Benson Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity cost pools follow: Cost Cost driver Unit Level $ 55,100 1,900 labor hours. Activities. Batch Level $ 21,420 42 setups Product Level $ 10,000 Percentage of use Facility Level $ 154,000 14,000 units Production of 760 sets of cutting shears, one of the company's 20 products, took 280 labor hours and 8 setups and consumed 18 percent of the product-sustaining activities. Required a. Had the company used labor hours as a companywide allocation base, how much overhead would it have allocated to the cutting shears? b. How much overhead is allocated to the cutting shears using activity-based costing? c. Compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 760 units are produced. If direct product costs are $120 and the product is priced at 30 percent above cost for what price would the product sell under each allocation system? Complete this question by entering your answers in the tabs below.

Benson Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity cost pools follow: Cost Cost driver Unit Level $ 55,100 1,900 labor hours. Activities. Batch Level $ 21,420 42 setups Product Level $ 10,000 Percentage of use Facility Level $ 154,000 14,000 units Production of 760 sets of cutting shears, one of the company's 20 products, took 280 labor hours and 8 setups and consumed 18 percent of the product-sustaining activities. Required a. Had the company used labor hours as a companywide allocation base, how much overhead would it have allocated to the cutting shears? b. How much overhead is allocated to the cutting shears using activity-based costing? c. Compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 760 units are produced. If direct product costs are $120 and the product is priced at 30 percent above cost for what price would the product sell under each allocation system? Complete this question by entering your answers in the tabs below.

Name: price would the product sein under tali diivation system:Complete thi
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Description: price would the product sein under tali diivation system:Complete this question by entering your answers in the tabs below.Req A and BReq CCompute the overhead cost per unit for cutting shears first using activity-based costing and then using direct

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Pronghorn Industries has three activity cost pools and two products. It estimates production 2,000 units of Product BC113 and 1,000 of Product AD908. Having identified its activity cost pools and the cost drivers for each pool, Pronghorn accumulated the following data relative to those activity cost pools and cost drivers. Activity Cost Pools Machine setup Machining Packing (a) Annual Overhead Data Activity Cost Pools Machine setup Using the above data, do the following: Machining Packing Cost Drivers $ Setups $ Machine hours Orders Estimated Overhead Estimated Overhead $17,500 120,750 28,670 Use of Cost Drivers per Product Estimated Use of Cost Drivers per Activity 35 Prepare a schedule showing the computations of the activity-based overhead rates per cost driver. 4,830 470 Estimated Use of Cost Drivers per Activity setups machine hours Product BC113 orders 20 1,140 120 $ $ $ Product AD908 15 3,690 350 Activity-Based Overhead Rates per setup per machine hr. per order
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Campbell Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity cost pools follow: Cost Cost driver Unit Level $75,400 Req A and B 2,900 labor hours Production of 870 sets of cutting shears, one of the company's 20 products, took 160 labor hours and 7 setups and consumed 19 percent of the product-sustaining activities. Complete this question by entering your answers in the tabs below. Req C Allocated overhead Direct cost Total cost per unit Desired profit Sales price Required 8. Had the company used labor hours as a companywide allocation base, how much overhead would It have allocated to the cutting shears? b. How much overhead is allocated to the cutting shears using activity-based costing? c. Compute the overhead cost per unit for cutting shears first using activity-based costing and then using…
Required information Greenwood Company manufactures two products-14,000 units of Product Y and 6,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z: Activity Cost Pool Machining Machine setups Production design General factory Activity Measure Machining Number of setups Number of products Direct labor-hours Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Plantwide overhead rate Estimated Overhead Cost $ 192,000 $ 50,400 $ 76,000 $ 387,200 Product Y Product Z 7,200 50 2,800 70 1 1 7,200 8,800 per DLH Expected Activity 10,000 MHS 120 setups 2 products Required: 1. What is the company's plantwide overhead rate? (Round your answer to 2 decimal places.) 16,000 DLHS
Carlise Corp., which manufactures ceiling fans, currently has two product lines, the Indoor and the Outdoor. Carlise has to overhead of $132,720. Carlise has identified the following information about its overhead activity cost pools and the two product lines: Quantity/Amount Consumed by Indoor Line Quantity/Amount Consumed by Outdoor Line Activity Cost Pools Cost Driver Materials handling Number of moves Quality control Number of inspections Machine maintenance Number of machine hours Required: 1. Suppose Carlise used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount.) Indoor Model Outdoor Model Total Cost Assigned to Pool $21, 120 $71,760 4,600 inspections $39,840 29,000 machine hours 19,000 machine hours 600 moves 500 moves 5,800 inspections Overhead Assigned
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Rundle Manufacturing produces two keyboards, one for laptop computers and the other for desktop computers. The production process is automated, and the company has found activity-based costing useful in assigning overhead costs to its products. The company has identified five major activities involved in producing the keyboards. Activity Materials receiving & handling Production setup Assembly Quality inspection Packing and shipping Activity measures for the two kinds of keyboards follow: Laptops Desktops Required Labor Cost $ 1,310 1,200 Laptop keyboards Desktop keyboards Allocation Base Cost of material Number of setups Number of parts Inspection time Number of orders Material Number of Number of Cost $ 6,300 7,600 Cost Per Unit Setups 29 13 Parts 49 26 Allocation Rate 3% of material cost $102.00 per setup $3.00 per part $ 1.60 per minute $9.00 per order Inspection Time 7,400 minutes 4,800 minutes a. Compute the cost per unit of laptop and desktop keyboards, assuming that Rundle made…
Maxey & Sons manufactures two types of storage cabinets—Type A and Type B—and applies manufacturing overhead to all units at the rate of $120 per machine hour. Production information follows. Type A Type BAnticipated volume (units) 24,000 45,000 Direct-material cost per unit $ 28 $ 42 Direct-labor cost per unit 33 33 The controller, who is studying the use of activity-based costing, has determined that the firm’s overhead can be identified with three activities: manufacturing setups, machine processing, and product shipping. Data on the number of setups, machine hours, and outgoing shipments, which are the activities’ three respective cost drivers, follow. Type A Type B TotalSetups 140 100 240 Machine hours 48,000 67,500 115,500 Outgoing shipments 200 150 350 The firm’s total…
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Required information Greenwood Company manufactures two products-15,000 units of Product Y and 7,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z: Activity Cost Pool Machining Machine setups Production design General factory Activity Measure Machining Number of setups Number of products Direct labor-hours Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Estimated Overhead Cost $ 227,700 $ 153,908 Product Y Product Z 8,700 60 1 8,700 2,300 210 1 1,300 Expected Activity 11,000 MHS 270 setups $ 91,000. $ 257,000 2 products 10,000 DLHS 14. Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z? (Round your answers to 2…