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After reading an article about activity-based costing in a trade journal for the furniture industry, Santana Rey decides to analyze overhead cost at Business Solutions. In a recent month, Santana found that setup costs, inspection costs, and utility costs made up most of the company's overhead. Additional information about overhead follows. Activity Set up Inspection Utilities Total Budgeted Cost $ 20,000 7,500 10,000 $ 37,500 The following data pertain to Job 615. Direct materials. Direct labor Overhead Setups Parts inspected Machine hours $ 2,500 $ 3,500 $ Budgeted Activity Usage 25 setups 5,000 parts inspected 5,000 machine hours (MH) 2 setups 400 parts inspected 600 machine hours Required: 1. Classify each of the three overhead activities as unit level, batch level, product level, or facility level. 2. Assume Business Solutions allocates overhead cost using a plantwide rate based on 5,000 machine hours. Compute total product cost of Job 615. 3. Assume Business Solutions uses activity-based costing. (a) Compute overhead activity rates. (b) Allocate overhead cost to Job 615. (d Compute total product cost of lol

After reading an article about activity-based costing in a trade journal for the furniture industry, Santana Rey decides to analyze overhead cost at Business Solutions. In a recent month, Santana found that setup costs, inspection costs, and utility costs made up most of the company's overhead. Additional information about overhead follows. Activity Set up Inspection Utilities Total Budgeted Cost $ 20,000 7,500 10,000 $ 37,500 The following data pertain to Job 615. Direct materials. Direct labor Overhead Setups Parts inspected Machine hours $ 2,500 $ 3,500 $ Budgeted Activity Usage 25 setups 5,000 parts inspected 5,000 machine hours (MH) 2 setups 400 parts inspected 600 machine hours Required: 1. Classify each of the three overhead activities as unit level, batch level, product level, or facility level. 2. Assume Business Solutions allocates overhead cost using a plantwide rate based on 5,000 machine hours. Compute total product cost of Job 615. 3. Assume Business Solutions uses activity-based costing. (a) Compute overhead activity rates. (b) Allocate overhead cost to Job 615. (d Compute total product cost of lol

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter4: Job-order Costing And Overhead Application
Section: Chapter Questions
Problem 27BEA: Use the following information for Brief Exercises 4-27 and 4-28: Quillen Company manufactures a...
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ces Machine hours Required: 1. Classify each of the three overhead activities as unit level, batch level, product level, or facility level. 2. Assume Business Solutions allocates overhead cost using a plantwide rate based on 5,000 machine hours. Compute total product cost of Job 615. 3. Assume Business Solutions uses activity-based costing. (a) Compute overhead activity rates. (b) Allocate overhead cost to Job 615. (c) Compute total product cost of Job 615. Required 1 Required 2 a. Compute overhead activity rates Activity Setup Inspection Utilities Assume Business Solutions uses activity-based costing. (a) Compute overhead activity rates. (b) Allocate overhead cost to Job 615. (c) Compute total product cost of Job 615. (Round "Activity Rate" to 2 decimal places.) 2 Direct Materials Direct Labor Overhead Product Cost per setup per part per MH b. Allocate overhead to Job 615 based on actual activity usage Activity Allocated Cost Setup Inspection Utilities Total allocated cost $ 0 c. Total product cost of Job 615 based on activity-based costing Job 615 -0³ F2 W 3 600 machine hours Required 3 80 F3 E S D $ + Activity Rate $ 4 < Required 2 F4 R F 65⁰ % 모 F5 T Required 3 > < Prev 6 1 of 4 F6 MacBook Air Y 27 ‒‒‒ & Next > F7 U * 00 8 DII F8 I 9 DA F9 G H J K O O
Transcribed Image Text:ces Machine hours Required: 1. Classify each of the three overhead activities as unit level, batch level, product level, or facility level. 2. Assume Business Solutions allocates overhead cost using a plantwide rate based on 5,000 machine hours. Compute total product cost of Job 615. 3. Assume Business Solutions uses activity-based costing. (a) Compute overhead activity rates. (b) Allocate overhead cost to Job 615. (c) Compute total product cost of Job 615. Required 1 Required 2 a. Compute overhead activity rates Activity Setup Inspection Utilities Assume Business Solutions uses activity-based costing. (a) Compute overhead activity rates. (b) Allocate overhead cost to Job 615. (c) Compute total product cost of Job 615. (Round "Activity Rate" to 2 decimal places.) 2 Direct Materials Direct Labor Overhead Product Cost per setup per part per MH b. Allocate overhead to Job 615 based on actual activity usage Activity Allocated Cost Setup Inspection Utilities Total allocated cost $ 0 c. Total product cost of Job 615 based on activity-based costing Job 615 -0³ F2 W 3 600 machine hours Required 3 80 F3 E S D $ + Activity Rate $ 4 < Required 2 F4 R F 65⁰ % 모 F5 T Required 3 > < Prev 6 1 of 4 F6 MacBook Air Y 27 ‒‒‒ & Next > F7 U * 00 8 DII F8 I 9 DA F9 G H J K O O
es After reading an article about activity-based costing in a trade journal for the furniture industry, Santana Rey decides to analyze overhead cost at Business Solutions. In a recent month, Santana found that setup costs, inspection costs, and utility costs made up most of the company's overhead. Additional information about overhead follows. Activity Set up Inspection Utilities Total The following data pertain to Job 615. Direct materials Direct labor Overhead Setups Parts inspected Machine hours 2 Required 1 Budgeted Cost $ 20,000 Required: 1. Classify each of the three overhead activities as unit level, batch level, product level, or facility level. 2. Assume Business Solutions allocates overhead cost using a plantwide rate based on 5,000 machine hours. Compute total product cost of Job 615. Department 3. Assume Business Solutions uses activity-based costing. (a) Compute overhead activity rates. (b) Allocate overhead cost to Job 615. (c) Compute total product cost of Job 615. Job 615 7,500 10,000 $ 37,500 F2 Required 2 Job 615 Total product cost of Job 615 W Assume Business Solutions allocates overhead cost using a plantwide rate based on 5,000 machine hours. Compute total product cost of Job 615. (Round "Overhead rate" to 2 decimal places.) Allocate overhead to Job 615 using plantwide rate Machine Hours Used $ # 3 $ 2,500 $ 3,500 Plantwide Overhead Rate Direct Materials 20 F3 E 2 setups 400 parts inspected 600 machine hours Required 3 S D Budgeted Activity Usage 25 setups 5,000 parts inspected 5,000 machine hours (MH) Direct Labor 4 F4 R F Overhead Allocated Overhead % 5 Product Cost $ Ų F5 T G 0 Prev <6 1 of 4 MacBook Air F6 Y & 7 H Next > F7 U * 00 8 J DII F8 - ( 9 F9 K -O O 0
Transcribed Image Text:es After reading an article about activity-based costing in a trade journal for the furniture industry, Santana Rey decides to analyze overhead cost at Business Solutions. In a recent month, Santana found that setup costs, inspection costs, and utility costs made up most of the company's overhead. Additional information about overhead follows. Activity Set up Inspection Utilities Total The following data pertain to Job 615. Direct materials Direct labor Overhead Setups Parts inspected Machine hours 2 Required 1 Budgeted Cost $ 20,000 Required: 1. Classify each of the three overhead activities as unit level, batch level, product level, or facility level. 2. Assume Business Solutions allocates overhead cost using a plantwide rate based on 5,000 machine hours. Compute total product cost of Job 615. Department 3. Assume Business Solutions uses activity-based costing. (a) Compute overhead activity rates. (b) Allocate overhead cost to Job 615. (c) Compute total product cost of Job 615. Job 615 7,500 10,000 $ 37,500 F2 Required 2 Job 615 Total product cost of Job 615 W Assume Business Solutions allocates overhead cost using a plantwide rate based on 5,000 machine hours. Compute total product cost of Job 615. (Round "Overhead rate" to 2 decimal places.) Allocate overhead to Job 615 using plantwide rate Machine Hours Used $ # 3 $ 2,500 $ 3,500 Plantwide Overhead Rate Direct Materials 20 F3 E 2 setups 400 parts inspected 600 machine hours Required 3 S D Budgeted Activity Usage 25 setups 5,000 parts inspected 5,000 machine hours (MH) Direct Labor 4 F4 R F Overhead Allocated Overhead % 5 Product Cost $ Ų F5 T G 0 Prev <6 1 of 4 MacBook Air F6 Y & 7 H Next > F7 U * 00 8 J DII F8 - ( 9 F9 K -O O 0
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