M40.eth help 450 000. కాి direct la bor cost 200% of dırect laber cost Per Tedel adutes B) Activity rake C A/B per machine hour 2000+200e.. Smithson, Inc. produces two types of gas grills: a family model and a deluxe model. Smithson's controller has decided to use a plantwide overhead rate based on direct labor costs. The president of the company recently heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company's operations: c00+800)! Family Model $75,000 2,000 200 Deluxe Model $150,000 2,000 Direct labor costs Machine hours Setup hours 800 Total estimated overhead costs are $450,000. Overhead cost allocated to the machining activity cost pool is $270,000 and $180,000 is allocated to the machine setup activity cost pool. 450000-6 4500 ల Instructions (a) (b) (c) (d) 150 Compute the overhead rate using the traditional (plantwide) approach. Compute the overhead rates using the activity-based costing approach. Determine the difference in allocation between the two approaches. Smithson, Inc. decided to implement the activity-based costing approach and was quite successful in its use. However, the controller is wondering if instead of only two activity cost pools, they should expand to three activity cost pools based on the following: Family Model $75,000 2,000 200 Deluxe Model $150,000 2,000 Direct labor costs 240000 4000- 1000-170,000 ( 125-40000 Machine hours Setup hours Packaging hours 800 50 75 The estimated overhead of $450,000 is allocated as follows: machining activity cost pool $240,000, machine set up $170,000 and packaging $40,000. (1) Determine the overhead rates using the activity-based costing approach with three cost pools. Determine the overhead allocation for the family model and the deluxe model using three activity cost pools. What is the difference in allocation between two (2)
M40.eth help 450 000. కాి direct la bor cost 200% of dırect laber cost Per Tedel adutes B) Activity rake C A/B per machine hour 2000+200e.. Smithson, Inc. produces two types of gas grills: a family model and a deluxe model. Smithson's controller has decided to use a plantwide overhead rate based on direct labor costs. The president of the company recently heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company's operations: c00+800)! Family Model $75,000 2,000 200 Deluxe Model $150,000 2,000 Direct labor costs Machine hours Setup hours 800 Total estimated overhead costs are $450,000. Overhead cost allocated to the machining activity cost pool is $270,000 and $180,000 is allocated to the machine setup activity cost pool. 450000-6 4500 ల Instructions (a) (b) (c) (d) 150 Compute the overhead rate using the traditional (plantwide) approach. Compute the overhead rates using the activity-based costing approach. Determine the difference in allocation between the two approaches. Smithson, Inc. decided to implement the activity-based costing approach and was quite successful in its use. However, the controller is wondering if instead of only two activity cost pools, they should expand to three activity cost pools based on the following: Family Model $75,000 2,000 200 Deluxe Model $150,000 2,000 Direct labor costs 240000 4000- 1000-170,000 ( 125-40000 Machine hours Setup hours Packaging hours 800 50 75 The estimated overhead of $450,000 is allocated as follows: machining activity cost pool $240,000, machine set up $170,000 and packaging $40,000. (1) Determine the overhead rates using the activity-based costing approach with three cost pools. Determine the overhead allocation for the family model and the deluxe model using three activity cost pools. What is the difference in allocation between two (2)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
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Transcribed Image Text:M40.eth help
450 000.
కాి
direct la bor cost
200% of dırect laber cost
Per
Tedel adutes B)
Activity rake
C A/B
per machine hour
2000+200e..
Smithson, Inc. produces two types of gas grills: a family model and a deluxe model. Smithson's
controller has decided to use a plantwide overhead rate based on direct labor costs. The
president of the company recently heard of activity-based costing and wants to see how the
results would differ if this system were used. Two activity cost pools were developed: machining
and machine setup. Presented below is information related to the company's operations:
c00+800)!
Family Model
$75,000
2,000
200
Deluxe Model
$150,000
2,000
Direct labor costs
Machine hours
Setup hours
800
Total estimated overhead costs are $450,000. Overhead cost allocated to the machining activity
cost pool is $270,000 and $180,000 is allocated to the machine setup activity cost pool.
450000-6 4500
ల
Instructions
(a)
(b)
(c)
(d)
150
Compute the overhead rate using the traditional (plantwide) approach.
Compute the overhead rates using the activity-based costing approach.
Determine the difference in allocation between the two approaches.
Smithson, Inc. decided to implement the activity-based costing approach and was quite
successful in its use. However, the controller is wondering if instead of only two activity
cost pools, they should expand to three activity cost pools based on the following:
Family Model
$75,000
2,000
200
Deluxe Model
$150,000
2,000
Direct labor costs
240000
4000-
1000-170,000 (
125-40000
Machine hours
Setup hours
Packaging hours
800
50
75
The estimated overhead of $450,000 is allocated as follows: machining activity cost pool
$240,000, machine set up $170,000 and packaging $40,000.
(1)
Determine the overhead rates using the activity-based costing approach with
three cost pools.
Determine the overhead allocation for the family model and the deluxe model
using three activity cost pools. What is the difference in allocation between two
(2)
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