Aunt Dorothy Snacks produces different styles of sweet potato chips (ruffled, flat, thick-cut, gourmet) for different corporate customers. i (Click the icon to view additional information.) (Click the icon to view the additional information and data.) Data table Aunt Dorothy has identified the following activities related to yearly manufacturing overhead costs and cost drivers associated with producing sweet potato chips: Activity Manufacturing Overhead Preparation...... $ 630,000 Cooking and draining ....S 936,000 Packaging............. S 480,000 Print Cost Driver Preparation time Cooking and draining time Units packaged Done - X Compute the activity cost allocation rates for each activity assuming the following total estimated activity for the year: 15,000 preparation hours, 24,000 cooking and draining hours, and 8 million packages. More info Each style of sweet potato chip requires different preparation time, different cooking and draining times (depending on desired fat content), and different packaging (single serving versus bulk). Therefore, Aunt Dorothy has decided to try ABC to better capture the manufacturing overhead costs incurred by each style of chip. Print - X Done
Aunt Dorothy Snacks produces different styles of sweet potato chips (ruffled, flat, thick-cut, gourmet) for different corporate customers. i (Click the icon to view additional information.) (Click the icon to view the additional information and data.) Data table Aunt Dorothy has identified the following activities related to yearly manufacturing overhead costs and cost drivers associated with producing sweet potato chips: Activity Manufacturing Overhead Preparation...... $ 630,000 Cooking and draining ....S 936,000 Packaging............. S 480,000 Print Cost Driver Preparation time Cooking and draining time Units packaged Done - X Compute the activity cost allocation rates for each activity assuming the following total estimated activity for the year: 15,000 preparation hours, 24,000 cooking and draining hours, and 8 million packages. More info Each style of sweet potato chip requires different preparation time, different cooking and draining times (depending on desired fat content), and different packaging (single serving versus bulk). Therefore, Aunt Dorothy has decided to try ABC to better capture the manufacturing overhead costs incurred by each style of chip. Print - X Done
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Topic Video
Question
Aunt Dorothy
attached in ss below
thanks
Transcribed Image Text:Aunt Dorothy Snacks produces different styles of sweet potato chips (ruffled, flat, thick-cut, gourmet)
for different corporate customers.
i (Click the icon to view additional information.)
(Click the icon to view the additional information and data.)
C
Compute the activity cost allocation rates for each activity assuming the following total
estimated activity for the year: 15,000 preparation hours, 24,000 cooking and draining hours,
and 8 million packages.
Begin by determining the formula for calculating activity cost allocation rate, then calculate the rates for each activity. (Round the rate to the nearest cent.)
= Activity cost allocation rate
Transcribed Image Text:Aunt Dorothy Snacks produces different styles of sweet potato chips (ruffled, flat, thick-cut, gourmet)
for different corporate customers.
i (Click the icon to view additional information.)
(Click the icon to view the additional information and data.)
Data table
Aunt Dorothy has identified the following activities related to yearly manufacturing
overhead costs and cost drivers associated with producing sweet potato chips:
Activity
Manufacturing
Overhead
Preparation......
$ 630,000
Cooking and draining ....S 936,000
Packaging............. S 480,000
Print
Cost Driver
Preparation time
Cooking and draining time
Units packaged
Done
-
X
Compute the activity cost allocation rates for each activity assuming the following total
estimated activity for the year: 15,000 preparation hours, 24,000 cooking and draining hours,
and 8 million packages.
More info
Each style of sweet potato chip requires different preparation time, different
cooking and draining times (depending on desired fat content), and different
packaging (single serving versus bulk). Therefore, Aunt Dorothy has decided to try
ABC to better capture the manufacturing overhead costs incurred by each style of
chip.
Print
- X
Done
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