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 Activity Measure Direct labor-hours (DLHS) Number of batches. Number of orders. Number of customers GAMIS 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 units purchased. Number of batches 1,500 units Activity Rate $ 3.45 per DLH $ 193.30 per batch $83.05 per order $ 1,608.00 per customer 5 batches. 2 orders Number of orders Direct labor-hour requirement Selling price $ 18.55 per unit. Direct materials cost $ 8.35 per unit $3.95 per unit Direct labor cost According to the activity-based costing system, the total cost of the activity "Supporting assembly for this customer this past year was closest to 0.25 DLHS per unit

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 Activity Measure Direct labor-hours (DLHS) Number of batches. Number of orders. Number of customers GAMIS 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 units purchased. Number of batches 1,500 units Activity Rate $ 3.45 per DLH $ 193.30 per batch $83.05 per order $ 1,608.00 per customer 5 batches. 2 orders Number of orders Direct labor-hour requirement Selling price $ 18.55 per unit. Direct materials cost $ 8.35 per unit $3.95 per unit Direct labor cost According to the activity-based costing system, the total cost of the activity "Supporting assembly for this customer this past year was closest to 0.25 DLHS per unit

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 10MC: What is the proper order of tasks In an ABC system? identify the cost drivers, assign the costs to...

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The second stage of customer-based activity-based costing entails the assignment of: a. resource costs to sales departments. b. resources costs to distribution channels. c. customer-related activity costs to products. d. customer-related activity costs to customers.
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Rocks Industries has identified three different activities as cost drivers: machine setups, machine hours, and inspections. The overhead and estimated usage are: Compute the overhead rate for each activity.
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Comfort Foods Inc. uses activity-based costing to determine product costs. For each activity listed in the left column, match an appropriate activity base from the right column. You may use items in the activity-base list more than once or not at all.
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Electan Company produces two types of printers. The company uses ABC, and all activity drivers are duration drivers. Electan Company is considering using DBC and has gathered the following data to help with its decision. A. Activities with duration drivers: B. Activities with consumption ratios and costs: C. Products with cycle time and practical capacity: Required: 1. Using cycle time and practical capacity for each product, calculate the total time for all primary activities. Comment on the relationship to ABC. 2. Calculate the overhead rate that DBC uses to assign costs. Comment on the relationship to a unit-based plantwide overhead rate. 3. Use the overhead rate calculated in Requirement 2 to calculate (a) the overhead cost per unit for each product, and (b) the total overhead assigned to each product. How does this compare to the ABC assignments shown in Part B of the Information set? 4. What if the units actually produced were 10,000 for Printer A and 18,000 for Printer B. Using DBC, calculate the cost of unused capacity.
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Freeman Furnishings has summarized its data as shown. Direct labor hours will be used as the activity base to allocate overhead: Compute the cost of goods manufactured.