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Calculate activity-based overhead rate for each activity. (Round answers to 2 decimal places, e.g. 12.25.) Activity. Purchasing Handling materials Production Inspecting Setting up machines $ Inventory control $ Utilities $ $ $ Overhead Rate per order per move per D/L hour per setup per inspection per component per sq. ft.

Calculate activity-based overhead rate for each activity. (Round answers to 2 decimal places, e.g. 12.25.) Activity. Purchasing Handling materials Production Inspecting Setting up machines $ Inventory control $ Utilities $ $ $ Overhead Rate per order per move per D/L hour per setup per inspection per component per sq. ft.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Activity Cost Pools Purchasing Handling materials Production (cutting, milling, finishing) Setting up machines Inspecting Inventory control (raw materials and finished goods) Utilities Direct materials Direct labor Machine hours Direct labor hours Direct labor Machine hours Activity Steve Hannon, sales manager, has received an order for 250 stairways from Community Builders, Inc., a large housing development contractor. At Steve's request, Bill prepares cost estimates for producing components for 250 stairways so Steve can submit a contract price per stairway to Community Builders. He accumulates the following data for the production of 250 stairways. Purchasing Handling materials Direct labor hours Number of purchase orders Number of material moves Number of machine setups Number of inspections Number of components Number of square feet occupied Production $104,200 $112,200 Inspecting 15,000 Inventory control Utilities $ Setting up machines $ $ $ $ Cost Drivers 5,300 $ Number of orders Number of moves Direct labor hours Number of setups Number of inspections Number of components Square feet occupied $ Calculate activity-based overhead rate for each activity. (Round answers to 2 decimal places, e.g. 12.25.) Stimated Use Cost Drivers $112,200 Overhead Rate 15,000 5,300 60 800 100 450 16,000 8,000 per order per move per setup 100,000 1,250 per D/L hour 600 per sq. ft. 8.000 168,000 6.000 per inspection 90,000 per component
Transcribed Image Text:Activity Cost Pools Purchasing Handling materials Production (cutting, milling, finishing) Setting up machines Inspecting Inventory control (raw materials and finished goods) Utilities Direct materials Direct labor Machine hours Direct labor hours Direct labor Machine hours Activity Steve Hannon, sales manager, has received an order for 250 stairways from Community Builders, Inc., a large housing development contractor. At Steve's request, Bill prepares cost estimates for producing components for 250 stairways so Steve can submit a contract price per stairway to Community Builders. He accumulates the following data for the production of 250 stairways. Purchasing Handling materials Direct labor hours Number of purchase orders Number of material moves Number of machine setups Number of inspections Number of components Number of square feet occupied Production $104,200 $112,200 Inspecting 15,000 Inventory control Utilities $ Setting up machines $ $ $ $ Cost Drivers 5,300 $ Number of orders Number of moves Direct labor hours Number of setups Number of inspections Number of components Square feet occupied $ Calculate activity-based overhead rate for each activity. (Round answers to 2 decimal places, e.g. 12.25.) Stimated Use Cost Drivers $112,200 Overhead Rate 15,000 5,300 60 800 100 450 16,000 8,000 per order per move per setup 100,000 1,250 per D/L hour 600 per sq. ft. 8.000 168,000 6.000 per inspection 90,000 per component
Bramble Stairs Co. designs and builds factory-made premium wooden stairways for homes. The manufactured stairway components (spindles, risers, hangers, hand rails) permit installation of stairways of varying lengths and widths. All are of white oak wood. Budgeted manufacturing overhead costs for the year 2022 are as follows. Overhead Cost Pools Purchasing Handling materials Production (cutting, milling, finishing) Setting up machines Inspecting Inventory control (raw materials and finished goods) Utilities Total budgeted overhead costs Amount $75,000 82,000 220,000 95,000 96,000 126,000 450,000 $1.144,000 For the last 4 years, Bramble Stairs Co. has been charging overhead to products on the basis of machine hours. For the year 2022. 100,000 machine hours are budgeted. Jeremy Nolan, owner-manager of Bramble Stairs Co., recently directed his accountant, Bill Seagren, to implement the activity-based costing system that he has repeatedly proposed. At Jeremy Nolan's request, Bill and the production foreman identify the following cost drivers and their usage for the previously budgeted overhead cost pools.
Transcribed Image Text:Bramble Stairs Co. designs and builds factory-made premium wooden stairways for homes. The manufactured stairway components (spindles, risers, hangers, hand rails) permit installation of stairways of varying lengths and widths. All are of white oak wood. Budgeted manufacturing overhead costs for the year 2022 are as follows. Overhead Cost Pools Purchasing Handling materials Production (cutting, milling, finishing) Setting up machines Inspecting Inventory control (raw materials and finished goods) Utilities Total budgeted overhead costs Amount $75,000 82,000 220,000 95,000 96,000 126,000 450,000 $1.144,000 For the last 4 years, Bramble Stairs Co. has been charging overhead to products on the basis of machine hours. For the year 2022. 100,000 machine hours are budgeted. Jeremy Nolan, owner-manager of Bramble Stairs Co., recently directed his accountant, Bill Seagren, to implement the activity-based costing system that he has repeatedly proposed. At Jeremy Nolan's request, Bill and the production foreman identify the following cost drivers and their usage for the previously budgeted overhead cost pools.
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