Davis Manufacturing expects to produce 18,000 total units during the current period. The costs and cost drivers associated with four activity cost pools are given below: ACTIVITIES UNIT LEVEL BATCH Cost $30,000 LEVEL $40,000 PRODUCT LEVEL $10,000 Cost Driver 2,400 labor 200 setups % of use FACILITY LEVEL $140,000 18,000 units hrs Production of 1,200 units of a solar panel required 480 labor hours, 14 setups, and consumed 40% of the product-sustaining activities. How much total overhead cost will be allocated to this product if the company allocates overhead on the basis of a single overhead allocation rate based on direct labor hours?

Davis Manufacturing expects to produce 18,000 total units during the current period. The costs and cost drivers associated with four activity cost pools are given below: ACTIVITIES UNIT LEVEL BATCH Cost $30,000 LEVEL $40,000 PRODUCT LEVEL $10,000 Cost Driver 2,400 labor 200 setups % of use FACILITY LEVEL $140,000 18,000 units hrs Production of 1,200 units of a solar panel required 480 labor hours, 14 setups, and consumed 40% of the product-sustaining activities. How much total overhead cost will be allocated to this product if the company allocates overhead on the basis of a single overhead allocation rate based on direct labor hours?

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

Section: Chapter Questions

Problem 27E: Plata Company has identified the following overhead activities, costs, and activity drivers for the...

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Plata Company has identified the following overhead activities, costs, and activity drivers for the coming year: Plata produces two models of microwave ovens with the following activity demands: The companys normal activity is 21,000 machine hours. Calculate the total overhead cost that would be assigned to Model X using an activity-based costing system: a. 230,000 b. 240,000 c. 280,000 d. 190,000
Crystal Pools estimates overhead will utilize 250,000 machine hours and cost $750,000. It takes 2 machine hours per unit, direct material cost of $14 per unit, and direct labor of $20 per unit. What is the cost of each unit produced?
Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4.000 units were produced: Variable manufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 6,000 units of part A for the next years production. Cory Corporation has offered to supply 6,000 units of part A at a price of $7.00 per unit. It Gent accepts the offer, all of the variable costs and $1,200 of the fixed costs will be avoided. Should Gent Designs accept the offer from Cory Corporation?
Hatch Manufacturing produces multiple machine parts. The theoretical cycle time for one of its products is 65 minutes per unit. The budgeted conversion costs for the manufacturing cell dedicated to the product are 12,960,000 per year. The total labor minutes available are 1,440,000. During the year, the cell was able to produce 0.6 units of the product per hour. Suppose also that production incentives exist to minimize unit product costs. Required: 1. Compute the theoretical conversion cost per unit. 2. Compute the applied conversion cost per minute (the amount of conversion cost actually assigned to the product). 3. Discuss how this approach to assigning conversion cost can improve delivery time performance. Explain how conversion cost acts as a performance driver for on-time deliveries.
Remarkable Enterprises requires four units of part A for every unit of Al that it produces. Currently, part A is made by Remarkable, with these per-unit costs in a month when 4,000 units were produced: Variable manufacturing overhead is applied at $1.60 per unit. The other $0.50 of overhead consists of allocated fixed costs. Remarkable will need 8,000 units of part A for the next years production. Altoona Corporation has offered to supply 8,000 units of part A at a price of $8.00 per unit. If Remarkable accepts the offer, all of the variable costs and $2,000 of the fixed costs will be avoided. Should Remarkable accept the offer from Altoona Corporation?
How much total overhead cost will be allocated?
Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year. Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $480,000 Number of setups 600 Ordering costs 360,000 Number of orders 18,000 Machine costs 840,000 Machine hours 42,000 Receiving 400,000 Receiving hours 10,000 Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B Direct materials $600,000 $800,000 Direct labor $480,000 $480,000 Units completed 16,000 8,000 Direct labor hours 6,000 2,000 Number of setups 400 200 Number of orders 6,000 12,000 Machine hours 24,000 18,000 Receiving hours 3,000 7,000 The company's normal activity is 8,000 direct labor hours. Required: Determine the unit cost for each model using direct labor hours to…
How much total overhead cost will be allocated?
What is the answer?
Silven Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $126,000 Number of setups 150 Ordering materials 18,000 Number of orders 900 Machining 1,260,000 Machine hours 10,500 Receiving 30,000 Receiving hours 1,250 Silven produces two models of cell phones with the following expected activity demands: Model X Model Y Units completed 5,000 10,000 Number of setups 100 50 Number of orders 300 600 Machine hours 6,000 4,500 Receiving hours 375 875 Required: Determine the total overhead assigned to each product using the four activity drivers. Determine the total overhead assigned to each model using the two most expensive activities. The costs of the two relatively inexpensive activities are allocated to the two expensive activities in proportion to their costs. Using ABC as the benchmark, calculate the percentage error and…
How much total overhead cost will be allocated to this product if the company allocates overhead
Silven Company has identified the following overhead activities, costs, and activity drivers for the coming year: Expected Cost Activity Driver Activity Activity Capacity Setting up equipment $147,000 Number of setups 120 Ordering materials Number of orders 26,400 1,200 Machining Machine hours 101,500 10,150 Receiving 23,100 Receiving hours 1,155 Silven produces two models of cell phones with the following expected activity demands: Model Model Y Units completed 5,400 10,800 Number 80 40 of setups Number of orders 400 800 Machine hours 5,800 4,350 770 Receiving hours 385 Required: 1. Determine the total overhead assigned to each product using the four activity drivers. 2. Determine the total overhead assigned to each model using the two most expensive activities. The costs of the two relatively inexpensive activities are allocated to the two expensive activities in proportion to their costs. Round interim calculations to two decimal places and round your final answers to the nearest…