Johnston Corp. manufactures computer desks in its Syracuse, New York, plant. The company uses activity-based costing to allocate all manufacturing conversion costs (direct labor and manufacturing overhead). Its activities and related data follow Click the icon to view the activity areas and related data) Read the requirements Requirement 1. Compute the per-unit manufacturing product cost of Standard desks and Unpainted desks. (Complete all input fields. Enter a "0" for any zero amounts. Round your answers to the nearest whole dollar) Standard Desk Unpainted Desk Direct materials Materials handling Assembling Painting Total manufacturing cost Number of units Manufacturing cost per unit Requirement 2. Premanufacturing activities, such as product design, were assigned to the Standard desks at $5 each and to the Unpainted desks at $3 each. Similar analyses were conducted of post-manufacturing activities such as distribution, marketing, and customer service. The post-manufacturing costs were $20 per Standard and $19 per Unpainted desk Compute the full product costs per desk Standard Desk Unpainted Desk Full product cost per unit Requirement 3. Which product costs are reported in the external financial statements? Which costs are used for management decision making? Explain the difference are reported in the financial statements. Managers use However, these costs often are ▼ Requirement 4. What price should Johnston's managers set for Standard desks to earn a $39 profit per desk? for decisions such as pricing and product emphasis. Full product costs include the that are expensed as incurred for external reporting.
Johnston Corp. manufactures computer desks in its Syracuse, New York, plant. The company uses activity-based costing to allocate all manufacturing conversion costs (direct labor and manufacturing overhead). Its activities and related data follow Click the icon to view the activity areas and related data) Read the requirements Requirement 1. Compute the per-unit manufacturing product cost of Standard desks and Unpainted desks. (Complete all input fields. Enter a "0" for any zero amounts. Round your answers to the nearest whole dollar) Standard Desk Unpainted Desk Direct materials Materials handling Assembling Painting Total manufacturing cost Number of units Manufacturing cost per unit Requirement 2. Premanufacturing activities, such as product design, were assigned to the Standard desks at $5 each and to the Unpainted desks at $3 each. Similar analyses were conducted of post-manufacturing activities such as distribution, marketing, and customer service. The post-manufacturing costs were $20 per Standard and $19 per Unpainted desk Compute the full product costs per desk Standard Desk Unpainted Desk Full product cost per unit Requirement 3. Which product costs are reported in the external financial statements? Which costs are used for management decision making? Explain the difference are reported in the financial statements. Managers use However, these costs often are ▼ Requirement 4. What price should Johnston's managers set for Standard desks to earn a $39 profit per desk? for decisions such as pricing and product emphasis. Full product costs include the that are expensed as incurred for external reporting.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Topic Video
Question
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1.
|
Compute the per-unit manufacturing product cost of Standard desks and Unpainted desks.
|
|
2.
|
Premanufacturing activities, such as product design, were assigned to the Standard desks at
$5
each and to the Unpainted desks at
$3
each. Similar analyses were conducted of post-manufacturing activities, such as distribution, marketing, and customer service. The post-$20
per Standard and
$19
per Unpainted desk. Compute the full product costs per desk. |
|
3.
|
Which product costs are reported in the external financial statements? Which costs are used for management decision making? Explain the difference.
|
|
4.
|
What price should
Johnston's
managers set for Standard desks to earn a
$39
profit per desk? |
Transcribed Image Text:Johnston Corp. manufactures computer desks in its Syracuse, New York, plant. The company uses activity-based costing to allocate all manufacturing conversion costs (direct labor and manufacturing overhead). Its activities and related data follow.
(Click the icon to view the activity areas and related data.)
Read the requirements.
Requirement 1. Compute the per-unit manufacturing product cost of Standard desks and Unpainted desks. (Complete all input fields. Enter a "0" for any zero amounts. Round your answers to the nearest whole dollar.)
Standard Desk
Unpainted Desk
Direct materials
Materials handling
Assembling
Painting
Total manufacturing cost
Number of units
Manufacturing cost per unit
Requirement 2. Premanufacturing activities, such as product design, were assigned to the Standard desks at $5 each and to the Unpainted desks at $3 each. Similar analyses were conducted of post-manufacturing activities such distribution, marketing, and customer service. The post-manufacturing costs were $20
per Standard and $19 per Unpainted desk. Compute the full product costs per desk.
Standard Desk
Unpainted Desk
Full product cost per unit
Requirement 3. Which product costs are reported in the external financial statements? Which costs are used for management decision making? Explain the difference.
are reported in the financial statements. Managers use
V
Requirement 4. What price should Johnston's managers set for Standard desks to earn a $39 profit per desk?
However, these costs often are
for decisions such as pricing and product emphasis. Full product costs include the
▼that are expensed as incurred for external reporting.
Transcribed Image Text:Johnston Corp. manufactures computer desks in its Syracuse, New York, plant. The company uses activity-based costing to allocate all manufacturing conversion costs (direct labor and manufacturing overhead). Its activities and related data follow.
EEE (Click the icon to view the activity areas and related data.)
Read the requirements.
Materials handling
Assembling
Painting
Total manufacturing cost
Number of units
Manufacturing cost per unit
Requirement 2. Premanufacturing activities, such as product design, were assigned to the Standard desks at $5 each and to the Un
per Standard and $19 per Unpainted desk. Compute the full product costs per desk.
Standard Desk
Unpainted Desk
Full product cost per unit
Requirement 3. Which product costs are reported in the external financial statements? Which costs are used for management decisi
are reported in the financial statements. Managers use
However, these costs often are
V.
Requirement 4. What price should Johnston's managers set for Standard desks to earn a $39 profit per desk?
Sales price per unit - standard desk
for decisions s
(H)
Data table
Budgeted Cost
of Activity
Activity
Materials handling ... $
Assembling
Painting.
$
$
Product
Standard desk ...
Unpainted desk
Allocation Base
300,000 Number of parts
$
2,500,000 Direct labor hours
$
190,000 Number of painted desks $
0.60
14.00
4.90
Johnston produced two styles of desks in March: the Standard desk and Unpainted desk. Data for
each follow:
Total
Units Total Direct
Produced Materials Costs
6,000 $
2,500 $
$
Print
114,000
39,900
Cost Allocation
Rate
Total Number
of Parts
121,000
31,000
Done
Total Assembling
Direct Labor Hours
6,000
1,000
ng, and customer service. The post-manufacturing costs were $20
that are expensed as incurred for external reporting.
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