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 The company just completed a single order from Interstate Trucking for 2,300 custom seat cushions. The order was produced in three batches. Each seat cushion required 0.6 direct labor-hours. The selling price was $142.40 per unit, the direct materials cost was $110 per unit, and the direct labor cost was $14.30 per unit. This was Interstate Trucking's only order during the year. Costs Activity Rate $ 14 per direct labor-hour $ 86 per batch $ 287 per order $ 2,612 per customer Required: Calculate the customer margin on sales to Interstate Trucking for the year. Interstate Trucking Customer Margin-ABC Analysis

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 The company just completed a single order from Interstate Trucking for 2,300 custom seat cushions. The order was produced in three batches. Each seat cushion required 0.6 direct labor-hours. The selling price was $142.40 per unit, the direct materials cost was $110 per unit, and the direct labor cost was $14.30 per unit. This was Interstate Trucking's only order during the year. Costs Activity Rate $ 14 per direct labor-hour $ 86 per batch $ 287 per order $ 2,612 per customer Required: Calculate the customer margin on sales to Interstate Trucking for the year. Interstate Trucking Customer Margin-ABC Analysis

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Problem 1Q

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XYZ, 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 The company just completed a single order from I Truck for 1,600 custom seat cushions. The order was produced in three batches. Each seat cushion required 0.3 direct labor-hours. The selling price was $141.80 per unit, the direct materials cost was $106 per unit, and the direct labor cost was $13.90 per unit. This was I Truck's only order during the year. Required: Calculate the customer margin on sales to I Truck for the year. Costs: Interstate Trucking Customer Margin-ABC Analysis Customer margin Activity Rate $10 per direct labor-hour $92 per batch $280…
XYZ Co. currently uses traditional costing procedures, applying $800,000 of overhead to products Beta and Zeta on the basis of direct labor hours. The company is considering a shift to activity-based costing and the creation of individual cost pools that will use direct labor hours (DLH), production setups (SU), and number of parts components (PC) as cost drivers. Data on the cost pools and respective driver volumes follow. Product Pool No.1 (Driver: Pool No. 2 (Driver: SU) Pool No. 3 (Driver: PC) DLH) Zeta 1,200 55 2,250 Beta 2,800 45 750 Pool Cost $160,000 $280,000 $360,000 The overhead cost allocated to Zeta by using activity-based costing procedures would be: O a. $356,000. O b. $472,000. O c. None of the given answers. O d. $328,00. O e. $444,00.
Teach Gear Inc. produces 3 types of office equipment; Bronze, silver and Gold and uses an activity-based product costing system. They have identified 5 activities. Each activity, it costs and related activity driver is summarized below: Activity Material handling Material insertion Activity Units to be produced Orders to be shipped Number of parts per unit Machine hours per unit Labor hours per unit Cost Tasks: Automated Machinery finishing Packaging The following data are provided for each product line: Activity driver Number of parts Number of parts 350,000 Machine hours 150,000 Labor hours 90,000 Orders shipped Bronze P120,000 240,000 6,000 1,200 4. 1 2 Silver 4,000 800 5 2 3 Gold 2,000 400 8 3 لنا Make a narrative recommend the unit cost per unit of Bronze, Silver and Gold using the ABC system. In support of your recommendation show your solution presenting: 1. The computation of the activity cost rates 2. the computation of the estimated volume (TOTAL PARTS, TOTAL MACHINE HOURS,…
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Roll Board Inc. manufactures several models of high-quality skateboards. The company’s ABC system has four activity cost pools, which are listed below along with their activity measures and activity rates: Activity Cost Pool Activity Measure Activity Rate Supporting direct labour Number of direct labour-hours $ 4 per direct labour-hour Batch processing Number of batches $ 37 per batch Order processing Number of orders $ 83 per order Customer service Number of customers $ 52 per customer The company just completed a single order from SkateCo for 1,650 entry-level skateboards. The order was produced in 31 batches. Each skateboard required 0.6 direct labour-hours. The selling price was $125 per skateboard, the direct materials cost was $69.40 per skateboard, and the direct labour cost was $18.30 per direct labour-hour. This was the only order from SkateCo for the year. Required: Prepare a report showing the customer margin on sales to SkateCo for the year.
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. The company just completed a single order from Interstate Trucking for 2,200 custom seat cushions. The order was produced in three batches. Each seat cushion required 0.6 direct labor-hours. The selling price was $141.70 per unit, the direct materials cost was $104 per unit, and the direct labor cost was $14.40 per unit. This was Interstate Trucking's only order during the year. Costs: Required: Calculate the customer margin on sales to Interstate Trucking for the year. Activity Rate $ 14 per direct labor-hour $94 per batch $280 per order $ 2,620…
Saratoga Company manufactures jobs to customer specifications. The company is conducting a time-driven activity-based costing study in its Purchasing Department to better understand how Purchasing Department labor costs are consumed by individual jobs. To aid the study, the company provided the following data regarding its Purchasing Department and three of its many jobs: Number of employees Average salary per employee 11 $ 27,000 Weeks of employment per year Hours worked per week 52 40 Practical capacity percentage 85% Requisition Minutes per unit of the activity Processing 15 Bid Evaluation Inspection 45 30 Job X Job Y Job Z Number of requisitions processed Number of bid evaluations 6 3 2 4 3 5 Number of inspections 7 3 7 Now assume that Saratoga Company would like to answer the following "what if" question using its time-driven activity-based costing system: Assuming our estimated activity demands for all jobs in the next period will be as shown below, how will this affect our job…
Lakeside Inc. manufactures four lines of remote control boats and uses activity-based costing to calculate product cost. Activity Cost Pools EstimatedTotal Cost Estimated Cost Driver Machining $ 334,000 13,600 machine hours Setup 76,000 420 batches Quality control 103,000 830 inspections Compute the activity rates for each of the following activity cost pools: How do you find the activitiy costs???
Munoz Sporting Goods Corporation makes two types of racquets, tennis and badminton. The company uses the same facility to make both products even though the processes are quite different. The company has recently converted its cost accounting system to activity-based costing. The following are the cost data that Jane Price, the cost accountant, prepared for the third quarter of the year (during which Munoz made 68,500 tennis racquets and 29,200 badminton racquets). Direct Cost Direct materials Direct labor Category Unit level Batch level Product level Facility level Total Estimated Cost $ 754,000 320,000 155,000 660,000 $ 1,889,000 Required A Tennis Racquet (TR) $16.60 per unit 33.50 per unit Badminton Racquet (BR) $ 13.20 per unit 23.70 per unit Inspectors are paid according to the number of actual hours worked, which is determined by the number of racquets inspected. Engineers who set up equipment for both products are paid monthly salaries. TV commercial fees are paid at the…
Marvel Parts, Incorporated, manufactures auto accessories. One of the company's products is a set of seat covers that can be adjusted to fit nearly any small car. The company has a standard cost system in use for all of its products. According to the standards that have been set for the seat covers, the factory should work 1,005 hours each month to produce 2,010 sets of covers. The standard costs associated with this level of production are: Direct materials Direct labor Variable manufacturing overhead (based on direct labor-hours) Direct materials (6,000 yards) Direct labor Variable manufacturing overhead Total $28,542 $ 8,040 $ 3,618 During August, the factory worked only 1,200 direct labor-hours and produced 2,600 sets of covers. The following actual costs were recorded during the month: Per Set of Covers $ 14.20 4.00 Total $ 35,100 $ 10,920 $ 5,460 1. Materials price variance 1. Materials quantity variance 2. Labor rate variance 1.80 $ 20.00 2. Labor efficiency variance 3. Variable…
XYZ Co.currently uses traditional costing procedures, applying $800,000 of overhead to products Beta and Zeta on the basis of direct labor hours. The company is considering a shift to activity-based costing and the creation of individual cost pools that will use direct labor hours (DLH), production setups (SU), and number of parts components (PC) as cost drivers. Data on the cost pools and respective driver volumes follow. Product Pool No.1 (Driver: DLH) Pool No. 2 (Driver: SU) Pool No. 3 (Driver: PC) Fi Zeta 1,200 55 2,250 Beta 2,800 45 750 Pool Cost $160,000 $280,000 $360,000 The overhead cost allocated to Beta by using activity-based costing procedures would be: O a. $444,000. O b. $472,00. Oc. $328,000. O d. None of the given answers. O e. $356,000. NEXT PAGE OUS PAGE