:  $Answer   per machine hour.   Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed. Round cost per unit to two decimal places, if needed. Product Costs per Unit SW100 SG150 Direct materials     Direct labor     Manufacturing overhead: Fabrication Dept.     Finishing Dept.             Total cost per batch             Number of units per batch     Cost per unit             c. Determine the cost of one unit of SW100 and SG150, assuming activity-based overhead rates are used for maintenance, materials handling, machine setup, and inspection activities. Round rate to two decimal places, if applicable. Activity-based overhead rates: Maintenance   Materials handling   Machine setup   Inspection activities   Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed. Round cost per unit to two decimal places, if needed. Product Costs per Unit SW100 SG150 Direct materials     Direct labor     Manufacturing overhead: Maintenance activity     Materials handling activity     Machine setups activity     Inspections activity             Total cost per batch     Number of units per batch     Cost per unit

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Activity-Based Costing

Steampunk Corporation has the following predicted indirect costs and cost drivers for 2019 for the given activity cost pools:

  Fabrication
Department
Finishing
Department
Cost Driver
Maintenance $ 84,000 42,000 Machine hours
Materials handling 126,000 63,000 Material moves
Machine 294,000 21,000 Machine setups
Inspections

-

105,000

Inspection hours
Total

$ 504,000

$ 231,000

 

The following activity predictions were also made for the year:

  Fabrication
Department
Finishing
Department
Machine hours 5,000 2,500
Material moves 1,500 750
Machine setups 350 25
Inspection hours - 500

It is assumed that the cost per unit of activity for a given activity does not vary between departments. Steampunk's president, Abner Punk, is trying to evaluate the company's product mix strategy regarding two of its product models, SW100 and SG150. The company has been using a company wide overhead rate based on machine hours but is considering switching to either department rates of activity-based rates. The production manager has provided the following data for the production of a batch of 100 units for each of these models:

  SW100 SG150
Direct materials cost $ 28,000 $ 42,000
Direct labor cost $ 11,200 $ 8,400
Machine hours (Fabrication) 250 350
Machine hours (Finishing) 100 50
Materials moves 20 40
Machine setups 5 10
Inspection hours 15 30

a. Determine the cost of one unit each of SW100 and SG150, assuming a company-wide overhead rate is used based on total machine hours.

Round rate to two decimal places.

Overhead rate based on total machine hours:  $Answer

 

per machine hour

 

Use rounded overhead rate calculated about for calculations below. Round cost answers to the nearest whole number. Round cost per unit to two decimal places.

Product Costs per Unit SW100 SG150
Direct materials
 
 
Direct labor
 
 
Manufacturing overhead
 
 
Total cost per batch
 
 
Number of units per batch
 
 
Cost per unit
 
 

b. Determine the cost of one unit of SW100 and SG150, assuming department overhead rates are used. Overhead is assigned based on machine hours in both departments.

Round to two decimal places, if applicable.

Overhead rate based on machine hours for Fabrication Dept.:  $Answer

 

per machine hour.

 

Overhead rate based on machine hours for Finishing Dept.:  $Answer

 

per machine hour.

 

Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed. Round cost per unit to two decimal places, if needed.

Product Costs per Unit SW100 SG150
Direct materials
 
 
Direct labor
 
 
Manufacturing overhead:
Fabrication Dept.
 
 
Finishing Dept.

 

 

 

 

 

 

Total cost per batch

 

 

 

 

 

 

Number of units per batch
 
 
Cost per unit

 

 

 

 

 

 

c. Determine the cost of one unit of SW100 and SG150, assuming activity-based overhead rates are used for maintenance, materials handling, machine setup, and inspection activities.

Round rate to two decimal places, if applicable.

Activity-based overhead rates:
Maintenance
 
Materials handling
 
Machine setup
 
Inspection activities
 

Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed. Round cost per unit to two decimal places, if needed.

Product Costs per Unit SW100 SG150
Direct materials
 
 
Direct labor
 
 
Manufacturing overhead:
Maintenance activity
 
 
Materials handling activity
 
 
Machine setups activity
 
 
Inspections activity

 

 

 

 

 

 

Total cost per batch
 
 
Number of units per batch
 
 
Cost per unit

 

 

 

 

 

 

 
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