Dartmouth Corporation manufactures two models of office chairs, a standard and a deluxe model. The following activity and cost information has been compiled: Number of Number of Number of Product Setups Components Direct Labor Hours Standard 18 275 Deluxe 32 14 215 Overhead costs $75,000 $87,400 Required: Number of setups and number of components are identified as activity-cost drivers for overhead. Assuming an activity-based costing system is used, what is the total amount of overhead costs assigned to the standard model?

Dartmouth Corporation manufactures two models of office chairs, a standard and a deluxe model. The following activity and cost information has been compiled: Number of Number of Number of Product Setups Components Direct Labor Hours Standard 18 275 Deluxe 32 14 215 Overhead costs $75,000 $87,400 Required: Number of setups and number of components are identified as activity-cost drivers for overhead. Assuming an activity-based costing system is used, what is the total amount of overhead costs assigned to the standard model?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

please answer within the format by providing formula the detailed workingPlease provide answer in text (Without image)Please provide answer in text (Without image)Please provide answer in text (Without image) Churchill Products is considering updating its cost system to an activity-based costing system and is interested in understanding the effects. The company’s cost accountant has identified three overhead cost pools along with appropriate cost drivers for each pool. Cost Pools Costs Activity Drivers Utilities $ 315,000 63,000 machine-hours Scheduling and setup 300,000 600 setups Material handling 795,000 1,590,000 pounds of material The company manufactures three models of water basins (Oval, Round, and Square). The plans for production for the next year and the budgeted direct costs and activity by product line are as follows. Products Oval Round Square Total direct costs (material and labor) $ 80,000 $ 70,000 $ 80,000 Total…
Fran Ferry Company had the following activities, pooled costs, and physical flow of driver units. The company uses activity-based costing. Activities Account Inquiry (hours) Account Billing (Lines) Account Verification (accounts) Correspondence(letters) Pooled Cost $200,000 $140,000 $5000 $25,000 The above activities are used by departments A and B as follows: Department A 1,000 200,000 5,000 500 Account Inquiry (hours) Account Billing (Lines) Account Verification (accounts) Correspondence (letters) Physical Flow of Driver Units 5000 (hours) 2,000,000 lines 20,000 accounts 2,000 letters Department B 2,000 100,000 Required: 1. How much of the Account Inquiry cost, Account Billing Cost, Account Verification Cost and Correspondence Cost will be assignmed to Department A & Department B ? 4,000 800
Carlise has identified the following information about its overhead activity pools and the two product lines: Cost Assigned to Pool $ 20,910 $ 85,120 $ 34,790 Activity Pools Materials handling Quality control Machine maintenance Cost Driver Number of moves Number of inspections Number of machine hours Quantity or Amount Consumed by Quantity or Amount Consumed by Indoor Line Outdoor Line Complete this question by entering your answers in the tabs below. Indoor Model Outdoor Model Total Required: 1. Suppose Carlise used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. 2. Calculate the activity proportions for each activity pool in Carlise's ABC system. 3. Calculate the amount of overhead that Carlise will assign to the Indoor line if it uses an ABC system. 4. Determine the amount of overhead Carlise will assign to the Outdoor line if it uses an ABC system. 5. Compare the results for a traditional system…
A Corporation manufactures two products: Product K and Product L. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products K and L. Activity Cost Pool Activity Measure Machining Machine setups Total Cost Total Activity S 247,00013,000MHS 150setups 2products Direct labor-hours $ 260,00010,000DLHS Machine-hours Number of setups S 60,000 Number of products S 56,000 Product design Order size Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Product K Product L 10,000 110 3,000 40 6,000 4,000 Required: 1. Compute the plantwide (POHR) overhead rate. 2. Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product K? How much is allocated to Product L? 3. Using the ABC system,…
Schwynn Inc. manufactures street bicycle tires and mountain bicycle tires. The company uses activity-based costing. Schwynn has identified three overhead activity cost pools and their related cost drivers: (1) Machine set ups, driven by the number of setups; (2) Assembling, driven by direct labor hours; and (3) Inspection, driven by the number of inspections. Data relating to the company's three activity cost pools are given below for the current year: Estimated Estimated Cost Drivers Activity Cost Overhead Street Mountain Pools Costs Tires Tires Machine set ups $ 90,000 150 350 Assembling $500,000 25,000 15,000 Inspection $400,000 180 320 Questions Using the traditional approach, determine the applied overhead rate for Schwynn Inc based on direct labor hours. 2.Using the activity-based costing approach, determine the applied overhead rates for Darter Company.
WoolCorp is currently using the single plantwide factory overhead rate method, which uses a predetermined overhead rate based on an estimated allocation base such as direct labor hours or machine hours. The rate is computed as follows: Single Plantwide Factory Overhead Rate = (Total Budgeted Factory Overhead) ÷ (Total Budgeted Plantwide Allocation Base) WoolCorp has been using combing machine hours as its allocation base. The company would like to consider activity-based costing. In order to understand their current system better, you evaluate WoolCorp’s current method of costing for raw wool and wool yarn. The production staff has compiled the following information for you on the production of 550 pounds of either raw wool or wool yarn: FactoryOverhead Type BudgetedFactoryOverhead Sorting $25,600 Cleaning 38,400 Combing 1,200 Raw Wool Wool Yarn Hours of combing machine use required 80 20 In the following table, use combing machine hours as the allocation…
Custom's has three cost pools and an associated cost driver to allocate the costs to the product. The cost pools, cost driver, estimated overhead, and estimated activity for the cost pool are: Cost Pool Material Machining Inspection • Material cost pool . Material requisitions Machine hours Number of inspections • Machining cost pool Custom's data Cost Driver Inspection cost pool Estimated Activity per Driver 14,000 186,400 10,000 Estimated Overhead What is the predetermined overhead rate for each activity? Round to the nearest penny, two decimal places. $52,500 363,500 75,000
Ramsey SARL uses an activity based costing system to assign overhead costs to products. In the first stage, two overhead costs - Security expense and Building depreciation - are allocated to three activity cost pools - Shipping, Carving, and Other - based on resource consumption. Data to perform these allocations appear below: Overhead Costs: Security expense: $105,000 Building depreciation: $70,000 Distribution of Resource Consumption across Activity Cost Pools: Overhead Cost Activity Cost Pools Shipping Carving Other Security expense 0.30 0.42 0.28 Building depreciation 0.34 0.32 0.34 The second stage of allocation is done by assigning the Shipping costs to products on the basis of orders shipped while products are assigned Carving costs based on machine hours. Costs assigned to the Other activity pool are not further assigned to products. Activity information for Ramsey's only two products is below: orders shipped machine hours Product BA-15: 6,300 1,500…
Delauder Enterprises makes a variety of products that it sells to other businesses. The company's activity-based costing system has four activity cost pools for assigning costs to products and customers. Details concerning that activity-based costing system are listed below: Activity Cost Pool Supporting assembly Processing batches. Processing orders. Serving customers Number of units purchased Number of batches. Activity Measure. Direct labor-hours (DLHS) Number of batches. Number of orders. Number of customers The cost of serving customers, $1,608.00 per customer, is the cost of serving a customer for one year. Grennon Corporation buys only one of the company's products. The details of last year's purchases of this product are listed below: Number of orders Direct labor-hour requirement. Selling price Direct materials cost Direct labor cost 1,500 units 5 batches 2 orders Activity Rate $ 3.45 per DLH $ 193.30 per batch $83.05 per order. $ 1,608.00 per customer 0.25 DLHS per unit $…
Forner, Inc., manufactures and sells two products: Product Z1 and Product Z8. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity Estimated Expected Activity Activity Overhead Activity Cost Pools Labor-related Measures Cost Product Z1 Product Z8 Total DLHS $112,190 40,440 609,770 600 2,000 Machine setups Оrder size 2,600 1,200 6, 200 setups 500 700 MHs 3,000 3,200 $762,400 The activity rate for the Machine Setups activity cost pool under activity-based costing is closest to: Multiple Cholce $203.26 per setup $190.55 per setup $122.97 per setup 92 F AQI 61 nere to search DELL
Central Perk, LLC, a manufacturer of coffee beans, is considering switching its operations to an Activity Based Costing system. The following manufacturing overhead activities and cost drivers have been identified: Activity. Machine setup Machine assembly Product inspection Product movement General factory Cost Driver Number of machine setups Machine hours logged Inspection hours logged Number of moves Machine hours logged Based on the above descriptions, which of the following correctly pairs the activity with its appropriate cost level? O A. Product Inspection... batch level cost OB. Product Movement... facility level cost O C. Machine Assembly... unit level cost O D. General Factory... batch level cost O E. Machine Setup... unit level cost
devrat