Liberty Manufacturing has provided the following data from its activity-based costing system: Activity Cost Pool Total Cost Total Activity Quality inspection Material handling $245,700 8,190 inspection hours $86,450 3,458 material moves Machine maintenance $119,520 5,520 maintenance hours The activity rate for the "quality inspection" activity cost pool is

Liberty Manufacturing has provided the following data from its activity-based costing system: Activity Cost Pool Total Cost Total Activity Quality inspection Material handling $245,700 8,190 inspection hours $86,450 3,458 material moves Machine maintenance $119,520 5,520 maintenance hours The activity rate for the "quality inspection" activity cost pool is

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 8EA: Rex Industries has identified three different activities as cost drivers: machine setups, machine...

See similar textbooks

Similar questions

Rocks Industries has identified three different activities as cost drivers: machine setups, machine hours, and inspections. The overhead and estimated usage are: Compute the overhead rate for each activity.
Activity cost pools, activity rates, and product costs using activity-based costing Caldwell Home Appliances Inc. is estimating the activity cost associated with producing ovens and refrigerators. The indirect labor can be traced into four separate activity pools, based on time records provided by the employees. The budgeted activity cost and activity-base information are provided as follows: The estimated activity-base usage and unit information for two product lines was determined as follows: A. Determine the activity rate for each activity cost pool. B. Determine the activity-based cost per unit of each product.
Sanford, Inc., has developed value-added standards for four activities: purchasing parts, receiving parts, moving parts, and setting up equipment. The activities, the activity drivers, the standard and actual quantities, and the price standards for 20x1 are as follows: The actual prices paid per unit of each activity driver were equal to the standard prices. Required: 1. Prepare a cost report that lists the value-added, non-value-added, and actual costs for each activity. 2. Which activities are non-value-added? Explain why. Also, explain why value-added activities can have non-value-added costs.
Overhead costs are assigned to each product based on __________________. A. the proportion of that products use of the cost driver B. a predetermined overhead rate for a single cost driver C. price of the product D. machine hours per product
Provide the following based on the procedures of Activity-Based Costing (ABC) system. A. Pool rates B. Overhead cost allocated to each product of DGM Marble Manufacturing
Doede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts-equipment depreciation and supervisory expense-to three activity cost pools-Machining. Order Filing, and Other-based on resource consumption, Data to perform these allocations appear below: Overhead costs: Equipment depreciation Supervisory expense $ 30,000 $ 14,800 Distribution of Resource Consumption Across Activity Cost Pools: Equipment depreciation Supervisory expense Activity: Product W1 Product Me Total Machining Order Filling 0.50 0.50 In the second stage, Machining costs are assigned to products using machine-hours (Ms) and Order Filing costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Product W1 Product Me Total Activity Cost Pools MHS (Machining) 5,530 17,000 22,530 0.40 0.30 Show Transcribed Text 5,530 17,000 22,530 Orders (Order Filling)…
Draus Products Company uses activity-based costing to compute product costs for external reports. The company has three activity cost pools and applies overhead using predetermined overhead rates for each activity cost pool. Estimated costs and activities for the current year are presented below for the three activity cost pools. estimated overhead expected activity activity#1 $60,048 4800 activity#2 $58,656 2400 activity#3 $130,324 4400 Actual costs and activities for the current year were as follows. actual overhead cost actual activity acrivity#1 $59,798 4830 activity#2 $58,476 2370 activity#3 $130,234 4450 The total amount of overhead applied during the year was closest to: 1. $248,508 2. $248,988 3. $250,155 4. $251,334
TCM Company uses activity-based costing to determine products costs for external financial reports. The company has provided the following data concerning its activity-based costing system: Activity cost pools (and activity measures) Depreciation (allocated based on machine-hours) Batch setup (allocated based on # of set ups) General Factory (allocated based on direct labor hours) Estimated Overhead costs $67,500 273,700 204,000 Expected Activity (Allocation base) Product y Product x Activity Cost pool Depreciation Batch setup General factory The activity rate for the general factory activity cost pool is? Total 5000 m hours 4000 1000 7000 set ups 3000 4000 8000 dl hours 1000 7000
Custom's has three cost pools and an associated cost driver to allocate the costs to the product. The cost pools, cost driver, estimated overhead, and estimated activity for the cost pool are: Cost Pool Material Machining Inspection • Material cost pool . Material requisitions Machine hours Number of inspections • Machining cost pool Custom's data Cost Driver Inspection cost pool Estimated Activity per Driver 14,000 186,400 10,000 Estimated Overhead What is the predetermined overhead rate for each activity? Round to the nearest penny, two decimal places. $52,500 363,500 75,000
Draus Products Company uses activity-based costing to compute product costs for external reports. The company has three activity cost pools and applies overhead using predetermined overhead rates for each activity cost pool. Estimated costs and activities for the current year are presented below for the three activity cost pools. Estimated Overhead Cost Expected Activity Activity #1 $60,048 4,800 Activity #2 $58,656 2,400 Activity #3 $130,324 4,400 Actual costs and activities for the current year were as follows. Actual Overhead Cost Actual Activity Activity #1 $59,798 4,830 Activity #2 $58,476 2,370 Activity #3 $130,234 4,450 The total amount of the debits to the manufacturing overhead during the year was closest to: $248,508. $248,988. $250,334. $251,110.
Custom's has three cost pools and an associated cost driver to allocate the costs to the product. The cost pools, cost driver, estimated overhead, and estimated activity for the cost pool are as follows: Cost Pool Cost Driver EstimatedActivityper Driver EstimatedOverhead Material Material Requisitions 12,000 $44,400 Machining Machine Hours 186,600 373,200 Inspection Number of Inspections 9,000 65,700 What is the predetermined overhead rate for each activity? Round your answers to two decimal places. Cost Pool PredeterminedOverhead Rate Material $fill in the blank 1 per requisition Machining $fill in the blank 2 per machine hour Inspection $fill in the blank 3 per inspection
Maxx Inc. has provided the following data from its activity-based costing system:Activity Cost Pools Total Cost Total ActivityDesigning products $383,900 6,580 product design hoursSetting up batches $52,678 7366 batch set-upsAssembling products $25,122 4,018 assembly hoursThe activity rate for the “designing products” activity cost pool is: