Hochberg Corporation uses an activity-based costing system with the following three activity cost pools:Activity Cost Pool Total ActivityFabrication30,000 machine-hoursOrder processing 300 ordersOtherNot applicableThe Other activity cost pool is used to accumulate costs of idle capacity and organization-sustaining costs. The company has provided thefollowing data concerning its costs:Wages and salaries $340,000DepreciationOccupancyTotal160,000220,000$720,000The distribution of resource consumption across activity cost pools is given below:Activity Cost PoolsFabrication Order Processing Other TotalWages and salaries 30%60%10% 100%Depreciation15%50%35% 100%Occupancy15%55%30% 100%The activity rate for the Fabrication activity cost pool is:A) $5.30 per machine-hourB) $3.60 per machine-hourC) $7.20 per machine-hourD) $4.80 per machine-hour

Correct option:A) $5.30 per machine-hour Show formula version of the detailed solution sheet for a…

Answered: Hochberg Corporation uses an…

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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Weldon Corporation has provided the following data from its activity-based costing accounting system: Indirect factory wages Factory equipment depreciation Distribution of Resource Consumption across Activity Cost Pools: $ 340,000 $ 240,000 Customer Orders 25% 40% Product Processing 65% 40% Activity Cost Pools Indirect factory wages Factory equipment depreciation The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs that are not assigned to products. How much indirect factory wages and factory equipment depreciation cost would NOT be assigned to products using the activity-based costing system? Other 10% 20% Total 100% 100%
Thornton Corporation's computer services department assists two operating departments in using the company's information system effectively. The annual cost of computer services is $626,200. The production department employs 37 employees, and the sales department employs 25 employees. Thornton uses the number of employees as the cost driver for allocating the cost of computer services to operating departments. Required Allocate the cost of computer services to operating departments. Department Allocated Cost Production Sales
Required information Dierich Company uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity-based costing system: Costs: Manufacturing overhead Selling and administrative expenses Total Distribution of Resource Consumption: Manufacturing overhead Selling and administrative expenses Order Size 15% 60% Activity Cost Pools Other Customer Support 75% 20% 10% 20% $600,000 220.000 $820,000 Total 100% 100% D The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. You have been asked to complete the first-stage allocation of costs to the activity cost pools.
A company has provided the following data from its activity-based costing accounting system: Indirect factory wages $552,000 Factory equipment depreciation $332,000 Distribution of Resource Consumption across Activity Cost Pools: 14 Activity Cost Pools Customer Product Orders Processing Other Total Indirect factory wages 55% 35% 10% 100% Factory equipment depreciation 30% 50% 20% 100% The "Other" activity cost pool consists of the costs of idle capacity and organization- sustaining costs, How much indirect factory wages and factory equipment depreciation cost would NOT be assigned to products using the activity-based costing system? Multiple Choice $552,000 $332.000 $121,600 $0
Valron Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly. Support Departments Producing Departments HumanResources GeneralFactory Fabricating Assembly Direct costs $185,000 $310,000 $114,200 $91,000 Normal activity: Number of employees — 50 80 150 Square footage 1,100 — 5,400 13,700 Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Now assume that Valron Company uses the sequential method to allocate support department costs. The support departments are ranked in order of highest cost to lowest cost. Required: 1. Calculate the allocation ratios (rounded to four significant digits) for the four departments using the sequential method. If an amount is zero, enter "0". Use the rounded values for subsequent calculations.…
Costs incurred in the main headquarters are as follows: Human resources (HR) costs $2,300,000 Accounting department costs 1,800,000 Rent and depreciation 640,000 Other 660,000 Total costs $5,400,000 The Ford upper management currently allocates this cost to the divisions equally. One of the division managers has done some research on activity-based costing and proposes the use of different allocation bases for the different indirect costs−number of employees for HR costs, total revenues for accounting department costs, square feet of space for rent and depreciation costs, and equal allocation among the divisions of "other" costs. Information about the three divisions follows: Bread Cake Doughnuts Total revenues $21,200,000 $4,700,000 $13,200,000 Direct costs 14,000,000 3,300,000 7,000,000 Segment margin $7,200,000 $1,400,000 $6,200,000 Number of employees 700 200 100 Square feet…
Gutknecht Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity-based costing system: Costs: Wages and salaries Depreciation Utilities Total Distribution of resource consumption: $ 300,000 180,000 240,000 $ 720,000 Wages and salaries Depreciation Utilities Activity Cost Pools Assembly 35% Setting Up Other Total 40% 25% 100% 5% 10% 60% 35% 100% 60% 30% 100% How much cost, in total, would be allocated in the first-stage allocation to the Other activity cost pool? O Multiple Choice $180,000 $216,000 $210,000 $138,000
A
Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Activity Rates Supporting direct labor $ 8 per direct labor-hour Machine processing $ 4 per machine - hour Machine setups $ 40 per setup Production orders $ 150 per order Shipments $ 120 per shipment Product sustaining $ 900 per product Activity data have been supplied for the following two products: Total Expected Activity K425 -M67 Number of units produced per year 200 2,000 Direct labor-hours 925 40 Machine - hours 2, 600 30 Machine setups 11 1 Production orders 11 1 Shipments 22 1 Product sustaining 1 1
Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Machine processing Machine setups Activity Rate $7 per direct labor-hour $4 per machine-hour $ 45 per setup Production orders. $ 160 per order Shipments $ 130 per shipment Product sustaining $ 900 per product Activity data have been supplied for the following two products: Number of units produced per year Direct labor-hours Machine-hours Machine setups Production orders Shipments Product sustaining Activity Cost Pool Supporting direct labor Machine processing Machine setups Production orders Shipments Product sustaining Total overhead cost $ K425 Total Expected Activity K425 M67 2,000 0 $ 200 1,000 3,000 5 5 Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system? M67 10 1 30 20 1 1 0 1 1
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Eccles Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity based costing system: Costs: Wages and salaries $ 349,000 Depreciation 290,000 Utilities 199,000 Total $ 838,000 Distribution of resource consumption: Activity Cost Pools Total Assembly Setting Up Other Wages and salaries 65% 20% 15% 100% Depreciation 35% 20% 45% 100% Utilities 15% 75% 10% 100% How much cost, in total, would be allocated in the first-stage allocation to the Assembly activity cost pool? Multiple Choice $125,700 $544,700 $345,533 $358,200

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