✓ Coronado inc. has two types of handbags standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed machining (machine hours) and machine setup (number of setups). The total estimated machine hours is 3,000, and the total estimated number of setups is 510. Presented below is information related to the company's operations Direct labor costs Machine hours Number of setups Machining Your answer is correct Total estimated overhead costs are $312.000 Overhead cost allocated to the machining activity cost pool is $210,000 and $102.000 is allocated to the machine setup activity cost pool Machine setup Standard Custom * Your is incorrect eTextbook and Media Traditional costing Standard Custom Standard Compute the overhead rate using the traditional plantwide) approach information related to each products use of cost drivers Round answer to 0 decimal places 12) Compute the overhead rates using the activity-based costing approach $ $50.000 S Activity-based costing eTextbook and Media 1,500 90 S Custom Determine the difference in allocation between the two approaches S $100.000 S $ 1.500 420 70 200 per machine hour per setup hour *
✓ Coronado inc. has two types of handbags standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed machining (machine hours) and machine setup (number of setups). The total estimated machine hours is 3,000, and the total estimated number of setups is 510. Presented below is information related to the company's operations Direct labor costs Machine hours Number of setups Machining Your answer is correct Total estimated overhead costs are $312.000 Overhead cost allocated to the machining activity cost pool is $210,000 and $102.000 is allocated to the machine setup activity cost pool Machine setup Standard Custom * Your is incorrect eTextbook and Media Traditional costing Standard Custom Standard Compute the overhead rate using the traditional plantwide) approach information related to each products use of cost drivers Round answer to 0 decimal places 12) Compute the overhead rates using the activity-based costing approach $ $50.000 S Activity-based costing eTextbook and Media 1,500 90 S Custom Determine the difference in allocation between the two approaches S $100.000 S $ 1.500 420 70 200 per machine hour per setup hour *
Chapter1: Financial Statements And Business Decisions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:please answer thr following below
Coronado inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on
direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were
used. Two activity cost pools were developed machining machine hours) and machine setup (number of setups). The total estimated
machine hours is 3,000, and the total estimated number of setups is 510. Presented below is information related to the company's
operations,
Direct labor costs
Machine hours
Number of setups
Machining
✓ Your answer is correct.
Total estimated overhead costs are $312.000. Overhead cost allocated to the machining activity cost pool is $210,000, and $102.000
is allocated to the machine setup activity cost pool
Machine setup S
Standard
Custom
X Your is incorrect
Standard
$50,000
Compute the overhead rate using the traditional plantwidel approach information related to each products use of cost drivers
(Round answer to 0 decimal places, eg 12)
eTextbook and Media
Traditional costing
Compute the overhead rates using the activity-based costing approach
S
Standard
Custom
Activity-based costing
1,500
90
S
eTextbook and Media -
Custom
$100,000
Determine the difference in allocation between the two approaches
$
$
1.500
420
70
200
per machine hour
per setup hour
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