Gable Company uses three activity pools. Each pool has a cost driver. Information for Gable Company follows:Total Costof Pool$ 454,960100,00072,720EstimatedCost Driver96,80010,000505Activity PoolsMachiningDesigning costsSetup costsSuppose that Gable Company manufactures three products, A, B, and C. Information about these products follows:Product A Product B38,0004,00040Number of machine hoursNumber of design hoursNumber of batchesCost DriverNumber of machine hoursNumber of design hoursNumber of batchesProduct AProduct BProduct CTotal OverheadAssigned48,0002,200170Required:Using activity rates, determine the amount of overhead assigned to each product.Note: Do not round intermediate calculations. Round the final answer to nearest whole number.Product C10,8003,800295

Gable Company uses three activity pools. Each pool has a cost driver. Information for Gable Company follows: Total Cost of Pool Estimated Cost Driver 96,800 10,000 505 Activity Pools Machining Designing costs Setup costs Number of machine hours Number of design hours Number of batches Suppose that Gable Company manufactures three products, A, B, and C. Information about these products follows: $ 454,960 100,000 72,720 Product A Product B Product C Cost Driver Number of machine hours Number of design hours. Number of batches Total Overhead Assigned Product A Product B 38,000 4,000 40 48,000 2,200 170 Required: Using activity rates, determine the amount of overhead assigned to each product. Note: Do not round intermediate calculations. Round the final answer to nearest whole number. Product C 10,800 3,800 295

Gable Company uses three activity pools. Each pool has a cost driver. Information for Gable Company follows: Total Cost of Pool Estimated Cost Driver 96,800 10,000 505 Activity Pools Machining Designing costs Setup costs Number of machine hours Number of design hours Number of batches Suppose that Gable Company manufactures three products, A, B, and C. Information about these products follows: $ 454,960 100,000 72,720 Product A Product B Product C Cost Driver Number of machine hours Number of design hours. Number of batches Total Overhead Assigned Product A Product B 38,000 4,000 40 48,000 2,200 170 Required: Using activity rates, determine the amount of overhead assigned to each product. Note: Do not round intermediate calculations. Round the final answer to nearest whole number. Product C 10,800 3,800 295

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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Solomon Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity cost pools follow: Activities Unit Level Batch Level Product Level Facility Level Cost $ 78, 300 $ 28,910 $ 15,000 $ 180,000 Cost driver 2,700 labor hours 49 setups Percentage of use 18,000 units Production of 730 sets of cutting shears, one of the company's 20 products, took 180 labor hours and 5 setups and consumed 16 percent of the product - sustaining activities. Required Had the company used labor hours as a companywide allocation base, how much overhead would it have allocated to the cutting shears? How much overhead is allocated to the cutting shears using activity-based costing? Compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 730 units…
Klamath Corp. produces two products: saws and drills. Three activities are used in their manufacture. These activities and their associated costs and bases are as follows: Activity Stamping Assembly Setup Activity Base Machine hours Labor hours Number of setups Units produced Budgeted Costs Saws Drills $200,000 400,000 30,000 Saws 4,000 7,000 $ 3 500 Activity Base Machine hours Labor hours Number of setups a. Determine the activity rate for each activity. Stamping Assembly Setup Drills 6,000 13,000 12 600 per machine hour per labor hour per setup b. Determine the factory overhead to be allocated to each unit of product. Round your answers to two decimal places, if necessary. per unit per unit Total 10,000 20,000 15 Previous
Greenwood Company manufactures two products—15,000 units of Product Y and 7,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z: Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity Machining Machine-hours $ 227,700 11,000 MHs Machine setups Number of setups $ 153,900 270 setups Production design Number of products $ 91,000 2 products General factory Direct labor-hours $ 257,000 10,000 DLHs Activity Measure Product Y Product Z Machining 8,700 2,300 Number of setups 60 210 Number of products 1 1 Direct labor-hours 8,700 1,300 10. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z? (Round your…
Data concerning three of Kilmon Corporation’s activity cost pools appear below: Activity Cost Pools Estimated Overhead Cost Expected Activity Assembling products $ 86,070 4,530 assembly hours Designing products $ 605,412 3,012 product design hours Setting up batches $ 48,140 830 batch set-ups Required: Compute the activity rates for each of the three cost pools.
Greenwood Company manufactures two products—15,000 units of Product Y and 7,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z: Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity Machining Machine-hours $ 231,000 11,000 MHs Machine setups Number of setups $ 180,000 300 setups Production design Number of products $ 94,000 2 products General factory Direct labor-hours $ 260,000 10,000 DLHs Activity Measure Product Y Product Z Machining 9,000 2,000 Number of setups 60 240 Number of products 1 1 Direct labor-hours 9,000 1,000 4. What is the activity rate for the Machine Setups activity cost pool?
Heintz Products uses activity-based costing to account for product costs. The plant manager has estimated the following cost drivers and rates. Activity Centers Materials inspection Equipment maintenance Machine setups Packing and shipping Cost Drivers Direct materials cost Machine-hours Number of production runs Pounds of finished output Rate per Cost Driver Unit 15% of materials cost $ 19 per machine-hour $ 6,370 per setup $ 4.20 per pound Direct materials costs were $508,000 and direct labor costs were $348,000 during November, when the plant finished 7,000 pounds of product, had 20 setups, and ran the machines for 15,000 hours. There were no work-in-process inventories. Required: Use T-accounts to show the flow of materials, labor, and overhead costs from the four overhead activity centers through Work- in-Process Inventory and out to Finished Goods Inventory. Use the accounts Materials Inventory, Wages Payable, Work-in- Process Inventory, Finished Goods Inventory, and four…
Lynwood, Inc. produces two different products (Product A and Product X) using two different activities: Machining, which uses machine hours as an activity driver, and Inspection, which uses number of batches as an activity driver. The activity rate for Machining is $130 per machine hour, and the activity rate for Inspection is $520 per batch. The activity drivers are used as follows: Product A Product X Total Machine hours 1,200 3,200 4,400 Number of batches 46 16 62 What is the amount of Machining cost assigned to Product X? Multiple Choice $416,000 $27,500 $520,000 $130,000
Bluefield Corp. has two product lines, A and B. Bluefield has identified the following information about its overhead and potential cost drivers: Total overhead $64,400 Cost drivers Number of labor hours 2,700 Number of machine hours 40,000 Required:1. Suppose Bluefield Corp. uses a traditional costing system with number of labor hours as the cost driver. Determine the amount of overhead assigned to each product line if Product A requires 62 percent of the labor hours and Product B requires 38 percent. 2. Suppose Bluefield uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line if Product A consumes 17,800 machine hours and Product B consumes 22,200.
Data concerning three of Kilmon Corporation’s activity cost pools appear below: Activity Cost Pools Estimated Overhead Cost Expected Activity Assembling products $ 65,540 4,520 assembly hours Designing products $ 578,112 3,011 product design hours Setting up batches $ 41,820 820 batch set-ups Required: Compute the activity rates for each of the three cost pools. (Round your answers to 2 decimal places.) Activities Activity rate Assembly products Designing products Setting up batches
Lynwood, Inc. produces two different products (Product A and Product X) using two different activities: Machining, which uses machine hours as an activity driver, and Inspection, which uses number of batches as an activity driver. The activity rate for Machining is $180 per machine hour, and the activity rate for Inspection is $580 per batch. The activity drivers are used as follows: Product A: (machine hours= 1,200) (number of batches 55) Product X: (mahine hours= 3,200) (number of batches 18) Totals: (Machine hours= 4,400) (number of batches 73) What is the amount of Machining cost assigned to Product X?
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???
Gable Company uses three activity pools. Each pool has a cost driver. Information for Gable Company follows: Total Cost of Pool $ 380, 120 86,400 74,672 Estimated Cost Driver 88,400 9,000 525 Activity Pools Machining Designing costs Setup costs E4-5 (Algo) Assigning Costs Using Activity Proportions [LO 4-5, 4-6] Suppose that Gable Company manufactures three products, A, B, and C. Information about these products follows: Product A 34,000 3,600 60 Number of machine hours Number of design hours Number of batches Cost Driver Number of machine hours Number of design hours Number of batches Product A Product B Product C Total Overhead Assigned Product B Product C 10,400 3,400 285 Required: 1. Using activity proportions, determine the amount of overhead assigned to each product. Note: Do not round your intermediate calculations. Round your final answers to nearest whole number. 44,000 2,000 180