Hosmer Industries provides the following information about resources and usage:Unused ResourcesCapacityCost DriverVolumeResources usedMaterialsPowerSetupsPurchasing$ 4,800$ 3,744$ 1,800$ 4,320Client assistance $18,240$ 8,160$ 6,7206,4002726264$ 235,200$ 42,912$ 57,600$ 50,400$ 37,440$ 69,600$ 67,200402563,360SupervisionFacility costResourcessuppliedMaterialsPowerSetupsPurchasingClient assistanceSupervisionFacility costSales revenue for Hosmer Industries is $720,000.Required:Prepare a traditional income statement.Prepare an activity-based income statement.poundshourssetupspurchaseordersinquirieslabor-hourssquare meters

The income statement is the statement under which all the revenue and expenses are reported for a…

Hosmer Industries provides the following information about resources and usage: Unused Resources Capacity Cost Driver Volume Resources used Materials Power Setups Purchasing Client assistance Supervision Facility cost Resources supplied Materials Power Setups Purchasing Client assistance Supervision Facility cost $ 4,800 $ 3,744 $ 1,800 $ 4,320 $ 18,240 $ 8,160 $ 6,720 $ 235,200 $ 42,912 $ 57,600 $ 50,400 $ 37,440 $ 69,600 $ 67,200 6,400 272 62 64 40 256 3,360 Sales revenue for Hosmer Industries is $720,000. Required: Prepare a traditional income statement. Prepare an activity-based income statement. pounds hours setups purchase orders inquiries labor-hours square meters

Hosmer Industries provides the following information about resources and usage: Unused Resources Capacity Cost Driver Volume Resources used Materials Power Setups Purchasing Client assistance Supervision Facility cost Resources supplied Materials Power Setups Purchasing Client assistance Supervision Facility cost $ 4,800 $ 3,744 $ 1,800 $ 4,320 $ 18,240 $ 8,160 $ 6,720 $ 235,200 $ 42,912 $ 57,600 $ 50,400 $ 37,440 $ 69,600 $ 67,200 6,400 272 62 64 40 256 3,360 Sales revenue for Hosmer Industries is $720,000. Required: Prepare a traditional income statement. Prepare an activity-based income statement. pounds hours setups purchase orders inquiries labor-hours square meters

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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ABC Company has an ABC system with three pools: Total cost in cost pool Activity Machine setups Customer service Maintenance $18,500 $5,000 Cost Driver $29,000 #setups O $9,000 #orders not enough information machine- hours $13,000 $6,000 $10,000 Compute total capacity costs allocated to product X. Activity volume (#cost driver units) Product X Product Y Total 45 15 25 20 5 25 65 20 50
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Please Answer part 4. Part 1-3 answers Part 1 Computation of Cost Allocation Rate for each activity: Activity Costs Base usage Allocation rate Material Handling 160,000 20,000 8 Packaging 390,000 2,000 195 Quality Assurance 112,000 1,600 70 Total 662,000 Part 2 Activity Usage of All Activities: Activity Commercial Travel Total Material Handling 8700 4450 13,150 Packaging 900 300 1,200 Quality Assurance 270 370 640 Allocation of Cost basis Usage: Activity Commercial Travel Material Handling 69,600 35600 (Activity Usage * Cost Allocation Rate) (8,700 * 8) (4450 * 8) Packaging 175,500 58500 Quality Assurance 18,900 25900 Total 264,000 120000 Units Produced 3,000 20000 Cost Per Unit 88 6 Part 3 Particulars Commercial Travel Usage of…
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Berkeley Bank reports the following information about resources in two functions. Cost Driver Rate $ 0.01 per transaction $ 250 per account Resources used Process transactions Process accounts Resources supplied Process transactions Process accounts $675,000 $360,000 Required: Compute unused resource capacity at Berkeley Bank. Process transactions Process accounts Unused Resource Capacity Cost Driver Volume 40,000,000 transactions 950 accounts
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Station 9 ¾ Corporation manufacturers railroad tracks. They are currently using a traditional system, with machine hours as the cost driver. They are considering converting to an ABC system, and want a comparison of the two. Station 9 ¾ has identified the following activity information: Activity Cost Driver Est. Cost Driver Volume Est. Cost Pool Machining Machine Hours 12,000 $119,000 Assembly Direct Labor Hours 15,800 $107,000 Setup Number of Setups 9 $24,300 Total $250,300 The actual cost driver volume that occurred during the production process is below: Machine Hours 8,600 Direct Labor Hours 9,700 Number of Setups 7 What is the Difference between traditional and ABC system?