Activity Cost Pool Maintenance Materials Handling Setups Inspection Order processing Customer Support Annual Activity 10,000 Machine hours 30,000 Material moves 15,000 Setups 25,000 Quality inspections 25,000 Orders 500 Customers The company traces the costs of direct materials and direct labor to jobs (i.e. orders). Overhead costs (both manufacturing and non-manufacturing) are allocated to jobs using the activity-based costing system. These overhead costs are listed below: Indirect factory wages Other manufacturing overhead Selling and administrative expense $700,000 Total $250,000 $500,000 $1,450,000 The distribution of resource consumption across activity cost pools is given below: Activity Cost Pools Maintenance Materials Handling Setups Inspection Order processing customer support 20% 20% 0% 25% Indirect factory wages other manufacturing overhead Sellign and administrative expense 10% 25% 10% 0% 10% 10% 30% 40% 0% 0% 0% 0% 40% 60%

Activity Cost Pool Maintenance Materials Handling Setups Inspection Order processing Customer Support Annual Activity 10,000 Machine hours 30,000 Material moves 15,000 Setups 25,000 Quality inspections 25,000 Orders 500 Customers The company traces the costs of direct materials and direct labor to jobs (i.e. orders). Overhead costs (both manufacturing and non-manufacturing) are allocated to jobs using the activity-based costing system. These overhead costs are listed below: Indirect factory wages Other manufacturing overhead Selling and administrative expense $700,000 Total $250,000 $500,000 $1,450,000 The distribution of resource consumption across activity cost pools is given below: Activity Cost Pools Maintenance Materials Handling Setups Inspection Order processing customer support 20% 20% 0% 25% Indirect factory wages other manufacturing overhead Sellign and administrative expense 10% 25% 10% 0% 10% 10% 30% 40% 0% 0% 0% 0% 40% 60%

Name: Activity Cost PoolMaintenanceMaterials HandlingSetupsInspectionOrder
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Description: Activity Cost PoolMaintenanceMaterials HandlingSetupsInspectionOrder processingCustomer SupportAnnual Activity10,000 Machine hours30,000 Material moves15,000 Setups25,000 Quality inspections25,000 Orders500 CustomersThe company traces the costs of d

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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White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates: Department Cutting Finishing Direct labor-hours 7,800 76,000 Machine-hours 52,700 3,200 Total fixed manufacturing overhead cost $ 390,000 $ 425,000 Variable manufacturing overhead per machine-hour $ 3.00 0 Variable manufacturing overhead per direct labor-hour 0 $3.75 Required (see below for hints, if needed): 1. Compute the predetermined overhead rate for each department. 2. The job cost sheet for Job 203, which was started and completed during the year, showed the following: Department Cutting Finishing Direct labor-hours 3 16 Machine-hours 89 6 Direct materials $ 730 $ 380 Direct labor…
Please help finding solution for this problem Required : (1) Predertmined overhead rate cutting and finishing department REquired : (2)Total Mafacturing cost White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates: Department Cutting Finishing Direct labor-hours 8,800 62,000 Machine-hours 65,700 1,500 Total fixed manufacturing overhead cost $ 380,000 $ 489,000 Variable manufacturing overhead per machine-hour $ 2.00 — Variable manufacturing overhead per direct labor-hour — $ 4.75 Department Cutting Finishing Direct labor-hours 4 12 Machine-hours 90 4 Direct materials $ 720 $ 360 Direct labor…
Angel Corporation uses activity-based costing to determine product costs for external financial reports. The company has provided the following data concerning its activity-based costing system: Activity Cost Pools (and Activity Measures) Machine related (machine-hours) Estimated Overhead Cost $323,840 $363,000 $258,420 Batch setup (setups) Order size (direct labor-hours) Expected Activity Activity Cost Pools Machine related Product X Product Y Total 5,400 10,800 4,400 7,400 2,400 7,400 12,800 Batch setup 13,200 11,800 Order size Assuming that actual activity turns out to be the same as expected activity, the total amount of overhead cost allocated to Product X would be closest to: (Round your intermediate calculations to 2 decimal places.)
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Job Order Cost Accounting for a Service Company The Fly Company provides advertising services for clients across the nation. The Fly Company is presently working on four projects, each for a different client. The Fly Company accumulates costs for each account (client) on the basis of both direct costs and allocated indirect costs. The direct costs include the charged time of professional personnel and media purchases (air time and ad space). Overhead is allocated to each project as a percentage of media purchases. The predetermined overhead rate is 40% of media purchases. On August 1, the four advertising projects had the following accumulated costs: August 1 Balances Vault Bank $86,800 Take Off Airlines 26,000 Sleepy Tired Hotels 60,800 Tastee Beverages 37,300 Total $210,900 During August, The Fly Company incurred the following direct labor and media purchase costs related to preparing advertising for each of the four accounts: Direct Labor Media Purchases Vault Bank $57,800 $232,800…
Job Order Cost Accounting for a Service Company The Fly Company provides advertising services for clients across the nation. The Fly Company is presently working on four projects, each for a different client. The Fly Company accumulates costs for each account (client) on the başis of both direct costs and allocated indirect costs. The direct costs include the charged time of professional personnel and media purchases (air time and ad space). Overhead is allocated to each project as a percentage of media purchases. The predetermined overhead rate is 50% of media purchases. On August 1, the four advertising projects had the following accumulated costs: August 1 Balances Vault Bank $68,700 Take Off Airlines 20,600 Sleepy Tired Hotels 48,100 Tastee Beverages 29,500 Total $166,900 During August, The Fly Company incurred the following direct labor and media purchase costs related to preparing advertising for each of the four accounts: Direct Labor Media Purchases Vault Bank $46,100 $173,800…
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McDuff Company uses a job-order costing system to compute product costs. There are two producing departments (P1 and P2) and two support departments (S1 and S2). The costs incurred in S1 and S2 are allocated to Departments A and B and included in their factory overhead rates for costing products. S1 costs are allocated based on the number of employees, S2 costs are allocated based on direct labor hours, and the production departmental overhead rates are also based on direct labor hours. The following data are available for a recent period: S1 S2 P1 P2 Direct department costs $12,000 $18,000 $70,000 $117,500 Number of employees 8 12 48 72 Direct labor hours 450 325 2,250 1,800 Required: Prepare a schedule allocating the support department costs to the producing departments using the sequential allocation method. The department with the greatest percentage of interdepartmental services should be allocated first.…