Calculators P/L manufactures two types of products, Advanced and Simple, and applies manufacturing overhead toall units at the rate of $100 per machine hour. Production information follows.SimpleSetups (SU)Machine hours (MH)Outgoing shipment (OS)The total cost for each activity were:$20$151MSetups (SU)Machine hours (MH)Direct material costDirect labour costBudgeted volume (units)YOU determined that the firm's overhead can be identified with three activities:SimpleAdvanced200160,000100$30$15800,000Advanced300140,00080Total500300,000180$1.25M$35MOutgoing shipment (OS) $2M▪ Calculate the unit manufacturing cost of Simple and Advanced using Activity-Based Costing.

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Description: Calculators P/L manufactures two types of products, Advanced and Simple, and applies manufacturing overhead toall units at the rate of $100 per machine hour. Production information follows.SimpleSetups (SU)Machine hours (MH)Outgoing shipment (OS)The

The activity-based costing approach is a way of allocating overhead and indirect expenses to goods…

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Calculators P/L manufactures two types of products, Advanced and Simple, and applies manufacturing overhead to all units at the rate of $100 per machine hour. Production information follows. Simple Advanced $20 $15 1M Setups (SU) Machine hours (MH) Outgoing shipment (OS) The total cost for each activity were: Direct material cost Direct labour cost Budgeted volume (units) YOU determined that the firm's overhead can be identified with three activities: Simple $30 $15 800,000 200 160,000 100 Advanced 300 140,000 80 Total 500 300,000 180 Setups (SU) $1.25M Machine hours (MH) $35M Outgoing shipment (OS) $2M Calculate the unit manufacturing cost of Simple and Advanced using Activity-Based Costing.

Calculators P/L manufactures two types of products, Advanced and Simple, and applies manufacturing overhead to all units at the rate of $100 per machine hour. Production information follows. Simple Advanced $20 $15 1M Setups (SU) Machine hours (MH) Outgoing shipment (OS) The total cost for each activity were: Direct material cost Direct labour cost Budgeted volume (units) YOU determined that the firm's overhead can be identified with three activities: Simple $30 $15 800,000 200 160,000 100 Advanced 300 140,000 80 Total 500 300,000 180 Setups (SU) $1.25M Machine hours (MH) $35M Outgoing shipment (OS) $2M Calculate the unit manufacturing cost of Simple and Advanced using Activity-Based Costing.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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A manufacturer uses activity-based costing to assign overhead cost to products. Budgeted cost information for its activities follows. Budgeted Cost $ 210,600 Activity Cost Driver Purchase orders Square feet Budgeted Activity Usage 5,400 purchase orders 5,900 square feet 50 Setups Factory services 104,250 Setup 67,750 Setups Compute an activity rate for each activity. (Round your answers to 2 decimal places.) Activity Purchasing Activity Purchasing Factory services Setup Budgeted Cost 210,600 104,250 67,750 $ $ $ Budgeted Activity Usage Activity Rate
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Multiple Versus Single Overhead Rates, Activity Drivers Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Expected Cost Activity Driver Activity Capacity Number of setups Number of orders Machine hours Activity Setting up equipment $491,050 Ordering costs 336,600 Machine costs 898,800 Receiving 362,600 Receiving hours Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B $843,000 $455,000 8,200 1,600 Direct materials Direct labor Units completed Direct labor hours Number of setups Number of orders Machine hours $563,000 $459,000 15,600 6,800 360 6,900 23,900 3,200 The company's normal activity is 8,400 direct labor hours. Receiving hours 250 12,900 18,900 6,600 610 19,800 42,800 9,800
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