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Northwest Company produces two types of glass shelving: rounded edge and squared edge. The company reports the following cost data Direct materials. Direct labor Overhead (using plantwide rate) Total product cost Units produced Product cost per unit Activity Purchasing Depreciation of machinery Rounded Edge $ 39,600 13,200 46,200 $ 99,000 13,200 $ 7.50 Setup Total Squared Edge $ 51,600 34,400 87,400 $ 173,400 Northwest's controller wants to apply activity-based costing to allocate the $133,600 of overhead cost to the two products to see whether product cost per unit would change markedly from that above. The company's budgeted activity usage equals its actual activity usage for the period. The following additional information is collected. Budgeted Cost $ 7,000 69,400 57,200 $ 133,600 17,200 $ 10.08 Total $ 91,200 47,600 133,600 $ 272,400 Activity Cost Driver Purchase orders Machine hours Setups Rounded Edge 189 orders 500 hours 40 setups Required: 1. Compute the activity rate for each activity using activity-based costing. 2. Compute overhead cost per unit for each of the two products using activity-based costing. 3. Determine product cost per unit for each of the two products using activity-based costing. Activity Usage Squared Edge 511 orders. 1,500 hours 210 setups Total 700 orders 2,000 hours 250 setups

Northwest Company produces two types of glass shelving: rounded edge and squared edge. The company reports the following cost data Direct materials. Direct labor Overhead (using plantwide rate) Total product cost Units produced Product cost per unit Activity Purchasing Depreciation of machinery Rounded Edge $ 39,600 13,200 46,200 $ 99,000 13,200 $ 7.50 Setup Total Squared Edge $ 51,600 34,400 87,400 $ 173,400 Northwest's controller wants to apply activity-based costing to allocate the $133,600 of overhead cost to the two products to see whether product cost per unit would change markedly from that above. The company's budgeted activity usage equals its actual activity usage for the period. The following additional information is collected. Budgeted Cost $ 7,000 69,400 57,200 $ 133,600 17,200 $ 10.08 Total $ 91,200 47,600 133,600 $ 272,400 Activity Cost Driver Purchase orders Machine hours Setups Rounded Edge 189 orders 500 hours 40 setups Required: 1. Compute the activity rate for each activity using activity-based costing. 2. Compute overhead cost per unit for each of the two products using activity-based costing. 3. Determine product cost per unit for each of the two products using activity-based costing. Activity Usage Squared Edge 511 orders. 1,500 hours 210 setups Total 700 orders 2,000 hours 250 setups

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Exercise 17-19 (Algo) Activity-based costing to compute activity rates, overhead cost per unit, and product cost per unit LO P3 Northwest Company produces two types of glass shelving: rounded edge and squared edge. The company reports the following cost data Direct materials Direct labor Overhead (using plantwide rate) Total product cost Units produced Product cost per unit Activity Purchasing Depreciation of machinery Setup Total Northwest's controller wants to apply activity-based costing to allocate the $133,600 of overhead cost to the two products to see whether product cost per unit would change markedly from that above. The company's budgeted activity usage equals its actual activity usage for the period. The following additional information is collected. Required 1 Required 2 Rounded Edge $ 39,600 13,200 46,200 $ 99,000 13,200 $ 7.50 Overhead cost per unit-Rounded Edge Activity Purchasing Depreciation Setup Total allocated cost Units produced Overhead cost per unit Budgeted Cost $ 7,000 69,400 57,200 $ 133,600 Required: 1. Compute the activity rate for each activity using activity-based costing. 2. Compute overhead cost per unit for each of the two products using activity-based costing. 3. Determine product cost per unit for each of the two products using activity-based costing. Complete this question by entering your answers in the tabs below. Required 3 Overhead cost per unit-Squared Edge Activity Purchasing Depreciation Setup Total allocated cost Units produced Squared Edge $ 51,600 34,400 87,400 $ 173,400 17,200 $10.08 Total $ 91,200 47,600 133,600 $ 272,400 Compute overhead cost per unit for each of the two products using activity-based costing. (Round "Activity Rate" to 2 decimal places and other answers to the nearest whole dollar amount.) Activity Usage Activity Cost Driver Purchase orders Machine hours Setups machine hours purchase orders setups Activity Usage Rounded Edge 189 orders 500 hours 40 setups Activity Rate Activity Rate Allocated Cost Activity Usage Squared Edge 511 orders 1,500 hours 210 setups Allocated Cost Total 700 orders 2,000 hours 250 setups
Transcribed Image Text:Exercise 17-19 (Algo) Activity-based costing to compute activity rates, overhead cost per unit, and product cost per unit LO P3 Northwest Company produces two types of glass shelving: rounded edge and squared edge. The company reports the following cost data Direct materials Direct labor Overhead (using plantwide rate) Total product cost Units produced Product cost per unit Activity Purchasing Depreciation of machinery Setup Total Northwest's controller wants to apply activity-based costing to allocate the $133,600 of overhead cost to the two products to see whether product cost per unit would change markedly from that above. The company's budgeted activity usage equals its actual activity usage for the period. The following additional information is collected. Required 1 Required 2 Rounded Edge $ 39,600 13,200 46,200 $ 99,000 13,200 $ 7.50 Overhead cost per unit-Rounded Edge Activity Purchasing Depreciation Setup Total allocated cost Units produced Overhead cost per unit Budgeted Cost $ 7,000 69,400 57,200 $ 133,600 Required: 1. Compute the activity rate for each activity using activity-based costing. 2. Compute overhead cost per unit for each of the two products using activity-based costing. 3. Determine product cost per unit for each of the two products using activity-based costing. Complete this question by entering your answers in the tabs below. Required 3 Overhead cost per unit-Squared Edge Activity Purchasing Depreciation Setup Total allocated cost Units produced Squared Edge $ 51,600 34,400 87,400 $ 173,400 17,200 $10.08 Total $ 91,200 47,600 133,600 $ 272,400 Compute overhead cost per unit for each of the two products using activity-based costing. (Round "Activity Rate" to 2 decimal places and other answers to the nearest whole dollar amount.) Activity Usage Activity Cost Driver Purchase orders Machine hours Setups machine hours purchase orders setups Activity Usage Rounded Edge 189 orders 500 hours 40 setups Activity Rate Activity Rate Allocated Cost Activity Usage Squared Edge 511 orders 1,500 hours 210 setups Allocated Cost Total 700 orders 2,000 hours 250 setups
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