Atlanta Systems produces two different products, Product A, which sells for $450 per unit, and Product B, which sells for $800 per unit, using three different activities: Design, which uses Engineering Hours as an activity driver; Machining, which uses machine hours as an activity driver; and Inspection, which uses number of batches as an activity driver. The cost of each activity and usage of the activity drivers are as follows: Usage by Product A Usage by Product B Cost Design (Engineering Hours) Machining (Machine Hours) Inspection (Batches) $ 190,000 $1,800,000 $ 160,000 108 142 2,160 2,840 42 38 Atlanta manufactures 12,500 units of Product A and 10,200 units of Product B per month. Each unit of Product A uses $100 of direct materials and $45 of direct labor, while each unit of Product B uses $140 of direct materials and $75 of direct labor. Required: a. Calculate the activity rate for design. Rate for Design per hour b. Calculate the activity rate for machining. Rate for Machining per hour

Atlanta Systems produces two different products, Product A, which sells for $450 per unit, and Product B, which sells for $800 per unit, using three different activities: Design, which uses Engineering Hours as an activity driver; Machining, which uses machine hours as an activity driver; and Inspection, which uses number of batches as an activity driver. The cost of each activity and usage of the activity drivers are as follows: Usage by Product A Usage by Product B Cost Design (Engineering Hours) Machining (Machine Hours) Inspection (Batches) $ 190,000 $1,800,000 $ 160,000 108 142 2,160 2,840 42 38 Atlanta manufactures 12,500 units of Product A and 10,200 units of Product B per month. Each unit of Product A uses $100 of direct materials and $45 of direct labor, while each unit of Product B uses $140 of direct materials and $75 of direct labor. Required: a. Calculate the activity rate for design. Rate for Design per hour b. Calculate the activity rate for machining. Rate for Machining per hour

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

A company makes two products—Product A and B. Data regarding the two products follow: Direct Labor-Hours per Unit Annual Production Product A 0.75 20,000 units Product B 0.50 50,000 units Additional information is as follows: Product A requires $40 in direct materials per unit, and Product B requires $32. The direct labor wage rate is $18 per hour. The company’s activity-based absorption costing system has the following activity cost pools: Activity Cost Pool (and Activity Measures) Estimated Overhead Cost Expected Activity Product A Product B Total Machine setups (number of setups) $ 100,000 100 300 400 Special processing (machine-hours) $ 200,000 2,000 6,000 8,000 General factory (Direct labor-hours) $ 150,000 15,000 25,000 40,000
Stargate Corporation has established the following standards for the costs of one unit of its product. The standard production overhead costs per unit are based on direct-labor hours. Calculation for standard per unit cost is as follows: Std Cost Std Qty Std Price/Rate Direct Material $ 14.40 6.00 kg $ 2.40 per kg Direct Labor $ 3.00 0.40 hour $ 7.50 per hour Variable Overhead $ 4.00 0.40 hour $ 10.0 per hour Fixed Overhead $ 4.80 0.40 hour $ 12.0 per hour Total $ 26.20 *based on practical capacity of 2,500 direct-labor hour per month During December 2020, Henry purchased 30,000 kg of direct material at a total cost of $75,000. The total wages for December were $20,000, 75% of which were for direct labor. Henry manufactured 4,500 units of product during December 2020, using 28,000kg of the direct material purchased in December and 2,100 direct-labor hours. Actual variable and fixed overhead cost were $23,100…
Fluegge Incorporated has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours. Inputs Standard Quantity or Hours per Unit of Output Standard Price or Rate Direct materials 5.7 liters $ 5.40 per liter Direct labor 0.70 hours $ 20.60 per hour Variable manufacturing overhead 0.70 hours $ 5.50 per hour The company has reported the following actual results for the product for December: Actual output 4,100 units Raw materials purchased 25,100 liters Actual price of raw materials $ 4.80 per liter Actual cost of raw materials purchased $ 120,480 Raw materials used in production 23,360 liters Actual direct labor-hours 2,700 hours Actual direct labor rate $ 21.20 per hour Actual direct labor cost $ 57,240 Actual variable overhead rate $ 5.90 per hour Actual variable overhead cost $ 15,930 The raw materials price variance…
Edney Company employs a standard cost system for product costing. The per-unit standard cost of its product is: Raw materials Direct labor (2 direct labor hours x $8.00 per hour) Manufacturing overhead (2 direct labor hours x $12.20 per hour) $ 14.00 16.00 24.40 $ 54.40 Total standard cost per unit The manufacturing overhead rate is based on a normal capacity level of 600,000 direct labor hours. The firm has the following annual manufacturing overhead budget: Variable Fixed $ 3,960,000 3,360,000 $ 7,320,000 Edney incurred $434,550 in direct labor cost for 54,100 direct labor hours to manufacture 26,000 units in November. Other costs incurred in November include $296,000 for fixed manufacturing overhead and $342,000 for variable manufacturing overhead. Required: 1. Determine each of the following for November. [Note: Indicate whether each variance is favorable (F) or unfavorable (U).] a. The variable overhead rate (spending) variance. b. The variable overhead efficiency variance. c. The…
A company which uses activity-based costing has two products: A and B. The annual production and sales of Product A is 12,000 units and of Product B is 10,500 units. There are three activity cost pools, with total cost and total activity as follows: Total Activity Product Product A Activity Cost Pool Total Cost Total Activity 1 Activity 2 Activity 3 52-54 $25,420 130 490 620 $38,400 $122,670 890 310 1,200 820 3,410 4,230 The activity-based costing cost per unit of Product A is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice $10.79 $1.60 $4.80 $3.10
Rex Industries has two products. They manufactured 12,540 units of product A and 8,255 units of product B. The data are: Activity in Estimated Cost Pool Overhead Product A Product B 1 $51,850 1,100 600 53,840 100 700 3 24,600 700 5,300 What is the activity rate for each cost pool? Round your answers to two decimal places. Activity in Activity Cost Pool Rate 1 $ 2 $ 3 $
Gable Company uses three activity pools. Each pool has a cost driver. Information for Gable Company follows: Total Cost of Pool $ 454,960 100,000 72,720 Estimated Cost Driver 96,800 10,000 505 Activity Pools Machining Designing costs Setup costs Suppose that Gable Company manufactures three products, A, B, and C. Information about these products follows: Product A Product B 38,000 4,000 40 Number of machine hours Number of design hours Number of batches Cost Driver Number of machine hours Number of design hours Number of batches Product A Product B Product C Total Overhead Assigned 48,000 2,200 170 Required: Using activity rates, determine the amount of overhead assigned to each product. Note: Do not round intermediate calculations. Round the final answer to nearest whole number. Product C 10,800 3,800 295
Gable Company uses three activity pools. Each pool has a cost driver. Information for Gable Company follows: Total Cost of Pool $ 380, 120 86,400 74,672 Estimated Cost Driver 88,400 9,000 525 Activity Pools Machining Designing costs Setup costs E4-5 (Algo) Assigning Costs Using Activity Proportions [LO 4-5, 4-6] Suppose that Gable Company manufactures three products, A, B, and C. Information about these products follows: Product A 34,000 3,600 60 Number of machine hours Number of design hours Number of batches Cost Driver Number of machine hours Number of design hours Number of batches Product A Product B Product C Total Overhead Assigned Product B Product C 10,400 3,400 285 Required: 1. Using activity proportions, determine the amount of overhead assigned to each product. Note: Do not round your intermediate calculations. Round your final answers to nearest whole number. 44,000 2,000 180
need answer with given information please