None Consider the data in the table below, which applies to the provision of languageproficiency testing services. Calculate the full absorption cost per unit (one unit = onetest) if the number of tests is 500 per month.Sales per unit: $280Fixed costs (per month):Selling and administration: $18,000Production overhead: $20,000Variable costs (per test):Labor for oversight and feedback: $110Outsourced test analysis: $30Materials used in testing: $9Production overhead: $18Selling and administration: $14

Step 1: Definition of Full Absorption Cost per UnitThe full absorption cost per unit refers to the…

Answered: Consider the data in the table below,…

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

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Problem 28E: Assume that the inspection activity has an expected cost of 120,000. Expected direct labor hours are...

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The following data apply to the provision of psychological testing services: Sales price per unit (1 unit = 1 test plus feedback to client) Fixed costs (per month): Selling and administration Production overhead (e.g., rent of testing facilities) Variable costs (per test): Labor for oversight and feedback Selling and administration (e.g., scheduling and billing) Number of tests per month Outsourced test analysis Materials used in testing. Production overhead a. Variable production cost per unit. b. Variable cost per unit. c. Full cost per unit. d. Full absorption cost per unit. Prime cost per unit. Conversion cost per unit. Contribution margin per unit. Gross margin per unit. e. 1. 9 h. 320 16,000 15,000 Required: Calculate the amount for each of the following (one unit one test) if the number of tests is 2,000 per month. Also calculate if the number of tests decreases to 1,250 per month. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar.)…
Spartans Inc. has three operating departments that receive support from Quality Control (Support). Below is the number of inspections department plans to use (Expected Usage) and its actual usage for the month. Dept A Dept B Dept C Expected Usage 90 180 150 Actual Usage 125 150 145 Quality Control can provide up to 450 inspections each month. Estimated its support costs are as follows: Fixed Costs $48,000 Variable Costs $22 per inspection Spartans Inc. estimates costs based on Practical Capacity. For the single-rate method costs are allocated based on actual usage. For the dual-rate method variable costs are allocated based on actual usage and fixed costs are allocated based on expected usage. If Spartans Inc. uses a Dual Rate based on Practical Capacity, how much support costs will be unallocated? 3,858.6
The following standards have been set for each test performed: Standard Hours Standard Price or Quantity 3 pounds 0.4 hours or Rate S0.75 per pound S12 per hour Direct materials. Direct labor. During March, Your Company performed 2,000 tests. • 840 actual direct labor-hours were worked at a cost of $8,610. What are the standard hours (SQ) for the period? ENTER YOUR ANSWER WITHOUT DOLLAR SIGNS OR OTHER DESCRIPTIONS
The manager of Trusty Car Inspection reviewed the monthly operating costs for the past year. The costs ranged from $4,300 for 1,300 inspections to $3,900 for 900 inspections. Requirements 1. Use the high-low method to calculate the variable cost per inspection. 2. Calculate the total fixed costs. 3. Write the equation and calculate the operating costs for 1,000 inspections. 4. Draw a graph illustrating the total cost under this plan. Label the axes, and show the costs at 900, 1,000, and 1,300 inspections.
Corazon Manufacturing Company has a purchasing department staffed by five purchasing agents. Each agent is paid 28,000 per year and is able to process 4,000 purchase orders. Last year, 17,800 purchase orders were processed by the five agents. Required: 1. Calculate the activity rate per purchase order. 2. Calculate, in terms of purchase orders, the: a. total activity availability b. unused capacity 3. Calculate the dollar cost of: a. total activity availability b. unused capacity 4. Express total activity availability in terms of activity capacity used and unused capacity. 5. What if one of the purchasing agents agreed to work half time for 14,000? How many purchase orders could be processed by four and a half purchasing agents? What would unused capacity be in purchase orders?
Evans Company had total sales of 3,000,000 for fiscal 20x5. The costs of quality-related activities are given below. Required: 1. Prepare a quality cost report, classifying costs by category and expressing each category as a percentage of sales. What message does the cost report provide? 2. Prepare a bar graph and pie chart that illustrate each categorys contribution to total quality costs. Comment on the significance of the distribution. 3. What if, five years from now, quality costs are 7.5 percent of sales, with control costs being 65 percent of the total quality costs? What would your conclusion be?
Nabors Company had actual quality costs for the year ended June 30, 20x5, as given below. At the zero-defect state, Nabors expects to spend 375,000 on quality engineering, 75,000 on vendor certification, and 50,000 on packaging inspection. Assume sales to be 25,000,000. Required: 1. Prepare a long-range performance report for 20x5. What does this report tell the management of Nabors? 2. Explain why quality costs still are present for the zero-defect state. 3. What if Nabors achieves the zero-defect state reflected in the report? What are some of the implications of this achievement?
For a simple regression analysis model that is used to allocate factory overhead, an internal auditor finds that the intersection of the line of best fit for the overhead allocation with the y-axis is $14,000. The slope of the line is 0.2. The independent variable, factory wages, amounts to $810,000 for the month. What is the estimated amount of factory overhead to be allocated for the month? Multiple Choice $289,400. $162.000. $68,000. $88,000.
Walton Company has measured its quality costs for the past two years. After the company gathers its quality cost data, it summarizes those costs using the four categories shown below: Last Year This Year Prevention costs $ 392,700 $ 708,500 Appraisal costs $ 413,900 $ 550,500 Internal failure costs $ 821,600 $ 465,000 External failure costs $ 1,122,000 $ 632,400 Required: 1. Calculate the total cost of quality last year and this year. 2. For last year, calculate the cost in each of the four categories as a percent of the total cost of quality. 3. For this year, calculate the cost in each of the four categories as a percent of the total cost of quality. 4-a. Calculate the change in total cost of quality over the two-year period. 4-b. Is performance trending in a favorable or unfavorable direction? 1.Calculate the total cost of quality last year and this year?= total cost of quality 2.For last year, calculate the cost in each of the four categories as a percent of the total…
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Harmon Recycling Services (HRS), a not-for-profit organization, has two drop-off centers, Westside and Eastside. Data for the expected operation in the next quarter follow. Clients Revenues Eastside 25,000 $360,000 8,100 Westside 6,250 $ 240,000 2,700 $ 99,000 $ 108,000 Staff hours Staff costs General operating costs Required: a. Compute the predetermined overhead rate used to apply general operating costs to the two centers assuming HRS uses the number of clients to allocate general operating costs. b. Based on the rates computed in requirement (a), what is the expected surplus (revenues less costs) for each center? Required A Required B Complete this question by entering your answers in the tabs below. Predetermined overhead rate Total 31,250 $ 600,000 10,800 $ 207,000 $360,000 Compute the predetermined overhead rate used to apply general operating costs to the two centers assuming HRS uses the number of clients to allocate general operating costs. Note: Round your answer to 2…

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