Activity Cost Activity BaseProcurement$370,000Number of purchase ordersScheduling250,000Number of production ordersMaterials handlingProduct development 730,000500,000Number of movesNumber of engineering changesProduction1,500,000Machine hoursNumber of Number of Number Number ofNumberPurchase Production ofEngineering Machine ofOrdersOrdersMoves ChangesHours UnitsDisk drives 4,0003001,400102,0002,000Tape drives 4,000150800108,0004,000Wire drives 12,0008004,0002510,000 2,500The activity rate for the scheduling activity cost pool isa.$29.41 per production orderb.$200.00 per production orderc.$20.00 per production orderd.$10.42 per production order

Formula: Activity rate for the scheduling activity cost = Scheduling activity cost / Number of…

Activity Cost Activity Base Procurement $370,000 Number of purchase orders Scheduling Materials handling 500,000 Product development 730,000 250,000 Number of production orders Number of moves Number of engineering changes Production 1,500,000 Machine hours Number of Number of Number Number of Number Engineering Machine of Hours Units Purchase Production of Orders Orders Moves Changes

Activity Cost Activity Base Procurement $370,000 Number of purchase orders Scheduling Materials handling 500,000 Product development 730,000 250,000 Number of production orders Number of moves Number of engineering changes Production 1,500,000 Machine hours Number of Number of Number Number of Number Engineering Machine of Hours Units Purchase Production of Orders Orders Moves Changes

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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Equivalent Units: Weighted Average Method The following data are for four independent process-costing departments. Inputs are added continuously. A B C D Beginning inventory 8,000 3,000 — 48,000 Percent completion 40% 80% — 70% Units started 28,000 22,000 45,000 33,000 Ending inventory 7,000 — 8,000 13,000 Percent completion 30% — 20% 30% Required: Compute the equivalent units of production for each of the preceding departments using the weighted average method. Equivalent Units Department A fill in the blank 1 Department B fill in the blank 2 Department C fill in the blank 3 Department D fill in the blank 4
10-44. Resources Used versus Resources Supplied The Purchasing Department at Arnold & Daughters reports the following information about resources. Cost Driver Rate Cost Driver Volume Resources used 24 Material testing Material procurement. Resources supplied Material testing Material procurment. 43 per test 2,000 tests %$4 600 per order 500 orders $100,000 $340,000 Required Compute unused resource capacity in the Purchasing Department at Arnold & Daughters.
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Process Assembly Finishing Support Activity Machining Setups Budgeted Cost $311,800 Activity Cost Driver Activity Usage Machine hours (MH) 7,600 24,000 $335,800 Setups 240 Inspecting Purchasing $ 224,000 Inspections 800 $ 130,000 Purchase orders 540 Additional production information concerning its two models follows. Units and Activities Units produced Machine hours Setups Inspections Purchase orders Per Unit Selling price per unit Direct materials cost per unit Direct labor cost per unit Model X Model Z 2,000 4,000 2,200 5,400 80 160 540 260 360 180 Model X $410 Model Z $ 390 160 110 145 160 1. Compute the activity rate for each activity using activity-based costing. 2. Using activity-based costing, compute the overhead cost per unit for each model. 3. Compute the total product cost per unit for each model. 4. For each model, compute the gross profit per unit (selling price per unit minus product cost per unit).
Activity-Based Costing Steampunk Corporation has the following predicted indirect costs and cost drivers for 2019 for the given activity cost pools: FabricationDepartment FinishingDepartment Cost Driver Maintenance $ 36,000 18,000 Machine hours Materials handling 54,000 27,000 Material moves Machine 126,000 9,000 Machine setups Inspections - 45,000 Inspection hours Total $ 216,000 $ 99,000 The following activity predictions were also made for the year: FabricationDepartment FinishingDepartment 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…
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Department Personnel Custodial Services Maintenance Printing Binding Personnel Custodial Services Maintenance Printing Binding Total budgeted cost Total Labor- Square Feet of Space Occupied Printing Department Binding Department Total hours Hours 16,000 8,200 14,300 30,600 108,000 177,100 Budgeted overhead costs in each department for the current year are shown below: $ 300,000 66,000 93,400 Req 1 Req 2 12,400 3,100 10,500 40,400 20,900 87,300 Machine-Hours 2,400 500 2,900 414,000 170,000 $ 1,043,400 Number of Employees 22 49 69 Req 3A 105 300 545 Because of its simplicity, the company has always used the direct method to allocate service department costs to the two operating departments. Machine- Hours Required: 1. Using the step-down method, allocate the service department costs to the consuming departments. Then compute predetermined overhead rates in the two operating departments. Use machine-hours as the allocation base in the Printing Department and direct labor-hours as the…
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Budgeted overhead £100,000 Actual overhead £90,000 Budgeted labour hours 20,000 Actual labour hours 21,000 Calculate the amount of under/over recovery of overheads. A Over absorption £15,000 B Over absorption £5,000 C Under absorption £15,000 D Under absorption £5,000
Inventory in process, March 1 (35% completed) 2,000 Started and completed in March 35,000 35,000 35,000 Transferred to Baking Department in March 37,000 Inventory in process, March 31 (80% completed) 3,000 Total units to be assigned costs 40,000 Cost Information Cost per equivalent unit: Direct Materials Conversion Total costs for March in Mixing Department $40,660 $36,765 Total equivalent units Cost per equivalent unit Costs assigned to production: