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Exercise 03: Major Instrument, Inc manufactures two products: missile range instruments and space pressure gauges. During April, 40 range instruments and 200 pressure gauges were produced, and overhead costs of $95.000 were estimated. An analysis of estimated overhead costs reveals the following activities. Activity 1 Material handling 2 Machine setups 3 Quality inspections The cost driver volume for each product was as follows. Cost Driver Number of requisitions Number of setups Number of inspections Activity Cost Pools Cost Driver Number of requisitions Number of setups Number of inspections Instructions (a) Determine the overhead rate for each activity. Estimated Overhead Instruments 25 150 250 Gaures 300 300 Expected Use of Cost Drivers per Activity Total Cost $4,000 $2,750 $2,000 58.750 Total 450 550 Activity-based Overhead Rates

Exercise 03: Major Instrument, Inc manufactures two products: missile range instruments and space pressure gauges. During April, 40 range instruments and 200 pressure gauges were produced, and overhead costs of $95.000 were estimated. An analysis of estimated overhead costs reveals the following activities. Activity 1 Material handling 2 Machine setups 3 Quality inspections The cost driver volume for each product was as follows. Cost Driver Number of requisitions Number of setups Number of inspections Activity Cost Pools Cost Driver Number of requisitions Number of setups Number of inspections Instructions (a) Determine the overhead rate for each activity. Estimated Overhead Instruments 25 150 250 Gaures 300 300 Expected Use of Cost Drivers per Activity Total Cost $4,000 $2,750 $2,000 58.750 Total 450 550 Activity-based Overhead Rates

FINANCIAL ACCOUNTING
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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Exercise 03: Major Instrument, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 40 range instruments and 200 pressure gauges were produced, and overhead costs of $95,000 were estimated. An analysis of estimated overhead costs reveals the following activities Activity 1 Material handling 2 Machine setups 3 Quality inspections The cost driver volume for each product was as follows. Cost Driver Number of requisitions Number of setups Number of inspections Activity Cost Pools Instructions (a) Determine the overhead rate for each activity. Estimated Overhead Cost Driver Cost Driver Number of requisitions Number of setups Number of inspections Units produced (b) Overhead cost per unit (a) (b) Instruments 25 150 250 Number Expected Use of Cost Drivers per Activity Instruments Gauges 500 300 300 Cost (b) Assign the manufacturing overhead costs for April to the two products using activity-based costing. Ganges Total Cost Number Total 525 450 550 - $4,000 $2,750 $2,000 58,750 Cost Activity-based Overhead Rates Cost Assigned ACCT212-Mod02-Ch04 Classwork 04 - Page 5 of 9
Transcribed Image Text:Exercise 03: Major Instrument, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 40 range instruments and 200 pressure gauges were produced, and overhead costs of $95,000 were estimated. An analysis of estimated overhead costs reveals the following activities Activity 1 Material handling 2 Machine setups 3 Quality inspections The cost driver volume for each product was as follows. Cost Driver Number of requisitions Number of setups Number of inspections Activity Cost Pools Instructions (a) Determine the overhead rate for each activity. Estimated Overhead Cost Driver Cost Driver Number of requisitions Number of setups Number of inspections Units produced (b) Overhead cost per unit (a) (b) Instruments 25 150 250 Number Expected Use of Cost Drivers per Activity Instruments Gauges 500 300 300 Cost (b) Assign the manufacturing overhead costs for April to the two products using activity-based costing. Ganges Total Cost Number Total 525 450 550 - $4,000 $2,750 $2,000 58,750 Cost Activity-based Overhead Rates Cost Assigned ACCT212-Mod02-Ch04 Classwork 04 - Page 5 of 9
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