Blue Water Manufacturing Company produces two types of speedboats. Blue Water provides the following data, relevant to allocating its annual overhead cost of $520,000: Blue Water Product Wave Rider Sea Cruiser Units per year 18,000 22,000 Machine hours/unit 4 6 Materials cost/unit $1,800 $2,400 Labor cost/unit $900 $1,100 Determine the overhead allocation rate if the allocation is made based on the cost driver of machine hours.

Blue Water Manufacturing Company produces two types of speedboats. Blue Water provides the following data, relevant to allocating its annual overhead cost of $520,000: Blue Water Product Wave Rider Sea Cruiser Units per year 18,000 22,000 Machine hours/unit 4 6 Materials cost/unit $1,800 $2,400 Labor cost/unit $900 $1,100 Determine the overhead allocation rate if the allocation is made based on the cost driver of machine hours.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 27E: Plata Company has identified the following overhead activities, costs, and activity drivers for the...

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XYZ Motors Corporation has identified activity centers to which overhead costs are assigned. The cost pool amounts for these centers and their selected cost drivers for 2018 are as follows: Activity Center - Utilities: Cost - P600,000 Cost Driver - 30,000 machine hours Activity Center - Scheduling sand setups Cost - P546,000 Cost Driver - 390 setups Activity Center - Material handling Cost - P1,280,000 Cost Driver - 800,000 kilos of materials The company's products and other operating statistics are as follows: Product A: Direct costs - P40,000 Machine hours - 15,000 Number of setups - 65 Kilos of material - 250,000 Number of units produced - 20,000 Direct labor hours - 16,000 Product B: Direct costs - P40,000 Machine hours - 5,000 Number of setups - 190 Kilos of material - 150,000 Number of units produced - 10,000 Direct labor hours - 9,000 Product C: Direct costs - P45,000 Machine hours - 10,000 Number of setups - 135 Kilos of material - 400,000 Number of units produced -…
Angler Industries produces a product which goes through two operations, Assembly and Finishing, before it is ready to be shipped. Next year's expected costs and activities are shown below. Assembly 248,888 DLH Finishing 154,000 DLH 68,000 MH 448,800 MH $440,000 Direct labor hours Machine hours Overhead costs Assume that Angler Industries allocates overhead using a plantvide overhead rate based on machine hours. How much total overhead will be assigned to a product that requires 1 direct labor hour and 3.90 machine hours in the Assembly Department, and 4.00 direct labor hours and 0.6 machine hours in the Finishing Department? Multiple Chaises O O O $21.50 $17.60 $2.00. $18.10 $ 677,680 $13.20.
Ho Cabinet Company has developed the following overhead cost formulas: Overhead Cost Cost Formula Depreciation $600 Lubrication $150 plus $0.70 per machine hour Utilities $0.50 per machine hour Based on these cost formulas, the total overhead cost expected for Ho Cabinet Company if 1,200 machine hours are worked is:
Ole Company manufactures two products, Product A and Product B. Currently, machine hours are used to allocate the overhead costs to the two products. Ole Company is considering adopting an activity-based costing system. If so, overhead costs will be traced to the following activities: Activities Machining Quality Control Material Moves Activity cost pools $300,000 $200,000 $400,000 Cost Drivers Machine Hours Number of inspections Number of moves Product A 30,000 400 2,000 Product B 20,000 600 6,000 (a) Calculate the total overhead cost assigned to Product A under the current system. (b) Calculate the total overhead cost for Product A if the company implements activity-based costing system. (c) Briefly explain which costing method gives a more accurate picture of the costs. (d) Suppose you are the management accountant in a university. List any three (3)activities commonly carried out in universities and identify an appropriate cost driver for each activity.
Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.)
Elkin Company manufactures wheel rims. The controller expects the following ABC allocation rates for 2024: Activity Allocation Base Predetermined Overhead Allocation Rate Materials handling Number of parts $2.00 per part Machine setup Number of setups 700.00 per setup Insertion of parts Number of parts 25.00 per part Finishing Number of finishing hours 50.00 per hour Elkin produces two wheel rim models: standard and deluxe. Expected data for 2024 are as follows: Standard Deluxe Parts per rim 8.0 9.0 Setups per 500 rims 16.0 16.0 Finishing hours per rim 2.0 3.5 Total direct labor hours per rim 3.0 7.0 The company expects to produce 500 units of each model during the year. Requirement 1. Compute the total estimated indirect manufacturing cost for 2024. Begin by selecting the formula to compute the total estimated overhead (OH) costs.…
Hammer Company produces a variety of electronic equipment. One of its plants produces two laser printers: The Deluxe and the Regular. At the beginning of the year 2019, the following data were prepared for this plant: Deluxe Regular Quantity 20 000 80 000 Selling price $90 $75 Unit direct cost $53 $48 In addition, the following information was provided so that overhead costs could be assigned to each product: Activity name Activity Cost Activity driver Deluxe Regular Set-up $200,000 Number of set-up 3 000 5 000 Machining 800,000 Machine hours 10 000 30 000 Engineering 600,000 Engineering hours 100 000 50 000 Packing 100,000 Packing orders 1 000 4 000 Total overhead costs $1,700,000 Required: Calculate the production overhead cost allocated to each product in 2019 using machine-hours as the cost driver (traditional costing system). Calculate the…
What is the unit production cost for each model?
Maching hours Production runs 9,800 20 21,600 16 5,900 28 Requlred: a. Calculate the activity rate for each activity, (Round your answers to 2 decimal places.) Activlty Pool Activity Rate Material Handling Machine Maintenance 37 Setups b. Determine the amount of indirect costs assigned to each of the products. (Do not round your intermediate calculations. Round your answers to 2 declmal places.) Models Cost Econamy Standard Premium
Splish Brothers is a trucking company. It provides local, short-haul, and long-haul services. It has developed the following three cost pools. Activity Cost Pool Cost Drivers EstimatedOverhead Estimated Use ofCost Driverper Activity Loading and unloading Number of pieces $97,130 88,300 Travel Miles driven 443,250 591,000 Logistics Hours 82,880 2,960 (a) Compute the activity-based overhead rates for each pool. (Round answers to 2 decimal places, e.g. 12.75.) Activity Cost Pool Activity-BasedOverhead Rate Loading and unloading per piece Travel per mile Logistics per hour Please fill in the table.
How do I determine the cost of one unit of SW 100 and SG 150, assuming department overhead rates are used. Overhead is assigned based on machine hours in both departments. Round t two decimal places, if necessary.
A company produces pool pumps. Overhead costs have been identified as follows: Activity Pool Cost Material handling Machine maintenance Setups Cost Driver Number of moves Number of machine hours 14 Number of production runs $ 70,840.00 73,000.00 82,038.00 Total Activity 460 36,500 66 Number of moves Economy 10,080 162 The company makes three models of pumps with the following activity demands: Units produced Standard 21,000 132 Premium 3,545 166 Machine hours 9,550 21,800 5,150 Production runs 17 17 32 Required: a. Calculate the activity rate for each activity. b. Determine the amount of indirect costs assigned to each of the products. Complete this question by entering your answers in the tabs below. Required A Required B Determine the amount of indirect costs assigned to each of the products. Note: Do not round your intermediate calculations. Round your answers to 2 decimal places.