Leidenheimer Corporation manufactures small airplane propellers. Sales for year 2 totaled $1,730,000. Information regarding resources for the month follows. Resources Resources Supplied $ 69,000 107,000 100,000 71,000 54,000 Used $ 59,000 107,000 89,000 46,000 42,000 136,000 310,000 110,000 136,000 19,000 108,000 Parts management Energy Quality inspections Long-term labor Short-term 1abor Setups Materials Depreciation Marketing Customer service Administrative 220,000 310, 000 220,000 161,000 44,000 132,000 In addition, Leidenheimer spent $40,500 on 45 engineering changes with a cost-driver rate of $900 and $58,400 on 8 outside contracts with a cost driver rate of $7.300. Required: Management has requested that you do the following: a. Prepare a traditional income statement. b. Prepare an activity-based income statement.

Leidenheimer Corporation manufactures small airplane propellers. Sales for year 2 totaled $1,730,000. Information regarding resources for the month follows. Resources Resources Supplied $ 69,000 107,000 100,000 71,000 54,000 Used $ 59,000 107,000 89,000 46,000 42,000 136,000 310,000 110,000 136,000 19,000 108,000 Parts management Energy Quality inspections Long-term labor Short-term 1abor Setups Materials Depreciation Marketing Customer service Administrative 220,000 310, 000 220,000 161,000 44,000 132,000 In addition, Leidenheimer spent $40,500 on 45 engineering changes with a cost-driver rate of $900 and $58,400 on 8 outside contracts with a cost driver rate of $7.300. Required: Management has requested that you do the following: a. Prepare a traditional income statement. b. Prepare an activity-based income statement.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...

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Air United, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 50 range instruments and 300 pressure gauges were produced, and overhead costs of $94,500 were estimated. An analysis of estimated overhead costs reveals the following activities. Activities Cost Drivers Total Cost 1. Materials handling Number of requisitions $40,000 2. Machine setups Number of setups 21,500 3. Quality inspections Number of inspections 33,000 $94,500 The cost driver volume for each product was as follows. Cost Drivers Instruments Gauges Total Number of requisitions 400 600 1,000 Number of setups 200 300 500 Number of inspections 200 400 600 (a) Determine the overhead rate for each activity. Overhead Rate Materials handling $enter a dollar amount per requisition per requisition Machine setups…
Zeitgeist Company manufactures silicon sleeves for MP3 players. In August of last year, Zeitgeist began producing the colorful sleeves. During the month of August, 16,000 were produced, and 14,750 were sold at $6.95 each. The following costs were incurred: Direct materials $26,880 Direct labor 6,720 Variable overhead 5,920 Fixed overhead 28,160 A selling commission of 8% of sales price was paid. Administrative expenses, all fixed, amounted to $37,890. Required: 1. Calculate the unit cost and the cost of ending inventory under absorption costing. (Round unit cost to the nearest cent and cost of ending inventory to the nearest dollar.) 2. Calculate the unit cost and the cost of ending inventory under variable costing. (Round unit cost to the nearest cent and cost of ending inventory to the nearest dollar.) 3. What is the contribution margin per unit? (Round to the nearest cent.) 4. CONCEPTUAL CONNECTION: Zeitgeist believes that multicolored sleeves will really take off after one year of…
Johnston Company cleans and applies powder coat paint to metal items on a job-order basis. Johnston has budgeted the following amounts for various overhead categories in thecoming year. Supplies $216,000Gas 50,000Indirect labor 176,000Supervision 73,500Depreciation on equipment 47,000Depreciation on the building 40,000Rental of special equipment 11,000Electricity (for lighting, heating, and air conditioning) 28,900Telephone 4,300Landscaping service 1,200Other overhead 50,000 In the coming year, Johnston expects to powder coat 120,000 units. Each unit takes 1.3direct labor hours. Johnston has found that supplies and gas (used to run the drying ovens—all units pass through the drying ovens after powder coat paint is applied) tend to vary with thenumber of units produced. All other overhead categories are considered to be fixed. (Round all overhead rates to the nearest cent.)Required: 1. Calculate the number of direct labor hours Johnston must budget for the coming year. Cal-culate the…
The cost formula for the maintenance department of Rainbow Ltd. is $19,400 per month plus $7.70 per machine hour used by the production department.Required:a. Calculate the maintenance cost that would be budgeted for a month in which 6,700 machine hours are planned to be used. b. Prepare an appropriate performance report for the maintenance department assuming that 7,060 machine hours were actually used in the month of May and that the total maintenance cost incurred was $68,940. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
ACC Inc is working on calculating cost information for September. The beginning and ending inventories for the month of September are: 1-Sep 9/31/2023 Direct Materials $82,000 $77,000 Work in Process $121,000 $135,000 Finished Goods $58,000 $45,000 Production data for the month of September follows: Direct labor $175,500 Manufacturing overhead $185,500 Direct materials purchased $153,000 Using the above information answer the following questions: 1. What was the amount of direct materials added to production during the month? 2. What was the total amount of manufacturing cost added to production during the month? 3. What was the amount of cost of goods manufactured? 4. What was the amount of cost of goods sold?
Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below: Direct materials Direct labor Standard Quantity or Hours Standard Price or Rate 6.90 pounds $ 2.60 per pound 0.30 hours $ 7.00 per hour Standard Cost $ 17.94 $ 2.10 During the most recent month, the following activity was recorded: a. Nineteen thousand two hundred and fifity pounds of material were purchased at a cost of $2.40 per pound. b. All of the material purchased was used to produce 2,500 units of Zoom. c. 450 hours of direct labor time were recorded at a total labor cost of $4,500. Required: 1. Compute the materials price and quantity variances for the month. 2. Compute the labor rate and efficiency variances for the month. (For all requirements, Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Round…
Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Refer to Exercise 2.21. Last calendar year, Ellerson recognized revenue of 1,312,000 and had selling and administrative expenses of 204,600. Required: 1. What is the cost of goods sold for last year? 2. Prepare an income statement for Ellerson for last year.
A company estimates its manufacturing overhead will be $840,000 for the next year. What is the predetermined overhead rate given each of the following Independent allocation bases? Budgeted direct labor hours: 90,615 Budgeted direct labor expense: $750000 Estimated machine hours: 150,000
Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Required: 1. Calculate the total cost of direct materials used in production. 2. Calculate the cost of goods manufactured. Calculate the unit manufacturing cost. 3. Of the unit manufacturing cost calculated in Requirement 2, 2.70 is direct materials and 5.30 is overhead. What is the prime cost per unit? Conversion cost per unit?
Zippy Inc. manufactures a fuel additive, Surge, which has a stable selling price of 44 per drum. The company has been producing and selling 80,000 drums per month. In connection with your examination of Zippys financial statements for the year ended September 30, management has asked you to review some computations made by Zippys cost accountant. Your working papers disclose the following about the companys operations: Standard costs per drum of product manufactured: Materials: Costs and expenses during September: Chemicals: 645,000 gallons purchased at a cost of 1,140,000; 600,000 gallons used. Empty drums: 94,000 purchased at a cost of 94,000; 80,000 drums used. Direct labor: 81,000 hours worked at a cost of 816,480. Factory overhead: 768,000. Required: Calculate the following for September, using the formulas on pages 421422 and 424 (Round unit costs to the nearest whole cent and compute the materials variances for both Surge and for the drums.): 1. Materials quantity variance. 2. Materials purchase price variance. 3. Labor efficiency variance. 4. Labor rate variance.
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Baldwin Printing Company uses a job order cost system and applies overhead based on machine hours. A total of 150,000 machine hours have been budgeted for the year. During the year, an order for 1,000 units was completed and incurred the following: The accountant computed the inventory cost of this order to be 4.30 per unit. The annual budgeted overhead in dollars was: a. 577,500. b. 600,000. c. 645,000. d. 660,000.