Davis Company produces two hair dryers: regular and deluxe. The company has four activities: machining, engineering, receiving, and inspection. Information on these activities and their drivers is given below.RegularDeluxeTotalUnits produced80,000240,000Prime costs$7,200,000$28,800,000$36,000,000Machine hours80,000400,000480,000Engineering hours2001,8002,000Receiving orders3009001,200Inspection hours9001,8002,700Overhead costs:Machining$5,760,000Engineering800,000Receiving396,000Inspecting products459,000Required:1. Calculate the four activity rates.Machining rateS12per machine hourEngineering rateS400per hour

1) Under Activity Based Costing, various activities occurring are identified and activity rate is…

Answered: Davis Company produces two hair dryers:…

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

Ramapo Company produces two products, Blinks and Dinks. They are manufactured in two departments, Fabrication and Assembly. Data for the products and departments are listed below. Product Number ofUnits Direct Labor HoursPer Unit Machine HoursPer Unit Blinks 984 2 7 Dinks 2,096 8 7 All of the machine hours take place in the Fabrication department, which has an estimated overhead of $107,300. All of the labor hours take place in the Assembly department, which has an estimated total overhead of $85,100. Ramapo Company uses a single plantwide overhead rate to apply all factory overhead costs based on direct labor hours. The factory overhead allocated per unit of Blinks is
Martay Creations produces winter scarves. The scarves are produced in the Cutting and Sewing departments. The Maintenance and Security departments support these production departments, and allocate costs based on machine hours and square feet, respectively. Information about each department is provided in the following table: Department Total Cost Number of Employees Machine Hours Square Feet Maintenance Department $2,200 5 40 600 Security Department 4,500 3 0 500 Cutting Department 21,200 21 3,600 2,400 Sewing Department 24,900 19 5,400 3,000 Using the sequential method and allocating the support department with the highest costs first, allocate all support department costs to the production departments. Then compute the total cost of each production department. Line Item Description CuttingDepartment SewingDepartment…
Vaughn Company manufactures two products, Mini A and Maxi B. Vaughn's overhead costs consist of setting up machines- $890,000; machining- $2,030,000; and inspecting- $640,000. Information on the two products is: Mini A Мaxi В Direct labour hours 14,000 26,000 Machine setups 700 500 Machine hours 21,000 23,000 Inspections 700 600 Overhead applied to Maxi B using traditional costing and direct labour hours is
Aleutian Company produces two products: Rings and Dings. They are manufactured in two departments: Fabrication and Assembly. Data for the products and departments are listed below. Product Number ofUnits Direct Labor Hoursper Unit Machine Hoursper Unit Rings 1,080 7 7 Dings 2,050 5 9 All of the machine hours take place in the Fabrication Department, which has estimated total factory overhead of $84,700. All of the labor hours take place in the Assembly Department, which has estimated total factory overhead of $72,600. Aleutian Company uses the multiple production department factory overhead rate method. The Fabrication Department uses machine hours as an allocation base, and the Assembly Department uses direct labor hours. The Assembly Department's factory overhead rate is
Craftmore Machining produces machine tools for the construction industry. The following details about overhead costs were taken from its company records. Production Activity Indirect Labor Indirect Materials Other Overhead Grinding $ 310,000 Polishing $ 145,000 Product modification 550,000 Providing power $ 260,000 System calibration 560,000 Additional information on the drivers for its production activities follows. Grinding 17,000 machine hours Polishing 17,000 machine hours Product modification 1,500 engineering hours Providing power 15,000 direct labor hours System calibration 200 batches Problem C-1A Part 3 Job 3175 Job 4286 Number of units 150 units 1,875 units Machine hours 350 MH 3,500 MH Engineering hours 30 eng. hours 30 eng. hours Batches 10 batches 30 batches Direct labor hours 520 DLH 4,680 DLH
Ramapo Company produces two products, Blinks and Dinks. They are manufactured in two departments, Fabrication and Assembly. Data for the products and departments are listed below. Number of Direct Labor Hours Per Unit Product Units Blinks Dinks 1,101 2,269 3 4 Machine Hours Per Unit 8 5 All of the machine hours take place in the Fabrication department, which has an estimated overhead of $80,200. All of the labor hours take place in the Assembly department, which has an estimated total overhead of $102,700. Ramapo Company uses a single plantwide overhead rate to apply all factory overhead costs based on direct labor hours. The factory overhead allocated per unit of Blinks is Oa. $308.12 Ob. $23.17 Oc. $44.34 Od. $59.10
Aleutian Company produces two products: Rings and Dings. They are manufactured in two departments: Fabrication and Assembly. Data for the products and departments are listed below. Product Number of Units Rings 910 3 Dings 2,270 9 All of the machine hours take place in the Fabrication Department, which has estimated total factory overhead of $85,800. All of the labor hours take place in the Assembly Department, which has estimated total factory overhead of $70,800. Direct Labor Hours per Unit 6 5 Oc. $3.70 per direct labor hour Od. $4.21 per direct labor hour Machine Hours per Unit Aleutian Company uses the multiple production department factory overhead rate method. The Fabrication Department uses machine hours as an allocation base, and the Assembly Department uses direct labor hours. The Assembly Department's factory overhead rate is Oa. $4.48 per machine hour Ob. $4.10 per machine hour
Ramapo Company produces two products, Blinks and Dinks. They are manufactured in two departments, Fabrication and Assembly. Data for the products and departments are listed below. Product Blinks Dinks Number of Direct Labor Hours Machine Hours Units Per Unit Per Unit is 920 Oa. $52.18 Ob. $89.11 Oc. $14.85 Od. $77.51 1,843 1 6 7 All of the machine hours take place in the Fabrication department, which has an estimated overhead of $100,400. All of the labor hours take place in the Assembly department, which has an estimated total overhead of $77,500. Ramapo Company uses a single plantwide overhead rate to apply all factory overhead costs based on direct labor hours. The factory overhead allocated per unit of Blinks 9
The Widget Company produces two types of widgets, Standard and Deluxe. Data related to the two products is presented below. Standard Deluxe Annual production in units 25,000 50,000 Direct material costs $75,000 $150,000 Direct manufacturing labor costs $25,000 $50,000 Direct manufacturing labor-hours 1,250 2,500 Machine hours 12,500 25,000 Number of production runs 25 25 Inspection hours 500 250 Both products pass through Departments A and Department B. The departments’ combined manufacturing overhead costs are: Total Machine Costs $187,500 Setup Costs 60,000 Inspection Costs 52,500 Required: Using Activity Based Costing, Compute the…
Rundle Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity co pools follow: Cost Cost driver Req A and B Unit Level $ 25,200 Req C a. Allocated cost b. Allocated cost Production of 880 sets of cutting shears, one of the company's 20 products, took 130 labor hours and 10 setups and consumed 15 percent of the product-sustaining activities. Required 8. Had the company used labor hours as a companywide allocation base, how much overhead would it have allocated to the cutting shears? Complete this question by entering your answers in the tabs below. 1,200 labor hours b. How much overhead is allocated to the cutting shears using activity-based costing? c. Compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 880…
Aleutian Company produces two products: Rings and Dings. They are manufactured in two departments: Fabrication and Assembly. Data for the products and departments are listed below. Product Number ofUnits Direct Labor HoursPer Unit Machine HoursPer Unit Rings 1,000 5 7 Dings 2,740 7 10 All of the machine hours take place in the Fabrication Department, which has estimated total factory overhead of $89,300. All of the labor hours take place in the Assembly Department, which has estimated total factory overhead of $65,100. Aleutian Company uses the multiple production department factory overhead rate method. The Fabrication Department uses machine hours as an allocation base, and the Assembly Department uses direct labor hours. The total factory overhead allocated per unit of Rings is a.$31.65 b.$3.44 c.$44.83 d.$41.28
Saved Jefferson, Inc. produces two different products (Product 5 and Product Z) using two different activities: Machining, which uses machine hours as an activity driver, and Inspection, which uses number of batches as an activity driver. The cost of Machining is $324,000, while the cost of Inspection is $37000. The activity drivers are used as follows: Product 5 Product I Total 5,400 70 Machine hours 3,240 2,160 Number of batches 28 42 What proportion of Inspection activity is used by Product Z? Multiple Cholce 68% 32% 60%

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS