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Assume Heartwood Cabinets uses ABC costing to apply overhead to its products. The cost accountants have identified two different cost pools. The first includes all the costs associated with manufacturing cabinets. The second includes all the costs associated with machine setup, as follows: Heartwood Manufacturing Overhead (based on prior year data) Manufacturing Operations Overhead Costs Units to be produced (from Production budget) Labor hours required for planned production Variable Overhead Indirect materials and supplies Materials handling Indirect labor Fixed manufacturing overhead Factory rent Machine depreciation Supervisor labor Utilities Maintenance and repairs Property taxes 105,000 145,500 $ 3.00 436,500 $ 1.00 $ 1.25 145,500 181,875 $ 763,875.00 $ 24,000.00 $ 13,000.00 $ 30,000.00 $ 19,976.00 $ 9,999.00 $ 12,150.00 Machine Setup Overhead Costs Labor hours required for machine setup Variable Overhead Supplies Indirect labor Utilities Fixed Overhead Depreciation Supervision Total Manufacturing Operations Overhead Cost Total Machine Setup Overhead Costs Total Manufacturing Overhead Costs Required: 15,000 $ 109,125.00 $ 873,000.00 $ 10.00 $ 150,000.00 $ 25.00 $ 15.00 $ 375,000.00 $225,000.00 $ 750,000.00 $ 25,000.00 $ 35,000.00 $ 60,000.00 $ 810,000.00 $ 873,000.00 $ 810,000.00 $ 1,683,000.00 Use the information above to complete the following table allocating the overhead costs to each type of pine cabinet. Note: Do not round intermediate calculations. Round your final answers to 2 decimals. Heartwood Manufacturing Overhead Units to Direct Manufacturing Predetermined Manufacturing Produce Labor Hours Operations Required 1 Unit Overhead Rate Direct Machine Setup Labor Hours Required for 1 unit Predetermined Machine Setup Overhead Rate Manufacturing Overhead Pine-Arch 14,500 1 Pine-Cathedral 15,000 1 Pine-Shaker 20,000 1.5 Pine-Slab 25,000 1 Pine-Beadboard 30,500 2 Total $ 0.00

Assume Heartwood Cabinets uses ABC costing to apply overhead to its products. The cost accountants have identified two different cost pools. The first includes all the costs associated with manufacturing cabinets. The second includes all the costs associated with machine setup, as follows: Heartwood Manufacturing Overhead (based on prior year data) Manufacturing Operations Overhead Costs Units to be produced (from Production budget) Labor hours required for planned production Variable Overhead Indirect materials and supplies Materials handling Indirect labor Fixed manufacturing overhead Factory rent Machine depreciation Supervisor labor Utilities Maintenance and repairs Property taxes 105,000 145,500 $ 3.00 436,500 $ 1.00 $ 1.25 145,500 181,875 $ 763,875.00 $ 24,000.00 $ 13,000.00 $ 30,000.00 $ 19,976.00 $ 9,999.00 $ 12,150.00 Machine Setup Overhead Costs Labor hours required for machine setup Variable Overhead Supplies Indirect labor Utilities Fixed Overhead Depreciation Supervision Total Manufacturing Operations Overhead Cost Total Machine Setup Overhead Costs Total Manufacturing Overhead Costs Required: 15,000 $ 109,125.00 $ 873,000.00 $ 10.00 $ 150,000.00 $ 25.00 $ 15.00 $ 375,000.00 $225,000.00 $ 750,000.00 $ 25,000.00 $ 35,000.00 $ 60,000.00 $ 810,000.00 $ 873,000.00 $ 810,000.00 $ 1,683,000.00 Use the information above to complete the following table allocating the overhead costs to each type of pine cabinet. Note: Do not round intermediate calculations. Round your final answers to 2 decimals. Heartwood Manufacturing Overhead Units to Direct Manufacturing Predetermined Manufacturing Produce Labor Hours Operations Required 1 Unit Overhead Rate Direct Machine Setup Labor Hours Required for 1 unit Predetermined Machine Setup Overhead Rate Manufacturing Overhead Pine-Arch 14,500 1 Pine-Cathedral 15,000 1 Pine-Shaker 20,000 1.5 Pine-Slab 25,000 1 Pine-Beadboard 30,500 2 Total $ 0.00

Managerial Accounting
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 3PB: Activity-based department rate product costing and product cost distortions Big Sound Inc....
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Assume Heartwood Cabinets uses ABC costing to apply overhead to its products. The cost accountants have identified two different cost pools. The first includes all the costs associated with manufacturing cabinets. The second includes all the costs associated with machine setup, as follows: Heartwood Manufacturing Overhead (based on prior year data) Manufacturing Operations Overhead Costs Units to be produced (from Production budget) Labor hours required for planned production Variable Overhead Indirect materials and supplies Materials handling Indirect labor Fixed manufacturing overhead Factory rent Machine depreciation Supervisor labor Utilities Maintenance and repairs Property taxes 105,000 145,500 $ 3.00 436,500 $ 1.00 $ 1.25 145,500 181,875 $ 763,875.00 $ 24,000.00 $ 13,000.00 $ 30,000.00 $ 19,976.00 $ 9,999.00 $ 12,150.00 Machine Setup Overhead Costs Labor hours required for machine setup Variable Overhead Supplies Indirect labor Utilities Fixed Overhead Depreciation Supervision Total Manufacturing Operations Overhead Cost Total Machine Setup Overhead Costs Total Manufacturing Overhead Costs Required: 15,000 $ 109,125.00 $ 873,000.00 $ 10.00 $ 150,000.00 $ 25.00 $ 15.00 $ 375,000.00 $225,000.00 $ 750,000.00 $ 25,000.00 $ 35,000.00 $ 60,000.00 $ 810,000.00 $ 873,000.00 $ 810,000.00 $ 1,683,000.00 Use the information above to complete the following table allocating the overhead costs to each type of pine cabinet. Note: Do not round intermediate calculations. Round your final answers to 2 decimals. Heartwood Manufacturing Overhead Units to Direct Manufacturing Predetermined Manufacturing Produce Labor Hours Operations Required 1 Unit Overhead Rate Direct Machine Setup Labor Hours Required for 1 unit Predetermined Machine Setup Overhead Rate Manufacturing Overhead Pine-Arch 14,500 1 Pine-Cathedral 15,000 1 Pine-Shaker 20,000 1.5 Pine-Slab 25,000 1 Pine-Beadboard 30,500 2 Total $ 0.00
Transcribed Image Text:Assume Heartwood Cabinets uses ABC costing to apply overhead to its products. The cost accountants have identified two different cost pools. The first includes all the costs associated with manufacturing cabinets. The second includes all the costs associated with machine setup, as follows: Heartwood Manufacturing Overhead (based on prior year data) Manufacturing Operations Overhead Costs Units to be produced (from Production budget) Labor hours required for planned production Variable Overhead Indirect materials and supplies Materials handling Indirect labor Fixed manufacturing overhead Factory rent Machine depreciation Supervisor labor Utilities Maintenance and repairs Property taxes 105,000 145,500 $ 3.00 436,500 $ 1.00 $ 1.25 145,500 181,875 $ 763,875.00 $ 24,000.00 $ 13,000.00 $ 30,000.00 $ 19,976.00 $ 9,999.00 $ 12,150.00 Machine Setup Overhead Costs Labor hours required for machine setup Variable Overhead Supplies Indirect labor Utilities Fixed Overhead Depreciation Supervision Total Manufacturing Operations Overhead Cost Total Machine Setup Overhead Costs Total Manufacturing Overhead Costs Required: 15,000 $ 109,125.00 $ 873,000.00 $ 10.00 $ 150,000.00 $ 25.00 $ 15.00 $ 375,000.00 $225,000.00 $ 750,000.00 $ 25,000.00 $ 35,000.00 $ 60,000.00 $ 810,000.00 $ 873,000.00 $ 810,000.00 $ 1,683,000.00 Use the information above to complete the following table allocating the overhead costs to each type of pine cabinet. Note: Do not round intermediate calculations. Round your final answers to 2 decimals. Heartwood Manufacturing Overhead Units to Direct Manufacturing Predetermined Manufacturing Produce Labor Hours Operations Required 1 Unit Overhead Rate Direct Machine Setup Labor Hours Required for 1 unit Predetermined Machine Setup Overhead Rate Manufacturing Overhead Pine-Arch 14,500 1 Pine-Cathedral 15,000 1 Pine-Shaker 20,000 1.5 Pine-Slab 25,000 1 Pine-Beadboard 30,500 2 Total $ 0.00
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