Jamesway Corporation makes two types of replacement fittings for heavy construction equipment-screws and bolts. Dat the two products follow: Screws Bolts Direct Labour- Hours per Unit Annual Production 0.20 0.10 Additional information about the company follows: 40,000 units 60,000 units a. Screws require $8.70 in direct materials per unit, and bolts require $6.70. b. The direct labour wage rate is $20 per hour. c. Screws are more complex to manufacture than bolts, and they require special equipment. d. The ABC system has the following activity cost pools: Activity Cost Pool. Machine setups Special processing General factory Activity Cost Pool Machine setups Activity Measure. Number of setups Machine-hours Direct labour-hours. Required: 1. Compute the activity rate for each activity cost pool. Activity Rate per setup Estimated Overhead Cost Screws $ 26,400 $216,000 $504,000 80 4,000 7,000 Activity Bolts 40 0 14,000 Total 120 4,000 21,000
Jamesway Corporation makes two types of replacement fittings for heavy construction equipment-screws and bolts. Dat the two products follow: Screws Bolts Direct Labour- Hours per Unit Annual Production 0.20 0.10 Additional information about the company follows: 40,000 units 60,000 units a. Screws require $8.70 in direct materials per unit, and bolts require $6.70. b. The direct labour wage rate is $20 per hour. c. Screws are more complex to manufacture than bolts, and they require special equipment. d. The ABC system has the following activity cost pools: Activity Cost Pool. Machine setups Special processing General factory Activity Cost Pool Machine setups Activity Measure. Number of setups Machine-hours Direct labour-hours. Required: 1. Compute the activity rate for each activity cost pool. Activity Rate per setup Estimated Overhead Cost Screws $ 26,400 $216,000 $504,000 80 4,000 7,000 Activity Bolts 40 0 14,000 Total 120 4,000 21,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![Jamesway Corporation makes two types of replacement fittings for heavy construction equipment-screws and bolts. Data regarding
the two products follow:
Screws
Bolts
Direct Labour-
Hours per Unit Annual Production
40,000 units
60,000 units
Additional information about the company follows:
a. Screws require $8.70 in direct materials per unit, and bolts require $6.70.
b. The direct labour wage rate is $20 per hour.
c. Screws are more complex to manufacture than bolts, and they require special equipment.
d. The ABC system has the following activity cost pools:
0.20
0.10
Activity Cost Pool
Machine setups
Special processing
General factory
Activity Cost Pool
Required:
1. Compute the activity rate for each activity cost pool.
Machine setups
Special processing
General factory
Activity Measure.
Number of setups
Machine-hours
Direct labour-hours
Activity Rate
per setup
per MH
per DLH
Estimated
Overhead Cost Screws
$ 26,400
$216,000
$504,000
Activity
Bolts
80
4,000
7,000 14,000
40
0
Total
120
4,000
21,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc77914f9-784a-459e-8477-a7310324facc%2F14b81438-daef-4fec-852c-0975415e8768%2Fwxmhone_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Jamesway Corporation makes two types of replacement fittings for heavy construction equipment-screws and bolts. Data regarding
the two products follow:
Screws
Bolts
Direct Labour-
Hours per Unit Annual Production
40,000 units
60,000 units
Additional information about the company follows:
a. Screws require $8.70 in direct materials per unit, and bolts require $6.70.
b. The direct labour wage rate is $20 per hour.
c. Screws are more complex to manufacture than bolts, and they require special equipment.
d. The ABC system has the following activity cost pools:
0.20
0.10
Activity Cost Pool
Machine setups
Special processing
General factory
Activity Cost Pool
Required:
1. Compute the activity rate for each activity cost pool.
Machine setups
Special processing
General factory
Activity Measure.
Number of setups
Machine-hours
Direct labour-hours
Activity Rate
per setup
per MH
per DLH
Estimated
Overhead Cost Screws
$ 26,400
$216,000
$504,000
Activity
Bolts
80
4,000
7,000 14,000
40
0
Total
120
4,000
21,000
![2. Determine the unit cost of each product according to the ABC system, including direct materials and direct labour. (Round your
answers to 2 decimal places.)
Direct materials
Direct labour
Overhead
Unit cost
Screws
Bolts](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc77914f9-784a-459e-8477-a7310324facc%2F14b81438-daef-4fec-852c-0975415e8768%2Fnxp9oqj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:2. Determine the unit cost of each product according to the ABC system, including direct materials and direct labour. (Round your
answers to 2 decimal places.)
Direct materials
Direct labour
Overhead
Unit cost
Screws
Bolts
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