Allocate overhead using a single plantwide rate, multiple department rates, and activity-based costing Downhill Sports Inc. manufactures two products: snowboards and skis. The factory overhead incurred is as follows: Indirect labor Cutting Department Finishing Department Total The activity base associated with the two production departments is direct labor hours. The indirect labor can be assigned to two different activities as follows: Activity Production control Materials handling Total Snowboards Skis Budgeted Activity Cost Total The activity-base usage quantities and units produced for the two products follow: $90,000 270,000 $360,000 Number of Production Runs 450 50 $360,000 250,000 560,000 $1,170,000 500 Activity Base Number of production runs Number of moves Number of Moves 5,000 2,500 7,500 Direct Labor Hours- Cutting 2,000 3,000 5,000 Direct Labor Hours- Finishing 4,000 3,000 7,000 Units Produced 5,000 5,000 10,000
Allocate overhead using a single plantwide rate, multiple department rates, and activity-based costing Downhill Sports Inc. manufactures two products: snowboards and skis. The factory overhead incurred is as follows: Indirect labor Cutting Department Finishing Department Total The activity base associated with the two production departments is direct labor hours. The indirect labor can be assigned to two different activities as follows: Activity Production control Materials handling Total Snowboards Skis Budgeted Activity Cost Total The activity-base usage quantities and units produced for the two products follow: $90,000 270,000 $360,000 Number of Production Runs 450 50 $360,000 250,000 560,000 $1,170,000 500 Activity Base Number of production runs Number of moves Number of Moves 5,000 2,500 7,500 Direct Labor Hours- Cutting 2,000 3,000 5,000 Direct Labor Hours- Finishing 4,000 3,000 7,000 Units Produced 5,000 5,000 10,000
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 3PA: Activity-based and department rate product costing and product cost distortions Black and Blue...
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