I need working for both the requirement a and b please answer within the format by providing formula the detailed workingPlease provide answer in text (Without image)Please provide answer in text (Without image)Please provide answer in text (Without image) Question 1 of 5Direct labor costsSheffield, Inc. produces two types of gas grills: a family model and a deluxe model. Sheffield's controller has decided to use a plantwideoverhead rate based on direct labor costs. The president of the company recently heard of activity-based costing and wants to seehow the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup.Presented below is information related to the company's operations:Machine hoursSetup hours(a)Family Model$78,3002,000Your answer is correct.Overhead rate200Deluxe Model$156,6002,0000.5/2800Total estimated overhead costs are $469,800. Overhead cost allocated to the machining activity cost pool is $281,880 and $187,920is allocated to the machine setup activity cost pool.⠀Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, e.g. 15.25.) Question 1 of 5(b)e Textbook and Ivedia<* Your answer is incorrect.MachiningMachine set upCompute the overhead rates using the activity-based costing approach. (Round answers to 2 decimal places, e.g. 15.25.)Save for Later$>$eTextbook and MediaOverhead Rate117.45469.8per hour0.5/2 =per hourAttempts: 1 of 5 usedAttempts: 2 of 5 usedSubmit AnswerI

The benefits of activity-based costing can help organizations improve their cost management and make…

(b) * Your answer is incorrect. Compute the overhead rates using the activity-based costing approach. (Round answers to 2 decimal places, e.g. 15.25.) Machining Machine set up $ Save for Later $ eTextbook and Media Overhead Rate 117.45 469.8 per hour Attempts: 1 of 5 used per hour Attempts: 2 of 5 used Submit Answer

(b) * Your answer is incorrect. Compute the overhead rates using the activity-based costing approach. (Round answers to 2 decimal places, e.g. 15.25.) Machining Machine set up $ Save for Later $ eTextbook and Media Overhead Rate 117.45 469.8 per hour Attempts: 1 of 5 used per hour Attempts: 2 of 5 used Submit Answer

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 5PB: Wrappers Tape makes two products: Simple and Removable. It estimates it will produce 369,991 units...

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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

I need working for both the requirement a and b

please answer within the format by providing formula the detailed working
Please provide answer in text (Without image)
Please provide answer in text (Without image)
Please provide answer in text (Without image)

Question 1 of 5
Direct labor costs
Sheffield, Inc. produces two types of gas grills: a family model and a deluxe model. Sheffield's controller has decided to use a plantwide
overhead rate based on direct labor costs. The president of the company recently heard of activity-based costing and wants to see
how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup.
Presented below is information related to the company's operations:
Machine hours
Setup hours
(a)
Family Model
$78,300
2,000
Your answer is correct.
Overhead rate
200
Deluxe Model
$156,600
2,000
0.5/2
800
Total estimated overhead costs are $469,800. Overhead cost allocated to the machining activity cost pool is $281,880 and $187,920
is allocated to the machine setup activity cost pool.
⠀
Compute the overhead rate using the traditional (plantwide) approach. (Round answer to 2 decimal places, e.g. 15.25.)

Question 1 of 5
(b)
e Textbook and Ivedia
<
* Your answer is incorrect.
Machining
Machine set up
Compute the overhead rates using the activity-based costing approach. (Round answers to 2 decimal places, e.g. 15.25.)
Save for Later
$
>
$
eTextbook and Media
Overhead Rate
117.45
469.8
per hour
0.5/2 =
per hour
Attempts: 1 of 5 used
Attempts: 2 of 5 used
Submit Answer
I

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Wrappers Tape makes two products: Simple and Removable. It estimates it will produce 369,991 units of Simple and 146,100 of Removable, and the overhead for each of its cost pools is as follows: It has also estimated the activities for each cost driver as follows: Â How much is the overhead allocated to each unit of Simple and Removable?
Potterii sells its products to large box stores and recently added a retail line of products to sell directly to consumers. These estimates are to be used in determining the overhead allocation rate for ABC: What would be the predetermined rate for each cost pool?
Use the following information for Brief Exercises 4-34 and 4-35: Sanjay Company manufactures a product in a factory that has two producing departments, Assembly and Painting, and two support departments, S1 and S2. The activity driver for S1 is square footage, and the activity driver for S2 is number of machine hours. The following data pertain to Sanjay: Brief Exercises 4-34 (Appendix 4B) Assigning Support Department Costs by Using the Direct Method Refer to the information for Sanjay Company above. Required: 1. Calculate the cost assignment ratios to be used under the direct method for Departments S1 and S2. (Note: Each support department will have two ratiosone for Assembly and the other for Painting.) 2. Allocate the support department costs to the producing departments by using the direct method.
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Bumblebee Mobiles manufactures a line of cell phones. The management has identified the following overhead costs and related cost drivers for the coming year. The following were incurred in manufacturing two of their cell phones, Bubble and Burst, during the first quarter. REQUIREMENT Review the worksheet called ABC that follows these requirements. You have been asked to determine the cost of each product using an activity-based cost system. Note that the problem information is already entered into the Data Section of the ABC worksheet.
Evans, Inc., has a unit-based costing system. Evanss Miami plant produces 10 different electronic products. The demand for each product is about the same. Although they differ in complexity, each product uses about the same labor time and materials. The plant has used direct labor hours for years to assign overhead to products. To help design engineers understand the assumed cost relationships, the Cost Accounting Department developed the following cost equation. (The equation describes the relationship between total manufacturing costs and direct labor hours; the equation is supported by a coefficient of determination of 60 percent.) Y=5,000,000+30X,whereX=directlaborhours The variable rate of 30 is broken down as follows: Because of competitive pressures, product engineering was given the charge to redesign products to reduce the total cost of manufacturing. Using the above cost relationships, product engineering adopted the strategy of redesigning to reduce direct labor content. As each design was completed, an engineering change order was cut, triggering a series of events such as design approval, vendor selection, bill of materials update, redrawing of schematic, test runs, changes in setup procedures, development of new inspection procedures, and so on. After one year of design changes, the normal volume of direct labor was reduced from 250,000 hours to 200,000 hours, with the same number of products being produced. Although each product differs in its labor content, the redesign efforts reduced the labor content for all products. On average, the labor content per unit of product dropped from 1.25 hours per unit to one hour per unit. Fixed overhead, however, increased from 5,000,000 to 6,600,000 per year. Suppose that a consultant was hired to explain the increase in fixed overhead costs. The consultants study revealed that the 30 per hour rate captured the unit-level variable costs; however, the cost behavior of other activities was quite different. For example, setting up equipment is a step-fixed cost, where each step is 2,000 setup hours, costing 90,000. The study also revealed that the cost of receiving goods is a function of the number of different components. This activity has a variable cost of 2,000 per component type and a fixed cost that follows a step-cost pattern. The step is defined by 20 components with a cost of 50,000 per step. Assume also that the consultant indicated that the design adopted by the engineers increased the demand for setups from 20,000 setup hours to 40,000 setup hours and the number of different components from 100 to 250. The demand for other non-unit-level activities remained unchanged. The consultant also recommended that management take a look at a rejected design for its products. This rejected design increased direct labor content from 250,000 hours to 260,000 hours, decreased the demand for setups from 20,000 hours to 10,000 hours, and decreased the demand for purchasing from 100 component types to 75 component types, while the demand for all other activities remained unchanged. Required: 1. Using normal volume, compute the manufacturing cost per labor hour before the year of design changes. What is the cost per unit of an average product? 2. Using normal volume after the one year of design changes, compute the manufacturing cost per hour. What is the cost per unit of an average product? 3. Before considering the consultants study, what do you think is the most likely explanation for the failure of the design changes to reduce manufacturing costs? Now use the information from the consultants study to explain the increase in the average cost per unit of product. What changes would you suggest to improve Evanss efforts to reduce costs? 4. Explain why the consultant recommended a second look at a rejected design. Provide computational support. What does this tell you about the strategic importance of cost management?
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Determine the difference in allocation between the two approaches