Activity Rates and Product Costs using Activity-Based Costing Lonsdale Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budge activity costs and activity bases are as follows: Budgeted Activity Activity Cost Activity Base Casting $330,560 Machine hours Assembly 212,040 Direct labor hours Inspecting 26,100 Number of inspections Setup 39,000 Number of setups Materials handling 39,990 Number of loads Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow: Activity Base Entry Dining Total Machine hours 5,470 4,860 10,330 Direct labor hours 4,710 7,070 11,780 Number of Inspections 1,320 420 1,740 Number of setups 210 50 260 Number of loads 730 200 930 Units produced 10,800 5,400 16,200 a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar.

Activity Rates and Product Costs using Activity-Based Costing Lonsdale Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budge activity costs and activity bases are as follows: Budgeted Activity Activity Cost Activity Base Casting $330,560 Machine hours Assembly 212,040 Direct labor hours Inspecting 26,100 Number of inspections Setup 39,000 Number of setups Materials handling 39,990 Number of loads Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow: Activity Base Entry Dining Total Machine hours 5,470 4,860 10,330 Direct labor hours 4,710 7,070 11,780 Number of Inspections 1,320 420 1,740 Number of setups 210 50 260 Number of loads 730 200 930 Units produced 10,800 5,400 16,200 a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Entries for Flow of Factory Costs for Process Costing Keoni Inc. manufactures a sugar product by a continuous process, involving three production departments-Refining, Sifting, and Packing. Assume that records indicate that direct materials, direct labor, and applied factory overhead for the first department, Refining, were $522,500, $182,900, and $120,200, respectively. Also, work in process in the Refining Department at the beginning of the period totaled $29,300, and work in process at the end of the period totaled $36,100. a. Journalize the entries to record the flow of costs into the Refining Department during the period for (1) direct materials, (2) direct labor, and (3) factory overhead. If an amount box does not require an entry, leave it blank. 1. 2. 3. b. Journalize the entry to record the transfer of production costs to the second department, Sifting. If an amount box does not require an entry, leave it blank.
Teach Gear Inc. produces 3 types of office equipment; Bronze, silver and Gold and uses an activity-based product costing system. They have identified 5 activities. Each activity, it costs and related activity driver is summarized below: Activity Material handling Material insertion Activity Units to be produced Orders to be shipped Number of parts per unit Machine hours per unit Labor hours per unit Cost Tasks: Automated Machinery finishing Packaging The following data are provided for each product line: Activity driver Number of parts Number of parts 350,000 Machine hours 150,000 Labor hours 90,000 Orders shipped Bronze P120,000 240,000 6,000 1,200 4. 1 2 Silver 4,000 800 5 2 3 Gold 2,000 400 8 3 لنا Make a narrative recommend the unit cost per unit of Bronze, Silver and Gold using the ABC system. In support of your recommendation show your solution presenting: 1. The computation of the activity cost rates 2. the computation of the estimated volume (TOTAL PARTS, TOTAL MACHINE HOURS,…
Support Department Cost Allocation-Direct Method Charlie's Wood Works produces wood products (e.g., cabinets, tables, picture frames, and so on). Production departments include Cutting and Assembly. The Janitorial and Security departments support the Cutting and Assembly departments. The Assembly Department spans about 48,720 square feet and holds assets valued at about $79,040. The Cutting Department spans about 35,280 square feet and holds assets valued at about $128,960. Charlie's Wood Works allocates support department costs using the direct method. If costs from the Janitorial Department are allocated based on square feet and costs from the Security Department are allocated based on asset value. a. Determine the percentage of Janitorial costs that should be allocated to the Assembly Department. % b. Determine the percentage of Security costs that should be allocated to the Cutting Department. % All work saved. Û ✰ O 0 0 В B Previous Next
Silven Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity $138,000 Number of setups 10,200 Number of orders 92,400 Machine hours 18,480 Receiving hours phones with the following expected activity demands: Setting up equipment Ordering materials Machining Receiving Silven produces two models of cell Model X 5,000 80 200 6,600 385 Units completed Number of setups Number of orders Machine hours Receiving hours Required: Model Y 10,000 40 400 4,950 770 120 600 11,550 1,155
Teach Gear Inc. produces 3 types of office equipment; Bronze, silver and Gold and uses an activity-based product costing system. They have identified 5 activities. Each activity, it costs and related activity driver is summarized below: Activity Cost Activity driver Material handling P120,000 Number of parts Material insertion 240,000 Number of parts Automated 350,000 Machine hours Machinery finishing 150,000 Labor hours Packaging 90,000 Orders shipped The following data are provided for each product line: Activity Bronze Silver Gold Units to be produced 6,000 4,000 2,000 Orders to be shipped 1,200 800 400 Number of parts per unit 4. 5 8 Machine hours per unit 1 2 3 Labor hours per unit 2 3 3 b. the computation of the estimated volume (TOTAL PARTS, TOTAL MACHINE HOURS, TOTAL LABOR HOURS AND ORDERS TO BE SHIPPED)
Support Department Cost Allocation-Direct Method Charlie's Wood Works produces wood products (e.g., cabinets, tables, picture frames, and so on). Production departments include Cutting and Assembly. The Janitori and Security departments support the Cutting and Assembly departments. The Assembly Department spans about 50,400 square feet and holds assets valued at abo $88,000. The Cutting Department spans about 33,600 square feet and holds assets valued at about $132,000. Charlie's Wood Works allocates support department ce using the direct method. If costs from the Janitorial Department are allocated Based on square feet and costs from the Security Department are allocated based on a value. a. Determine the percentage of Janitorial costs that should be allocated to the Assembly Department. % b. Determine the percentage of Security costs that should be allocated to the Cutting Department.
Garfield Company manufactures three types of televisions: Model A, B and C. The company uses the activity-based costing, has identified five activities and its related cost drivers. Each activity, budgeted cost and related cost driver are as follows: (a) Materials handling, P112,500, number of parts; (b) Materials insertion, P1,237,500; number of parts; (c) Automated machinery, P420,000, machine hours; (d) Finishing, P85,000, direct labor hours; and (e) Packaging, P85,000, order shipped. The following information pertains to each product line for next year: (f) units produced (A, 5,000; B, 2,500; C, 1,000); (g) orders to be shipped (A 500, B 250, C 100); (h) number of parts per unit (A 5, B 7.50; C 12.50); (i) machine hours per unit (A 0.50; B 1.50; C 2.50) and (j) labor hours per unit (A 1; B 1, C 1). Under the activity-based costing, what is the total costs of B? P680,000 P228,235 P570,588 P440,000
Garfield Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and activity bases are as follows: Budgeted Activity Activity Cost Activity Base Casting $99,820 Machine hours Assembly 58,900 Direct labor hours Inspecting 21,252 Number of inspections Setup 33,221 Number of setups Materials handling 34,830 Number of loads Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow: Activity Base Entry Dining Total Machine hours 2,101 1,119 3,220 Direct labor hours 791 2,309 3,100 Number of inspections 724 288 1,012 Number of setups 175 64 239 Number of loads 544 230 774 Units produced 6,569 1,747 8,316
Rundle Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity co pools follow: Cost Cost driver Req A and B Unit Level $ 25,200 Req C a. Allocated cost b. Allocated cost Production of 880 sets of cutting shears, one of the company's 20 products, took 130 labor hours and 10 setups and consumed 15 percent of the product-sustaining activities. Required 8. Had the company used labor hours as a companywide allocation base, how much overhead would it have allocated to the cutting shears? Complete this question by entering your answers in the tabs below. 1,200 labor hours b. How much overhead is allocated to the cutting shears using activity-based costing? c. Compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 880…
Requlred Information Greenwood Company manufactures two products-13,000 units of Product Y and 5,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z Estimated Overhead Cost $ 242,400 $114,400 86,000 $ 302,400 Expected Activity Cost Pool Machining Machine setups Production design General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours 12,000 MHs 220 setups 2 products 12,000 DLHS Activity Measure Machining, Number of setups Number of products Direct labor-hours Product Y 8,200 40 1. 8,200 Product Z 3,800 180 1. 3,800 Required: 1. What is the company's plantwide overhead rate? (Round your enswer to 2 declmal places.) Predetermined overhead rate, per DLH of 15 甜…
1-Sweet Sugar Company manufactures three products (white sugar, brown sugar, and powdered sugar) in a continuous production process. Senior management has asked the controller to conduct an activity-based costing study. The controller identified the amount of factory overhead required by the critical activities of the organization as follows: Activity Budgeted Activity Cost Production $500,000 Setup 144,000 Inspection 44,000 Shipping 115,000 Customer Service 84,000 Total $887,000 The activity bases identified for each activity are as follows: Activity Activity Base Production Machine hours Setup Number of setups Inspection Number of inspections Shipping Number of customer orders Customer Service Number of customer service requests The activity-base usage quantities and units produced for the three products were determined from corporate records and are as follows: Machine Hours Number of Setups Number of…
Teach Gear Inc. produces 3 types of office equipment; Bronze, silver and Gold and uses an activity-based product costing system. They have identified 5 activities. Each activity, it costs and related activity driver is summarized below: Activity Cost Activity driver Material handling P120,000 Number of parts Material insertion 240,000 Number of parts Automated 350,000 Machine hours Machinery finishing 150,000 Labor hours Packaging 90,000 Orders shipped The following data are provided for each product line: Activity Bronze Silver Gold Units to be produced 6,000 4,000 2,000 Orders to be shipped 1,200 800 400 Number of parts per unit 4. 5 8 Machine hours per unit 1 2 3 Labor hours per unit 2 3 3 a. The computation of the activity cost rates