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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Multiple Choice $9,907.97 $89,171.73 $5,173.02 $136.51
Vanvalkenburg. Inc., manufactures and sells two products: Product GQ5 and Product JO. 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 Measures Cost Product Q5 Product JØ Total Labor-related DLHS $191,748 70,536 295,592 Production orders 3,000 2,800 5,800 orders 300 500 800 Order size MHs 4,300 4,500 8,800 $557,876 The activity rate for the Order Size activity cost pool under activity-based costing is closest to: Multiple Cholce $36.23 per MH $68.48 per MH $96.19 per MH
Large, Inc., manufactures and sells two products: Product G8 and Product 00. Historically, the firm has used a traditional costing system, with direct laborurs as an activity base, to allocated manufaturing overhead to products. Data concerning the expected production of each product and the expected total direct labor-hours (DLHS) required to produce that output appear below: Product GS Product 00 Total direct labor-hours Product G8 Product 00 Activity Cost Pools Labor-related Expected Production 780 380 The direct labor rate is $22.90 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit $121.10 $121.50 Machine setups Order size Activity Measures DLHS setups MHS Direct Labor-Hours Per Unit The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: 5.8 2.8 Estimated Overhead Cost $ 59,555 58,390 369,508 $487,453 Total Direct Labor- Hours…
Dierich Company uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity-based costing system: Costs: Manufacturing overhead $600,000 Selling and administrative expenses 220,000 Total $820,000 Distribution of Resource Consumption: Activity Cost Pools Order Size Customer Support Other Total Manufacturing overhead 15% 75% 10% 100% Selling and administrative expenses 60% 20% 20% 100% The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. You have been asked to complete the first-stage allocation of costs to the activity cost pools. How much cost, in total, would be allocated in the first-stage allocation to the Order Size activity cost pool? Multiple Choice $123,000 $222,000 $307,500 $492,000
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,…
Foam Products, Incorporated, makes foam seat cushions for the automotive and aerospace industries. The company's activity-based costing system has four activity cost pools, which are listed below, along with their activity measures and activity rates: Activity Cost Pool Supporting direct labor. Batch processing Order processing Customer service Activity Measure Number of direct labor-hours Number of batches Number of orders Number of customers Activity Rate $10 per direct labor-hour $90 per batch $286 per order $ 2,602 per customer The company just completed a single order from Interstate Trucking for 2,800 custom seat cushions. The order was produced in four batches. Each seat cushion required 0.3 direct labor-hours. The selling price was $141.10 per unit, the direct materials cost was $102 per unit, and the direct labor cost was $14.20 per unit. This was Interstate Trucking's only order during the year. Required: Calculate the customer margin on sales to Interstate Trucking for the…
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,…
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 Activity Rate Supporting direct labor $ 22 per direct labor-hour Order processing $ 198 per order Custom design processing $ 252 per custom design Customer service $ 428 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: Standard Model Custom Design Number of gliders 11 2 Number of orders 22 Number of custom designs 02 Direct labor-hours per glider 27.50 32.00 Selling price per glider $1,825 $2,490 Direct materials cost per glider $ 452 $ 570 The company's direct labor rate is $16 per hour. what is the customer margin?
Doles Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products. Activity Cost Pools Setting up batches Processing customer orders Assembling products Data concerning two products appear below: Number of batches Number of customer orders Number of assembly hours Total overhead cost Activity Rate $69.22 per batch $26.28 per customer order $ 12.11 per assembly hour Product K52W 65 45 418 Required: How much overhead cost would be assigned to each of the two products using the company's activity-based costing system? (Round your intermediate calculations and final answers to 2 decimal places.) Product K52W Product X94T Product X94T 52 30 161
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 $ 160 per order Shipments $125 per shipment Product sustaining $850 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 Rates $ 11 per direct labor-hour $2 per machine-hour $50 per setup Activity Cost Pool Supporting direct labor Machine processing Machine setups Production orders Shipments Product sustaining Total overhead cost K425 Total Expected Activity K425 M67 2,000 M67 200 1,150 3,200 15 15 30 3 Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system? 40 30 3 3 3 3
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 Activity Rates Supporting direct labor $ 8 per direct labor-hour Machine processing $ 4 per machine - hour Machine setups $ 40 per setup Production orders $ 150 per order Shipments $ 120 per shipment Product sustaining $ 900 per product Activity data have been supplied for the following two products: Total Expected Activity K425 -M67 Number of units produced per year 200 2,000 Direct labor-hours 925 40 Machine - hours 2, 600 30 Machine setups 11 1 Production orders 11 1 Shipments 22 1 Product sustaining 1 1
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 Activity Rate $7 per direct labor-hour $4 per machine-hour $ 45 per setup Production orders. $ 160 per order Shipments $ 130 per shipment Product sustaining $ 900 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 $ K425 Total Expected Activity K425 M67 2,000 0 $ 200 1,000 3,000 5 5 Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system? M67 10 1 30 20 1 1 0 1 1