Activity Cost Pools, Activity Rates, and Product Costsusing Activity-Based CostingCaldwell Home Appliances Inc. is estimating the activitycost associated with producing ovens and refrigerators.The indirect labor can be traced into four separateactivity pools, based on time records provided by theemployees. The budgeted activity cost and activity-baseformation are provided as follows:ActivityProcurementSchedulingMaterials handlingProduct developmentTotal costOvensRefrigeratorsTotalsActivity PoolCost$12,60090,00011,00050,000$163,600The estimated activity-base usage and unit informationfor two product lines was determined as follows:OvensRefrigeratorsNumber of purchase ordersNumber of production ordersNumber of movesNumber of engineering changesNumber ofPurchase Orders400300700Procurement (per purchase order)Scheduling (per production order)Materials handling (per move)Product development (per engineering change order)Activity BaseNumber ofProductionOrdersper unita. Determine the activity rate for each activity costpool.per unit8004001,200$$Number ofMoves$b. Determine the activity-based cost per unit of eachproduct. Round the per unit rates to the nearest cent.300200500Number (Engineering COrders80120200

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Description: Activity Cost Pools, Activity Rates, and Product Costsusing Activity-Based CostingCaldwell Home Appliances Inc. is estimating the activitycost associated with producing ovens and refrigerators.The indirect labor can be traced into four separateactiv

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Activity Cost Pools, Activity Rates, and Product Costs using Activity-Based Costing Caldwell Home Appliances Inc. is estimating the activity cost associated with producing ovens and refrigerators. The indirect labor can be traced into four separate activity pools, based on time records provided by the employees. The budgeted activity cost and activity-base formation are provided as follows:

Activity Cost Pools, Activity Rates, and Product Costs using Activity-Based Costing Caldwell Home Appliances Inc. is estimating the activity cost associated with producing ovens and refrigerators. The indirect labor can be traced into four separate activity pools, based on time records provided by the employees. The budgeted activity cost and activity-base formation are provided as follows:

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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A manufacturer reports three activities: assembling components into products; product design; and sales order processing. Determine whether each of the following cost drivers relates to assembly, design, or order processing. Cost Driver 1. Direct labor hours to assemble components 2. Number of design changes 3. Number of components assembled 4. Number of design hours 5. Number of shipments made 6. Number of sales orders processed Activity
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A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table: Budgeted Activity Activity Cost PoolBudgeted Cost Product AProduct BProduct Activity 1 7,500 10,500 21,500 Activity 2 8,500 16,500 9,500 Activity 3 4,000 2,500 3,125 How much overhead will be assigned to Product B using activity-based costing? 85,000 60,000 112,000
Chrzan, Incorporated, manufactures and sells two products: Product EO and Product NO. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Product E0 Product Ne Total direct labor-hours Activity Cost Pools Labor-related Production orders Order size The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Overhead Cost Multiple Choice $33.94 per MH $54.20 per MH Direct Expected Labor-Hours Production Per Unit 10.1 410 1,550 9.1 $51.98 per MH $21.40 per MH Activity Measures DLHS orders MHs Total Direct Labor- Hours $ 301,890 61,087 585,366 $948,343 The activity rate for the Order Size activity cost pool under activity-based costing is closest to: 4,141 14, 105 18,246 Product E 4,141 850 5,550 Expected Activity Product NO 14, 105 950 5,250 Total 18,246 1,800 10,800
Identifying Cost Drivers. Palisades Company identified the activities listed in the following as being most important (step 1 and step 2 of activity-based costing), and it formed cost pools for each activity: 1. Purchasing raw materials 2. Inspecting raw materials 3. Storing raw materials 4. Maintaining production equipment 5. Setting up machines to produce batches of product 6. Testing finished products Required: Perform step 3 of the activity-based costing process by identifying a possible cost driver for each activity.
A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table: Budgeted Activity Activity Cost PoolBudgeted Cost Product AProduct BProduct Activity 1 7,500 10,500 21,500 Activity 2 8,500 16,500 9,500 Activity 3 4,000 2,500 3,125 How much overhead will be assigned to Product B using activity-based costing? 85,000 60,000 112,000
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1. Calculate the budgeted unit cost of basic and deluxe trophies based on a single plant-wide overhead rate, if total overhead is allocated based on total direct costs. (Don't forget to include direct material and direct manufacturing labor cost in your unit cost calculation.) 2. Calculate the budgeted unit cost of basic and deluxe trophies based on departmental overhead rates, where forming department overhead costs are allocated based on direct manufacturing labor costs of the forming department and assembly department overhead costs are allocated based on total direct manufacturing labor costs of the assembly department. 3. Calculate the budgeted unit cost of basic and deluxe trophies if Tribute allocates overhead costs in each department using activity-based costing, where setup costs are allocated based on number of batches and general overhead costs for each department are allocated based on direct manufacturing labor costs of each department.
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Meester Corporation has an activity-based costing system with three activity cost pools--Machining, Order Filling, and Other. In the first stage allocations, costs in the two overhead accounts, equipment depreciation and supervisory expense, are alloceted to three activity cost pools based on resource consumption, Data used in the first stage allocations follow Overhead costs: Equipment depreciation Supervisory expense $ 81,300 $ 2,200 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Machining Order Filling Other Equipment depreciation Supervisory expense 0.50 0.30 0. 20 e. 30 e.50 0.20 Mechining costs are assigned to products using machine-hours (MHs) and Order Filing costs are essigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity date for the companve o nroducts follaw You ae sren sharg Skop Share Activity MHs (Machining) Orders (Order Filling) Product Me 1,630 9,780 1,370…