Estimated Еxpected Activity Activity Cost Pool Activity Measure Machine related machine hours Machine setups number of setups Purchase orders number of orders General factory direct labor hours Totals Overhead Cost $1,500,000 $300,000 50,000 MHs 750 setups $192,500 3,500 orders $504,000 $2,496,500 36,000 DLHS Activity Measure machine hours number of setups Product Delta Product Sigma 28,000 22,000 350 400 number of orders 1,900 1,600 direct labor hours 20,000 16,000

The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include: Fixed costs (salaries, tools): 64,900 per year Variable costs (supplies): 1.35 per maintenance hour Estimated usage by: Actual usage by: Required: 1. Calculate a single charging rate for the Maintenance Department. 2. Use this rate to assign the costs of the Maintenance Department to the user departments based on actual usage. Calculate the total amount charged for maintenance for the year. 3. What if the Assembly Department used 4,000 maintenance hours in the year? How much would have been charged out to the three departments?

Firenza Company manufactures specialty tools to customer order. Budgeted overhead for the coming year is: Previously, Sanjay Bhatt, Firenza Companys controller, had applied overhead on the basis of machine hours. Expected machine hours for the coming year are 50,000. Sanjay has been reading about activity-based costing, and he wonders whether or not it might offer some advantages to his company. He decided that appropriate drivers for overhead activities are purchase orders for purchasing, number of setups for setup cost, engineering hours for engineering cost, and machine hours for other. Budgeted amounts for these drivers are 5,000 purchase orders, 500 setups, and 2,500 engineering hours. Sanjay has been asked to prepare bids for two jobs with the following information: The typical bid price includes a 40 percent markup over full manufacturing cost. Required: 1. Calculate a plantwide rate for Firenza Company based on machine hours. What is the bid price of each job using this rate? 2. Calculate activity rates for the four overhead activities. What is the bid price of each job using these rates? 3. Which bids are more accurate? Why?

Self-Construction Olson Machine Company manufactures small and large milling machines. Selling prices of these machines range from 35,000 to 200,000. During the 5-month period from August 1, 2019, through December 31, 2019, Olson manufactured a milling machine for its own use. This machine was built as part of the regular production activities. The project required a large amount of time front planning and supervisory personnel, as well as that of some of the companys officers, because it was a more sophisticated type of machine than the regular production models. Throughout the 5-month period, Olson charged all costs directly associated with the construction of the machine to a special account entitled Asset Construction Account. An analysis of the charges to this account as of December 31, 2019, follows: Olson allocates factory overhead to normal production as a percent of direct labor dollars as follows: Olson uses a flat rate of 40% of direct labor dollars to allocate general and administrative overhead. During the machine testing period, a cutter head malfunctioned and did extensive damage to the machine table and one cutter housing. This damage was not anticipated and was the result of an error in the assembly operation. Although no additional raw materials were needed to make the machine operational after the accident, the following labor for rework was required: Olson has included all these labor charges in the asset construction account. In addition, it included in the account the repairs and maintenance charges of 1,340 that it incurred as a result of the malfunction. Required: 1. Compute, consistent with GAAP and common practice, the amount that Olson should capitalize for the milling machine as of December 31, 2019, when it declares the machine operational. 2. Next Level Identify the costs you included in Requirement 1 for which there are acceptable alternative procedures. Describe the alternative procedure(s) in each case.

The cost data for Evencoat Paint for the year 2019 is as follows: Month Gallons ofPaintProduced   EquipmentMaintenanceExpenses January   110,000       $70,700   February   68,000       66,800   March   71,000       67,000   April   77,000       68,100   May   95,000       69,200   June   101,000       70,300   July   125,000       70,400   August   95,000       68,900   September   95,000       69,500   October   89,000       68,600   November   128,000       72,800   December   122,000       71,450   A. Using the high-low method, express the company’s maintenance costs as an equation where x represents the gallons of paint produced. Then estimate the fixed and variable costs. Fixed cost $fill in the blank 1 Variable cost $fill in the blank 2 B. Predict the maintenance costs if 90,000 gallons of paint are produced. Maintenance cost $fill in the blank 3 C. Predict the maintenance costs if 81,000 gallons of paint are produced. Maintenance cost $fill in the…

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Carla Vista Remanufacturing rebuilds spot welders for manufacturers. The following budgeted cost data for 2022 are available for Carla Vista: Technicians' wages and benefits Parts manager's salary and benefits Office employee's salary and benefits Other overhead Total budgeted costs (a) Rate charged $ Time Charges Material Loading Charges $245,830 Calculate the rate charged per hour of labour. eTextbook and Media Save for Later 47,580 31,720 $325,130 The company wants a $30 profit margin per hour of labour and a 25% profit margin on parts. It has budgeted for 7,930 hours of repair time in the coming year and estimates that the total invoice cost of parts and materials in 2022 will be $388,000. $36,860 16,490 per hour 25,220 $78,570 Attempts: 0 of 2 used Submit Answer

Given the following information, determine the activity rate for setups. Activity Total Activity-Base Usage Budgeted Activity Cost Setups 10,100             $56,200             Inspections 25,000             $141,400             Assembly (dlh) 79,600             $415,700

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…

Quality costs indices are often used to measure costs of quality relative to some financial measure, such as percent of sales. The following information on sales and quality costs were incurred in January 2024: Sales $510,000 Materials Inspection $43,500 Direct Materials Costs $70,000 Direct Labor Training $11,600 Direct Labor Costs $48,000 Batch Sampling Costs $7,800 Scrap and Rework Costs $16,400 Cost of Returns and Warranty $10,200 What is the quality of cost index? Answer in decimal format (i.e. O.XXX)