Durban Metal Products, Limited, of the Republic of South Africa makes specialty metal parts used in applications ranging from the cutting edges of bulldozer blades to replacement parts for Land Rovers. The company uses an activity-based costing system for internal decision-making purposes. The company has four activity cost pools as listed below: Activity Cost Pool Order size Customer orders Product testing Selling Activity Measure Number of direct labor-hours Number of customer orders Number of testing hours Number of sales calls Activity Rate $ 18.00 per direct labor-hour $ 357.00 per customer order $ 82.00 per testing hour $ 1,483.00 per sales call The managing director of the company would like information concerning the cost of a recently completed order for heavy-duty trailer axles. The order required 200 direct labor-hours, 13 hours of product testing, and 5 sales calls. Required: What is the total overhead cost assigned to the order for heavy-duty trailer axles? Activity Cost Pool Order size Customer orders Product testing Selling Total overhead cost ABC Cost

Durban Metal Products, Limited, of the Republic of South Africa makes specialty metal parts used in applications ranging from the cutting edges of bulldozer blades to replacement parts for Land Rovers. The company uses an activity-based costing system for internal decision-making purposes. The company has four activity cost pools as listed below: Activity Cost Pool Order size Customer orders Product testing Selling Activity Measure Number of direct labor-hours Number of customer orders Number of testing hours Number of sales calls Activity Rate $ 18.00 per direct labor-hour $ 357.00 per customer order $ 82.00 per testing hour $ 1,483.00 per sales call The managing director of the company would like information concerning the cost of a recently completed order for heavy-duty trailer axles. The order required 200 direct labor-hours, 13 hours of product testing, and 5 sales calls. Required: What is the total overhead cost assigned to the order for heavy-duty trailer axles? Activity Cost Pool Order size Customer orders Product testing Selling Total overhead cost ABC Cost

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Machine processing Machine setups Production orders Shipments $115 per shipment Product sustaining $875 per product Activity data have been supplied for the following two products: Number of units produced per year Direct labor-hours Machine-hours Machine setups Production orders Shipments Product sustaining Activity Cost Pool Supporting direct labor Machine processing Machine setups Production orders Shipments Product sustaining Total overhead cost Activity Rates $6 per direct labor-hour $3 per machine-hour $45 per setup $ 160 per order K425 Total Expected Activity K425 M67 2,000 M67 200 1,150 3,200 Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system? 7 7 14 2 50 40 2 2 2 2
Classify each of the customer-level operating costs as a customer output unit–level, customer batchlevel, or customer-sustaining cost.
Thornton Corporation's computer services department assists two operating departments in using the company's information system effectively. The annual cost of computer services is $626,200. The production department employs 37 employees, and the sales department employs 25 employees. Thornton uses the number of employees as the cost driver for allocating the cost of computer services to operating departments. Required Allocate the cost of computer services to operating departments. Department Allocated Cost Production Sales
Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. Management designed an activity-based costing system with the following activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Order processing Custom design processing Customer service Activity Rate $ 20 per direct labor-hour $ 192 per order $ 265 per custom design $ 432 per customer Management wants to calculate the profitability of a particular customer, Big Sky Outfitters, which ordered the following products over the last 12 months: Number of gliders Number of orders Number of custom designs Direct labor-hours per glider Selling price per glider Direct materials cost per glider Standard Model 15 2 0 28.50 $ 1,850 $470 Custom Design 222 34.00 $ 2,480 $ 572 The company's direct labor rate is $18 per hour. Required: Using the company's activity-based costing system,…
Vijay Subject: accounting
Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. Management has designed on activity-based costing system with the following activity cost pools and activity rates: ActIvity Cost Pool Supporting direct lebor Order processing Custon desion processing Customer service Activity Rate $416 per direct labor-hour $ 182 per order $ 261 per custon design $426 per custoner Management would like an analysis of the profitability of a particular customer, Big Sky Outfitters, which has ordered the following products over the last 12 months Stenderd Model Custos Desion 2 2 Number of gilders Number of orders Number of custon des igns Direct iabor-hours per gtider Selling price per glider Direct naterlals cost per ollder 14 30.50 $1,875 $ 444 33.00 $2.450 $ 500 The company's direct labor rate is $22 per hour Required: Using the company's activity-based costing…
Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Machine processing Machine setups Production orders. Shipments Product sustaining Activity data have been supplied for the following two products: Total Expected Activity Activity Rates $ 7 per direct labor-hour $ 4 per machine-hour $50 per setup $ 170 per order $ 130 per shipment $ 800 per product Number of units produced per year Direct labor-hours Machine-hours Machine setups Production orders Shipments Product sustaining K425 200 1,075 2,200 11 11 22 2 M67 2,000 40 30 2 2 2 2 Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system?
Multiple Choice $9,907.97 $89,171.73 $5,173.02 $136.51
Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. Management designed an activity-based costing system with the following activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Order processing Custom design processing Customer service Activity Rate $ 18 per direct labor-hour $190 per order $ 258 per custom design $ 416 per customer Management wants to calculate the profitability of a particular customer, Big Sky Outfitters, which ordered the following products over the last 12 months: Number of gliders Number of orders Number of custom designs. Direct labor-hours per glider Selling price per glider Direct materials cost per glider The company's direct labor rate is $16 per hour. Standard Model 11 2 0 28.50 $ 1,900 $ 462 Custom Design 2 2 33.00 $2,500 $ 584 Required: Using the company's activity-based costing system,…
Gadubhai
Thermal Rising, Incorporated, makes paragliders for sale through specialty sporting goods stores. The company has a standard paraglider model, but also makes custom-designed paragliders. Management designed an activity-based costing system with the following activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Order processing Custom design processing Customer service Activity Rate $ 18 per direct labor-hour $ 200 per order $ 264 per custom design $ 432 per customer Management wants to calculate the profitability of a particular customer, Big Sky Outfitters, which ordered the following products over the last 12 months: Number of gliders Number of orders Number of custom designs Direct labor-hours per glider Selling price per glider Direct materials cost per glider Standard Model Custom Design 15 2 2 2 0 2 30.50 34.00 $ 1,850 $ 452 $ 2,480 $ 582 The company's direct labor rate is $20 per hour. Required: Using the company's activity-based costing system,…