None Chesapeake Co. manufactures fine dining tables.During the most productive month of the year,3,500 tables were manufactured at a total cost of$84,400. In its slowest month, the company made1,100 tables at a cost of $46,000. Using the high-low method of cost estimation, What is the totalfixed costs in August for Chesapeake?

Step 1: Introduction to the Total CostTotal cost is the aggregate of all expenses a company incurs…

Answered: Chesapeake Co. manufactures fine dining…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 1PB: Bobcat uses a traditional cost system and estimates next years overhead will be $800.000, as driven...

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SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that its total annual overhead costs can be represented by the following formula: Overhead cost = 543,000 + 1.34X, where X equals number of smokers. Last year, SmokeCity produced 20,000 smokers. Actual overhead costs for the year were as expected. Required: 1. What is the driver for the overhead activity? 2. What is the total overhead cost incurred by SmokeCity last year? 3. What is the total fixed overhead cost incurred by SmokeCity last year? 4. What is the total variable overhead cost incurred by SmokeCity last year? 5. What is the overhead cost per unit produced? 6. What is the fixed overhead cost per unit? 7. What is the variable overhead cost per unit? 8. Recalculate Requirements 5, 6, and 7 for the following levels of production: (a) 19,500 units and (b) 21,600 units. (Round your answers to the nearest cent.) Explain this outcome.
Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Required: 1. Calculate the total cost of direct materials used in production. 2. Calculate the cost of goods manufactured. Calculate the unit manufacturing cost. 3. Of the unit manufacturing cost calculated in Requirement 2, 2.70 is direct materials and 5.30 is overhead. What is the prime cost per unit? Conversion cost per unit?
During the week of August 21, Parley Manufacturing produced and shipped 4,000 units of its machine tools: 1,500 units of Tool SK1 and 2,500 units of Tool SK3. The cycle time for SK1 is 0.73 hour, and the cycle time for SK3 is 0.56 hour. The following costs were incurred: Required: 1. Assume that the value-stream costs and total units shipped apply only to one model (a single-product value stream). Calculate the unit cost, and comment on its accuracy. 2. Assume that Tool SK1 is responsible for 60% of the materials cost. Calculate the unit cost for Tool SK 1 and Tool SK3, and comment on its accuracy. Explain the rationale for using units shipped instead of units produced in the calculation. 3. Calculate the unit cost for the two models, using DBC. Explain when and why this cost is more accurate than the unit cost calculated in Requirement 2.
During the week of May 10, Hyrum Manufacturing produced and shipped 16,000 units of its aluminum wheels: 4,000 units of Model A and 12,000 units of Model B. The cycle time for Model A is 1.09 hours and for Model B is 0.47 hour. The following costs and production hours were incurred: Required: 1. Assume that the value-stream costs and total units shipped apply only to one model (a single-product value stream). Calculate the unit cost, and comment on its accuracy. 2. Assume that Model A is responsible for 40% of the materials cost. Calculate the unit cost for Models A and B, and comment on its accuracy. Explain the rationale for using units shipped instead of units produced in the calculation. 3. Calculate the unit cost for the two models, using DBC. Explain when and why this cost is more accurate than the unit cost calculated in Requirement 2.
On April 30, the end of the first month of operations, Joplin Company prepared the following income statement, based on the absorption costing concept: If the fixed manufacturing costs were 450,000 and the fixed selling and administrative expenses were 165,000, prepare an income statement according to the variable costing concept.
Wyandotte Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 256,900, direct labor cost was 176,000, and overhead cost was 308,400. There were 40,000 units produced. Required: 1. Calculate the total cost of direct materials used in production. 2. Calculate the cost of goods manufactured. Calculate the unit manufacturing cost. 3. Of the unit manufacturing cost calculated in Requirement 2, 6.62 is direct materials and 7.71 is overhead. What is the prime cost per unit? Conversion cost per unit?
Total and Unit Product Cost Martinez Manufacturing Inc. showed the following costs for last month: Last month, 4,000 units were produced and sold. Required: 1. Classify each of the costs as product cost or period cost. 2. What is the total product cost for last month? 3. What is the unit product cost for last month?
Chesapeake Co. manufactures fine dining tables. During the most productive month of the year, 3,500 tables were manufactured at a total cost of $84,400. In its slowest month, the company made 1,100 tables at a cost of $46,000. Using the high- low method of cost estimation, What is the total fixed costs in August for Chesapeake?
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The Macon Company uses the high-low method to determine its cost equation. The following information was gathered for the past year: Machine Hours Direct Labor Costs Busiest month (June) 17,500 $ 229,022 Slowest month (December) 10,200 $ 155,000 If Macon expects to use 13,500 machine hours next month, what are the estimated direct labor costs?
Irving Manufacturing produces custom cabinets. During its most productive month of the year, 4,120 cabinets were manufactured at a total cost of $95,600. In its slowest month, the company produced 1,580 cabinets at a cost of $42,300. Using the high-low method, determine the total fixed costs.
Strait Co. manufactures office furniture. During the most productive month of the year, 3,100 desks were manufactured at a total cost of $82,600. In the month of lowest production, the company made 1,160 desks at a cost of $58,100. Using the high-low method of cost estimation, total fixed costs are

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