EXERCISE 4-5 Assigning Overhead to Products in ABC LO4-2,LO4-3 Sultan Company uses an activity-based costing system. At the beginning of the year, the company made the following estimates of cost and activity for its five activity cost pools: Activity Cost Pool Labor-related Activity Measure Expected Overhead Cost Expected Activity Direct labor-hours $156,000 Purchase orders Number of orders $11,000 26,000 DLHS 220 orders Parts management Number of part types $80,000 100 part types Board etching Number of boards $90,000 2,000 boards General factory Machine-hours $180,000 20,000 MHs Required: 1. Compute the activity rate for each of the activity cost pools. 2. The expected activity for the year was distributed among the company's four products as follows: Expected Activity Activity Cost Pool Product A Product B Product C Product D Labor-related (DLHs) 6,000 11,000 4,000 Purchase orders (orders) 60 30 40 5,000 90 Parts management (part types) 30 15 40 15 Board etching (boards) 500 900 600 0 General factory (MHS) 3,000 8.000 3,000 6.000 Using the ABC data, determine the total amount of overhead cost assigned to each product.

EXERCISE 4-5 Assigning Overhead to Products in ABC LO4-2,LO4-3 Sultan Company uses an activity-based costing system. At the beginning of the year, the company made the following estimates of cost and activity for its five activity cost pools: Activity Cost Pool Labor-related Activity Measure Expected Overhead Cost Expected Activity Direct labor-hours $156,000 Purchase orders Number of orders $11,000 26,000 DLHS 220 orders Parts management Number of part types $80,000 100 part types Board etching Number of boards $90,000 2,000 boards General factory Machine-hours $180,000 20,000 MHs Required: 1. Compute the activity rate for each of the activity cost pools. 2. The expected activity for the year was distributed among the company's four products as follows: Expected Activity Activity Cost Pool Product A Product B Product C Product D Labor-related (DLHs) 6,000 11,000 4,000 Purchase orders (orders) 60 30 40 5,000 90 Parts management (part types) 30 15 40 15 Board etching (boards) 500 900 600 0 General factory (MHS) 3,000 8.000 3,000 6.000 Using the ABC data, determine the total amount of overhead cost assigned to each product.

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter18: Activity-Based Costing

Section: Chapter Questions

Problem 18.8EX: Identifying activity bases in an activity-based cost system Select Foods Inc. uses activity-based...

See similar textbooks

Similar questions

Exercise 4-5 Assigning Overhead to Products in ABC [LO4-2, LO4-3] Sultan Company uses an activity-based costing system. At the beginning of the year, the company made the following estimates of cost and activity for its five activity cost pools: Activity Cost Pool Activity Measure ExpectedOverhead Cost Expected Activity Labor-related Direct labor-hours $ 156,000 26,000 DLHs Purchase orders Number of orders $ 11,000 220 orders Parts management Number of part types $ 80,000 100 part types Board etching Number of boards $ 90,000 2,000 boards General factory Machine-hours $ 180,000 20,000 MHs Required: 1. Compute the activity rate for each of the activity cost pools. 2. The expected activity for the year was distributed among the company’s four products as follows: Expected Activity Activity Cost Pool Product A Product B Product C Product D Labor-related (DLHs) 6,000 11,000 4,000 5,000 Purchase orders (orders) 60…
TB MC Qu. 4-49 Boesenhofer, Inc., manufactures and sells... Boesenhofer, Inc., manufactures and sells two products: Product N6 and Product N7. 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 N6 Product N7 Labor-related DLHS Total $345,060 128,534 107,598 2,100 600 4,100 Machine setups 5,000 800 3,800 setups 7,100 Order size MHs 1,400 7,900 $581,192 The activity rate for the Machine Setups activity cost pool is closest to: Multiple Cholce $73.57 per setup $91.81 per setup Prev of 36 Next > 10:54 AM 66°F Mostly cloudy 目。 21 10/20/2021 pe here to search DELL Home End Delete PgUp PgDn F12 PrtScr Insert F10 F11 F8 F9 F7 F4 F5 F6 F3 Num Lock Backspace & %23 %24
Exercise 4-5 (Static) Assigning Overhead to Products in ABC [LO4-2, LO4-3] Sultan Company uses an activity-based costing system. At the beginning of the year, the company made the following estimates of cost and activity for its five activity cost pools: Activity Cost Pool Activity Measure Expected Overhead Cost Expected Activity Labor-related Direct labor-hours $ 156,000 26,000 DLHs Purchase orders Number of orders $ 11,000 220 orders Parts management Number of part types $ 80,000 100 part types Board etching Number of boards $ 90,000 2,000 boards General factory Machine-hours $ 180,000 20,000 MHs Required: 1. Compute the activity rate for each of the activity cost pools. 2. The expected activity for the year was distributed among the company’s four products as follows: Activity Cost Pool Expected Activity Product A Product B Product C Product D Labor-related (DLHs) 6,000 11,000 4,000 5,000 Purchase orders (orders) 60 30 40 90 Parts management (part…
TB MC Qu. 4-96 Welrlck, Inc., manufactures and sells ... Weirick, Inc., manufactures and sells two products: Product T8 and Product P4. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity Estimated Overhead Cost $ 139,900 65,970 1,031,820 $1,237,690 Expected Activity Activity Cost Pools Labor-related Production orders Order size Activity Measures DLHS Product T8 Product P4 5,400 1,000 Total 8,100 1,600 2,700 orders 600 MHs 3,100 4,000 7,100 The total overhead applied to Product P4 under activity-based costing is closest to: (Round your Intermedlete calculations to 2 decimal places.) Multiple Cholce $965,850 $581,320 S652.687 Mc Graw Hill 10:55 AM 66°F Mostly cloudy 21 10/20/2021 P Type here to search DELL PgUp PgDn Home F11 F12 PrtScr Insert Delete F8 F9 F10 F2 F5 F6 F7 F3 F4 Num
12
Question 10?
Can you answer the questions in 17-3B #1-4
Question No.5 Hunter Company manufactures two products (XX and YY). The overhead costs have been divided into four cost pools that use the following activity drivers. Product Number of Orders Number of Set-ups Number of Labor Transactions Labor Hours XX YY Cost per pool 60 20 Rs.16,000 20 80 Rs.13,000 50 70 Rs.2,400 2,000 500 Rs.20,000 Required: Compute the allocation rates for each of the activity drivers listed. Allocate the overhead costs to product XX and product YY using activity-based costing. Compute the overhead rate using machine hours under the functional-based costing system. Allocate the overhead cost to Product XX and YY using the functional-based costing system overhead rate calculated in part ©.
Problem 2 Milky Corporation has provided the following data from its activity-based costing accounting system: Activity Cost Pools Designing products Setting up batches Assembling products Total Cost P1,372,448 P33,300 P126,160 Total Activity 7,798 product design hours 740 batch set-ups 6,640 assembly hours The activity rate for the "designing products" activity cost pool is answer must be in nearest peso A The activity rate for the "setting up batches" activity cost pool is answer should be in nearest peso A The activity rate for the "assembling products" activity cost pool is answer must be in nearest peso A
7
Activity Based Costing
Question 4.1 For its overhead costs, the wholesale distributor Janz Company uses activity-based costing. In terms of the company's annual overhead costs and its activity-based costing system the following data has been provided: Overhead Costs: Wages and salaries $380,000 Non-wage expenses 90,000 Total $470,000 Distribution of Resource Consumption: Activity Cost Pools Filling Orders Product Support Other Total Wages and salaries 20% 65% 15% 100% Non-wage expenses 25% 15% 60% 100% The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. Shown below is the amount of activity for the year: Activity Cost Pool Filling orders Product support Annual Activity 3,100 orders 32 products Not applicable Other Instructions: Compute the activity rates for the Filling Orders and Product Support activity cost pools.