Provide correct Answer Karla's bakery uses activity-based costing. Karlahas several activities that she tracks:Dollars ActivityMixing $8,900 350 mixing hoursBaking$7,400 950 baked goodsPackaging $4,500 450 ordersWhat cost would Karla estimate for 1 order of 3bakes goods if she estimates that it will take 5mixing hours?

Concept of Activity-Based Costing (ABC)Activity-Based Costing (ABC) is a cost allocation method that…

Answered: Karla's bakery uses activity-based…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 21E: Sweet Dreams Bakery was started five years ago by Della Fontera who was known for her breads, sweet...

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Activity-based costing: selling and administrative expenses Jungle Junior Company manufactures and sells outdoor play equipment. Jungle Junior uses activity-based costing to determine the cost of the sales order processing and the customer return activity. The sales order processing activity has an activity rate of 20 per sales order, and the customer return activity has an activity rate of 100 per return. Jungle Junior sold 2,500 swing sets, which consisted of 750 orders and 80 returns. Determine (A) the total and (B) the per-unit sales order processing and customer return activity cost for swing sets.
The Chocolate Baker specializes in chocolate baked goods. The firm has long assessed the profitability of a product line by comparing revenues to the cost of goods sold. However, Barry White, the firms new accountant, wants to use an activity-based costing system that takes into consideration the cost of the delivery person. Following are activity and cost information relating to two of Chocolate Bakers major products: Using activity-based costing, which of the following statements is correct? a. The muffins are 2,000 more profitable. b. The cheesecakes are 75 more profitable. c. The muffins are 1,925 more profitable. d. The muffins have a higher profitability as a percentage of sales and, therefore, are more advantageous.
Salley is developing material and labor standards for her company. She finds that it costs $0.55 per pound of material per widget. Each widget requires 6 pounds of material per widget. Salley is also working with the operations manager to determine what the standard labor cost is for a widget. Upon observation, Salley notes that it takes 3 hours in the assembly department and 1 hour in the finishing department to complete one widget. All employees are paid $10.50 per hour. A. What is the standard materials cost per unit for a widget? 8. What is the standard labor cost per unit for a widget?
Figure Four is a distributor of pharmaceutical products. Its activity-based costing system has five activity areas: Activity Area Cost Driver and Rate Order processing $40 per order Line item ordering $3 per line item Store deliveries $50 per store delivery Carton deliveries $1 per carton Shelf-stocking $16 per stocking-hour Rick Flair, the controller of Figure Four, wants to use this activity-based costing system to examine individual customer profitability within each distribution market. Two customers are used to exemplify the insights available with the activity-based costing approach. Data pertaining to these two customers in August are as follows: Charleston Pharmacy Chapel Hill Pharmacy Total orders 12 10 Average line items per order 10 18 Total store deliveries 6 10 Average cartons shipped per store delivery 24 20 Average hours of shelf-stocking per store delivery 0 0.5 Average…
Marvin's Kitchen Supply delivers restaurant supplies throughout the city. The firm adds 10 percent to the cost of the supplies to cover the delivery cost. The delivery fee is meant to cover the cost of delivery. A consultant has analyzed the delivery service using activity- based costing methods and identified four activities. Data on these activities follow. Activity Processing order Loading truck Delivering merchandise Processing invoice Total overhead Order value Number of orders Number of items Number of invoices Cost Driver Number of orders Number of items Number of orders Number of invoices Two of Marvin's customers are City Diner and Le Chien Chaud. Data for orders and deliveries to these two customers follow. City Diner Le Chien Chaud $75,000 $90,000 110 1,500 150 Required A Cost Driver Volume 52 600 12 Cost $ 75,000 150,000 90,000 72,000 $387,000 Required B City Diner Le Chien Chaud Driver Volume 5,000 orders 100,000 items Required: a. What would the delivery charge for each…

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