Cost accounting For its inspecting cost pool, Brilliant ProfessorMullen Company expected an overhead cost of$360,000 and an estimated 14,200 inspections. Theactual overhead cost for that cost pool was$395,000 for 16,000 actual inspections. The activity-based overhead rate (ABOR) used to assign thecosts of the inspecting cost pool to products is

Explanation of Activity-Based Overhead Rate (ABOR):The Activity-Based Overhead Rate (ABOR) is the…

Answered: For its inspecting cost pool, Brilliant…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 30P: Primera Company produces two products and uses a predetermined overhead rate to apply overhead....

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Lansing. Inc., provided the following data for its two producing departments: Machine hours are used to assign the overhead of the Molding Department, and direct labor hours are used to assign the overhead of the Polishing Department. There are 30,000 units of Form A produced and sold and 50,000 of Form B. Required: 1. Calculate the overhead rates for each department. 2. Using departmental rates, assign overhead to live two products and calculate the overhead cost per unit. How does this compare with the plantwide rate unit cost, using direct labor hours? 3. What if the machine hours in Molding were 1,200 for Form A and 3,800 for Form B and the direct labor hours used in Polishing were 5,000 and 15,000, respectively? Calculate the overhead cost per unit for each product using departmental rates, and compare with the plantwide rate unit costs calculated in Requirement 2. What can you conclude from this outcome?
If a company bases its predetermined overhead rate on 100,000 machine hours, and It actually has 100,000 machine hours, would there be an under applied or over applied overhead?
Rulers Company is a neon sign company that estimated overhead will be $60,000, consisting of 1,500 machine hours. The cost to make Job 416 is $95 in neon, 15 hours of labor at $13 per hour, and five machine hours. During the month, it incurs $95 in indirect material cost, $130 in administrative labor, $320 in utilities, and $350 in depreciation expense. What is the predetermined overhead rate if machine hours are considered the cost driver? What is the cost of Job 416? What is the overhead incurred during the month?
John Sheng, a cost accountant at Starlet Company, is developing departmental factory overhead application rates for the companys Tooling and Fabricating departments. The budgeted overhead for each department and the data for one job are as follows: Using the departmental overhead application rates, total overhead applied to Job 231 in the Tooling and Fabricating departments will be: a. 225. b. 303. c. 537. d. 671.
Patterson Company produces wafers for integrated circuits. Data for the most recent year are provided: aCalculated using number of dies as the single unit-level driver. bCalculated by multiplying the consumption ratio of each product by the cost of each activity. Required: 1. Using the five most expensive activities, calculate the overhead cost assigned to each product. Assume that the costs of the other activities are assigned in proportion to the cost of the five activities. 2. Calculate the error relative to the fully specified ABC product cost and comment on the outcome. 3. What if activities 1, 2, 5, and 8 each had a cost of 650,000 and the remaining activities had a cost of 50,000? Calculate the cost assigned to Wafer A by a fully specified ABC system and then by an approximately relevant ABC approach. Comment on the implications for the approximately relevant approach.
A company calculated the predetermined overhead based on an estimated overhead of $70.000, and the activity for the cost driver was estimated as 2,500 hours. If product A utilized 1,350 hours and product 8 utilized 1,100 hours, what was the total amount of overhead assigned to the products? A. $35000 B. $30.800 C. $37,800 D. $68,600
Cynthia Rogers, the cost accountant for Sanford Manufacturing, is preparing a management report that must include an allocation of overhead. The budgeted overhead for each department and the data for one job are as follows: Using the departmental overhead application rates, and allocating overhead on the basis of direct labor hours, overhead applied to Job 231 in the Tooling Department would be: a. 44.00. b. 197.50. c. 241.50. d. 501.00.
For its inspecting cost pool, Ellsworth, Inc. expected overhead cost of $560000 and 4000 inspections. The actual overhead cost for that cost pool was $640000 for 5000 inspections. The activity-based overhead rate used to assign the costs of the inspecting cost pool to products is $128 per inspection. $160 per inspection. $140 per inspection. $112 per inspection.
For its inspecting cost pool, Bramble, Inc. estimated overhead cost of $520000 and 4000 inspections. The actual overhead cost for that cost pool was $600000 for 5000 inspections. The activity-based overhead rate used to assign the costs of the inspecting cost pool to products is O $150 per inspection. O $104 per inspection O $130 per inspection O $120 per inspection.
Hakara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system, product A has been assigned overhead of $24.82 per unit, while product B has been assigned $13.58 per unit. Management feels that an ABC system will provide a more accurate allocation of the overhead costs and has collected the following cost pool and cost driver information: Cost Pools Activity Costs Cost Drivers Activity Driver Consumption Machine setup $ 158,000 Setup hours 2,000 Materials handling 112,000 Pounds of materials 16,000 Electric power 25,000 Kilowatt-hours 25,000 The following cost information pertains to the production of A and B, just two of Hakara's many products: A B Number of units produced 5,000 10,000 Direct materials cost $ 32,000 $ 41,000 Direct labor cost $ 41,000 $ 38,000 Number of setup hours 100 200 Pounds of materials used 1,000 1,000 Kilowatt-hours 2,000 4,000 Required: 1. Use…
Hakara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system, product A has been assigned overhead of $35.29 per unit, while product B has been assigned $8.25 per unit. Management feels that an ABC system will provide a more accurate allocation of the overhead costs and has collected the following cost pool and cost driver information: Cost Pools Activity Costs Cost Drivers Activity Driver Consumption Machine setup $ 261,000 Setup hours 3,000 Materials handling 153,000 Pounds of materials 17,000 Electric power 38,000 Kilowatt-hours 38,000 The following cost information pertains to the production of A and B, just two of Hakara's many products: A B Number of units produced 4,000 20,000 Direct materials cost $ 37,000 $ 27,000 Direct labor cost $ 41,000 $ 40,000 Number of setup hours 200 200 Pounds of materials used 1,000…
Pharoah Co. has identified an activity cost pool to which it has allocated estimated overhead of $10212000. It has determined the expected use of cost drivers for that activity to be 851000 inspections. Widgets require 217000 inspections, Gadgets 167000 inspections, and Targets 467000 inspections. How much is the overhead assigned to each product? O Widgets $3404000, Gadgets $3404000, Targets $3404000 O Widgets $217000, Gadgets $167000, Targets $467000 O Widgets $3404000, Gadgets $1702000, Targets $5106000 O Widgets $2604000, Gadgets $2004000, Targets $5604000

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