Greenwood Company manufactures two products-15,000 units of Product Y and 7,000 units of Product Z. The comp 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 i available for the company as a whole and for Products Y and Z: Activity Cost Pool Machining Machine setups Production design General factory Activity Measure Machining Number of setups Number of products Direct labor-hours Foundational 4-3 (Algo) Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Activity rate Product Y 7,100 60 per MH 1 7,100 Estimated Overhead Cost $ 210,100 $ 45,100 $ 75,000 $ 241,000 Product Z 3,900 50 1 2,900 Expected Activity 11,000 MHS 110 setups 2 products What is the activity rate for the Machining activity cost pool? (Round your answer to 2 decimal places.) 10,000 DLHS

Greenwood Company manufactures two products-15,000 units of Product Y and 7,000 units of Product Z. The comp 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 i available for the company as a whole and for Products Y and Z: Activity Cost Pool Machining Machine setups Production design General factory Activity Measure Machining Number of setups Number of products Direct labor-hours Foundational 4-3 (Algo) Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Activity rate Product Y 7,100 60 per MH 1 7,100 Estimated Overhead Cost $ 210,100 $ 45,100 $ 75,000 $ 241,000 Product Z 3,900 50 1 2,900 Expected Activity 11,000 MHS 110 setups 2 products What is the activity rate for the Machining activity cost pool? (Round your answer to 2 decimal places.) 10,000 DLHS

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Description: !Required informationFoundational (Algo) [LO4-1, LO4-2, LO4-3, LO4-4]Greenwood Company manufactures two products-15,000 units of Product Y and 7,000 units of Product Z. The companyuses a plantwide overhead rate based on direct labor-hours. It is con

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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Assume a company manufactures only two products-14,000 units of Product G and 6,000 units of Product H. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to three cost pools. The following additional information is available for the company as a whole and for Products G and H: Activity Cost Pool Machining Machine setups Product design Activity Measure Machine-hours Number of setups Number of products Activity Measure Machine-hours Number of setups Number of products Product G Product H 9,000 50 1 6,000 150 1 Estimated Overhead Cost Expected Activity 15,000 MH 200 Setups $ 300,000 $ 150,000 $ 78,000 2 Products Using the ABC system, how much total overhead cost would be assigned from all of the activities to Product H?
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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 Activity Rate $10 per direct labor-hour $90 per batch $286 per order $ 2,602 per customer The company just completed a single order from Interstate Trucking for 2,800 custom seat cushions. The order was produced in four batches. Each seat cushion required 0.3 direct labor-hours. The selling price was $141.10 per unit, the direct materials cost was $102 per unit, and the direct labor cost was $14.20 per unit. This was Interstate Trucking's only order during the year. Required: Calculate the customer margin on sales to Interstate Trucking for the…
Shine Ltd manufactures two products, Exe and Zed. Currently, overheads are apportioned using a traditional absorption costing basis. You are the cost accountant and from the class discussion on activity based costing (ABC), you are considering its implementation in your company for the purposes of charging overheads to production. The following information has been provided: Type of cost Amount Current basis Volume related costs Sh. 600,000 Machine hours Purchasing related cost Sh.420,000 Labour hours Set-up costs Sh. 360,000 Labour hours Extracts from the standard costs show the following: EXE ZED Labour hours per unit 4 2 Machine hours per unit 2 2 Budgeted production next year 20,000 10,000 Number of purchase orders per annum 150 60 Number of machine set-up per annum 70 50 Required: Using ABC system, what is the overhead per unit for product Zed? Select one: A. Sh. 23.5 B.…
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Deemer Corporation has an activity-based costing system with three activity cost pools--Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow: Overhead costs: Equipment expense $ 125,000 Indirect labor $ 5,200 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Processing Supervising Other Equipment expense 0.40 0.40 0.20 Indirect labor 0.40 0.40 0.20 Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow: Activity: MHs (Processing) Batches (Supervising) Product F6 16,400 910 Product X0 1,490 1,350 Total 17,890 2,260 What is…
Maxey & Sons manufactures two types of storage cabinets-Type A and Type B-and applies manufacturing overhead to all units at the rate of $120 per machine hour. Production information follows. Descriptions Anticipated volume (units) Direct-material cost per unit Direct-labor cost per unit Descriptions The controller, who is studying the use of activity-based costing, has determined that the firm's overhead can be identified with three activities: manufacturing setups, machine processing, and product shipping. Data on the number of setups, machine hours, and outgoing shipments, which are the activities' three respective cost drivers, follow. Setups Machine hours Outgoing shipments Type A 140 48,000 200 Required 1 Required 2 Required 3 Type A 24,000 $ 28 33 The firm's total overhead of $13,860,000 is subdivided as follows: manufacturing setups, $3,024,000; machine processing, $8,316,000; and product shipping, $2,520,000. Required: 1. Compute the unit manufacturing cost of Type A and Type…