PA8. A company has traditionally allocated its overhead based on machine hours but had collected this information to change to activity-based costing: Estimated Activity Activity Center Product 1 Product 2 Estimated Cost Machine setups Assembly parts Packaging pieces Machine hour per unit Production volume 15 3,000 500 4 45 3,000 400 3. $ 10,800 144,600 55,350 750 1,500 A. How much overhead would be allocated to each unit under the traditional allocation method? B. How much overhead would be allocated to each unit under activity- based costing?

PA8. A company has traditionally allocated its overhead based on machine hours but had collected this information to change to activity-based costing: Estimated Activity Activity Center Product 1 Product 2 Estimated Cost Machine setups Assembly parts Packaging pieces Machine hour per unit Production volume 15 3,000 500 4 45 3,000 400 3. $ 10,800 144,600 55,350 750 1,500 A. How much overhead would be allocated to each unit under the traditional allocation method? B. How much overhead would be allocated to each unit under activity- based costing?

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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E5-28) Hakara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system, product A has been assigned overhead of $10.80 per unit, while product B has been assigned $3.60 per unit. Management feels that an ABC system will provide a more accurate allocation of the overhead costs and has collected the following cost pool and cost driver information: Cost Pools Machine setup Materials handling Electric power 20 Activity Costs Cost Drivers $360,000 100,000 40,000 Number of units produced Direct materials cost Direct labor cost Number of setup hours Pounds of materials used Kilowatt-hours Setup hours Pounds of materials Kilowatt-hours products: The following cost information pertains to the production of A and B, just two of Hakara's many A 4,000 $ 42,000 $ 24,000 400 1,000 2,000 B 20,000 $ 54,000 $ 40,000 200 3,000 4,000 Activity Driver Consumption Required: 1. Use activity-based costing to determine a unit cost for each…
FIFO method (continuation of 17-36).1. Do Problem 17-36 using the FIFO method of process costing. Explain any difference between the cost per equivalent unit in the assembly department under the weighted-average method and the FIFO method.2. Should Larsen’s managers choose the weighted-average method or the FIFO method? Explain briefly.
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Z Company uses activity based costing and gives you the following data regarding cost pools and estimated overhead cost for each pool. Machine related RO 80,000 Material handling RO 130,000 Purchase related RO 340,000 General factory RO 320,000 The amount of total estimated overhead is: a. RO 660,000 b. RO 550,000 c. RO 790,000 d. RO 870,000 fast just choose
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23) Al Zain Company uses activity based costing and gives you the following data regarding cost pools and estimated overhead cost for each pool. Machine related RO 110,000 Material handling RO 95,000 Purchase related RO 70,000 General factory RO 105,000 The amount of total estimated overhead is: a. RO 175,000 b. RO 270,000 c. RO 380,000 d. Ro 275,000
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10. How much manufacturing overhead was applied from the Molding Department to Job P and how much was applied to Job Q? 11. How much manufacturing overhead was applied from the Fabrication Department to Job P and how much was applied to Job Q? 12. If Job P includes 20 units, what is its unit product cost?
Volume-based method of overhead cost allocation Required: -Allocate costs to products on the basis of labour hours -Over head cost rate = - Please write the formula or equation
Q14. ABC Corp manufactures products X45E and K36N. The company uses a plantwide overhead rate based on DLHS (direct labor-hours). It is considering implementing an activity-based costing (ABC) system that allocates its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products X45E and K36N. Activity Cost Pool Activity Measure Total Cost Total Activity Machining Machine setups $ 120,000 $ 90,000 Number of products $ 84,000 $ 300,000 6,000 MHs 150 setups Machine-hours Number of setups 2 products 10,000 DLHS Product design Order size Direct labor-hours Product Activity Measure X45E 4,000 К36N Machine-hours 2,000 Number of setups Number of products Direct labor-hours 90 60 1 1 7,000 3,000 Determine the percentage of the total overhead cost that is allocated to Product K36N using the plantwide overhead rate?
Kk.335.