Max Inc. has provided the following data from its activity-based system: Activity Cost Total Cost Total Activity Designing $378,100 product 6,360 product design hours Setting up $52,678 7366 batch set-ups batches Assembling $25,122 4,018 assembly hours products The activity rate for the "designing products" activity cost pool is

Max Inc. has provided the following data from its activity-based system: Activity Cost Total Cost Total Activity Designing $378,100 product 6,360 product design hours Setting up $52,678 7366 batch set-ups batches Assembling $25,122 4,018 assembly hours products The activity rate for the "designing products" activity cost pool is

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 4CE: Larsen, Inc., produces two types of electronic parts and has provided the following data: There are...

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Larsen, Inc., produces two types of electronic parts and has provided the following data: There are four activities: machining, setting up, testing, and purchasing. Required: 1. Calculate the activity consumption ratios for each product. 2. Calculate the consumption ratios for the plantwide rate (direct labor hours). When compared with the activity ratios, what can you say about the relative accuracy of a plantwide rate? Which product is undercosted? 3. What if the machine hours were used for the plantwide rate? Would this remove the cost distortion of a plantwide rate?
TASK A. Problem Solving. Analyze the given problems and use the worksheet provided for your answers. 1) Amore Companyproducestwoproductsinasinglefactory.Thefollowingproductionandcostinformationhasbe endetermined: Model1 1,000 100 Model2 200 Unitsproduced Materialmoves(total) Testingtime(total) Directiaborhoursperunit 40 250 125 Thecontrollerhasdetermined totaloverhead to beP480,000.P140,000relatestomateriaimoves;P150,000relatestotesting;theremainderisr elatedtolabortime. a) If Amore uses direct labor hours to allocate overhead to ach model, what would overhead per unit be for Model 2? b) If Amore uses activity-based costing to allocate overhoad to each model, what would overhead per unit be for Model 2? 2) GLPower Company manufactures a line of high-end laundry equipment. The accountant has proposed changing from a traditional costing syslem to an activity-based costing system. The president is not convinced of making the changes, so he requests that the next large order for equipment…
The following table presents the activities and activity drivers that LampPlus uses in manufacturing Product 1 and Product 2. Complete the table: Activity Design Preparation Machining Finishing Inspection Packaging Shipping Cost Activity Driver $ 39,060 Design time $ 67,650 Labor hours 105,200 Machine hours $ Batches Units Orders $ 12,720 Packages Driver Usage Prod. 1 840 3,130 209 76 Prod. 2 1,330 hours hours 300 56 Activity Rate $ $ $ $ /hour /hour 20 /hour 50 /batch 17 /unit 302 /order /package Activity Cost:Prod. 1 $ $ $ $ 34,430 31,200 Activity Cost:Prod. 2 9,690 $ 12,986 $ 19,720 3,600
A company makes a product R. which requires one each of two first-level components, 5 and T. Routing data for these items are as follows tem Operation No. Dept Work Center Run Time Per unit Setup Time Average Lot size No. No. Std hours) Std hours) R 10 12 0.80 1.50 20 10 12 16 0.50 0.60 40 20 14 1.20 2.00 40 10 16 1.00 0.40 40 20 14 0.30 1.20 40 (a) The Bill of Capacity for product R (in standard hours) at work center 12 is closest to:
What is the process productivity in the SSD Production Department?
Kingcade Corporation keeps careful track of the time required to fill orders. Data concerning a particular order appear below: Hours Wait time 18.3 Process time 1.1 Inspection time 0.1 Move time 2.0 Queue time 9.1 The manufacturing cycle efficiency (MCE) was closest to:
1
Under an activity based costing system, what is the per-unit overhead cost of Z
The pool rate is defined as the cost per unit of the cost driver for a particular activity cost pool. Group of answer choices True False Rocket Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below. Activity Cost Cost Driver Material handling $ 225,000 Number of parts Material insertion 2,475,000 Number of parts Automated machinery 840,000 Machine hours Finishing 170,000 Direct labor hours Packaging 170,000 Orders shipped Total $ 3,880,000 The following information pertains to the three product lines for next year: Economy Standard Deluxe Units to be produced 10,000 5,000 2,000 Orders to be shipped 1,000 500 200 Number of parts per unit 10 15 25 Machine…
The company is considering using a two-stage cost allocation system and wants to assess the effects on reported product profits. The company is considering using Engineering Hours and Users as the allocation base. Additional information follows. Toot! TiX Total Engineering hours 7,650 5,650 13,300 Users 9,500 17,100 26,600 Engineering – hour related administrative cost $ 114,380 User-related administrative cost $…
Larsen, Inc., produces two types of electronic parts and has provided the following data: Part X12 Part YK7 Total Units produced 100,000 600,000 — Direct labor hours 30,000 70,000 100,000 Machine hours 50,000 300,000 350,000 Number of setups 40 80 120 Testing hours 1,000 9,000 10,000 Number of purchase orders 500 3,500 4,000 There are four activities: machining, setting up, testing, and purchasing. Required: Calculate the activity consumption ratios for each product. Calculate the consumption ratios for the plantwide rate (direct labor hours). When compared with the activity ratios, what can you say about the relative accuracy of a plant wide rate? Which product is under costed? What if the machine hours were used…
Data concerning three of Kilmon Corporation’s activity cost pools appear below: Activity Cost Pools Estimated Overhead Cost Expected Activity Assembling products $ 65,540 4,520 assembly hours Designing products $ 578,112 3,011 product design hours Setting up batches $ 41,820 820 batch set-ups Required: Compute the activity rates for each of the three cost pools. (Round your answers to 2 decimal places.) Activities Activity rate Assembly products Designing products Setting up batches