Health R US To meet Food and Drug Administration requirements and to assure its customers of safe, sanitary, and nutritious food, Health 'R Us engages in a high level of quality control. Health 'R Us assigns its quality-control overhead costs to all products at a rate of 17% of direct labor costs. Its direct labor cost for the month of June for its low-calorie breakfast line is $74,00O. In response to repeated requests from its financial vice president, Health 'R Us's management agrees to adopt activity-based costing. Data relating to the low- calorie breakfast line for the month of June are as follows. Overhead Number of Cost Drivers Activity Cost Pools Cost Drivers Rate Used per Activity Inspections of material received Number of pounds $0.90 per pound 5,500 pounds In-process inspections Number of servings $0.33 per serving 10,700 servings Customer orders $12.00 per order 430 orders FDA certification

Health R US To meet Food and Drug Administration requirements and to assure its customers of safe, sanitary, and nutritious food, Health 'R Us engages in a high level of quality control. Health 'R Us assigns its quality-control overhead costs to all products at a rate of 17% of direct labor costs. Its direct labor cost for the month of June for its low-calorie breakfast line is $74,00O. In response to repeated requests from its financial vice president, Health 'R Us's management agrees to adopt activity-based costing. Data relating to the low- calorie breakfast line for the month of June are as follows. Overhead Number of Cost Drivers Activity Cost Pools Cost Drivers Rate Used per Activity Inspections of material received Number of pounds $0.90 per pound 5,500 pounds In-process inspections Number of servings $0.33 per serving 10,700 servings Customer orders $12.00 per order 430 orders FDA certification

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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Waterway Toys & Games, Inc. manufactures specialty toys. Waterway uses a traditional product costing system to assign overhead costs uniformly to all products. To meet industry safety standards and to assure its customers of safe and durable toys, Waterway assigns its quality-control overhead costs to all products at a rate of 21% of direct labor costs. Its direct labor cost for the month of August for its toddler line of toys is $321,000. In response to repeated requests from its financial vice president, Waterway's management agrees to adopt activity-based costing. Data relating to the toddler line of toys for the month of August are as follows: Activity Cost Pools Materials Inspection Assembly Line Inspection National Toy Association Certification (a) Traditional costing Activity-based costing Compute the quality-control overhead cost to be assigned to the toddler toy line for the month of August (1) using the traditional product costing system (direct labor is the cost driver), and…
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Acoma Co. has identified one of its cost pools to be quality control and has assigned $58,473 to that pool. Number of inspections has been chosen as the cost driver for this pool; Acoma performs 26,700 inspections annually. Suppose Acoma manufactures two products that consume 10,146 (Product 1) and 16,554 (Product 2) inspections each.Assume that Acoma manufacturers only the two products mentioned and they consume 100 percent of the company’s quality inspections. Using activity proportions, determine how much quality control cost will be assigned to each of Acoma’s product lines. I can not figure out the problem above.?
Use the image below to answer the following question. The blue box represents the VAnswer the following question The Lebanese Bakery Inc. also allocates FMOH to products on the basis of standard direct manufacturing labor - hours. For the year, FMOH was budgeted at $4.00 per DMLH. Actual FMOH incurred during the year was $272,000. Baguettes are baked in batches of 100 loaves. Following are some pertinent data for Lebanese Bakery Inc: Direct manufacturing labor use: 2.00 DMLH per batch Fixed manufacturing overhead: $4.00 per DMLH Lebanese Bakery Inc. recorded the following additional data for the year ended December 31: Planned (budgeted) output 3, 840,000 baguettes Actual production 3, 360, 000 baguettes Direct manufacturing labor 50, 400 DMLH Actual fixed MOH $272,000 Question: 1) Why do we use these headings in specific? Explain each heading. 2) How do you know whether the rate variance ($35200 F) and production volume - variance ($38400 U) are favourable or unfavourable? Is there a…
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AAA Manufacturing Firm has provided the following sales, cost and expense figures in relation to expected operations for the coming year. You are tasked to prepare forecast Statements of Financial Performance using flexible budget techniques and incorporating the following information.All units are sold when manufactured due to the highly perishable nature of the company’s product. As such there are no inventories of raw materials, work in process or finished goods on hand.The selling price of the company’s single product is $50.00 and the expected sales quantity for the coming year is in the vicinity of 20,000 and 25,000 units.Required: Prepare an Income Statement budget using flexible budgeting techniques at production and sales levels of:(Scenario a) 20,000 units(Scenario b) 25,000 units Question: 1. Total fixed factory overhead under Scenario A (No dollar sign and comma) 2. Gross profit under Scenario B? (No dollar sign and comma) 3. Total non-manufacturing expenses under…
Dairyplus processes organic milk into plain yogurt. Dairyplus sells plain yogurt to hospitals, nursing homes, and restaurants in bulk, one-gallon containers. Each batch, processed at a cost of $890, yields 540 gallons of plain yogurt. The company sells the one-gallon tubs for $7.00 each and spends $0.16 for each plastic tub. Dairyplus has recently begun to reconsider its strategy. Management wonders if it would be more profitable to sell individual-sized portions of fruited organic yogurt at local food stores. Dairyplus could further process each batch of plain yogurt into 11,520 individual portions (3/4 cup each) of fruited yogurt. A recent market analysis indicates that demand for the product exists. Dairyplus would sell each individual portion for $0.40. Packaging would cost $0.05 per portion, and fruit would cost $0.10 per portion. Fixed costs would not change. Should Dairyplus continue to sell only the gallon-sized plain yogurt (sell as is) or convert the plain yogurt…