Potterii sells its products to large box stores and recently added a retail line of products to sell directly to consumers. These estimates are to be used in determining the overhead allocation rate for ABC: Estimated Cost Pool Cost Driver Overhead Wholesale Retail Ordering Number of Orders $88,000 180,000 40,000 Machine Setups Number of Setups 102,000 200,000 140,000 Inspection Number of Inspections 54,000 40,000 14,000 What would be the predetermined rate for each cost pool? Round "Rate" answers to two decimal places. Estimated Total Overhead Activity Rate Cost Pool Cost Driver per order Number of Orders $88,000 Ordering per setup 102,000 Machine Setups Number of Setups per inspection 54,000 Number of Inspections Inspection

Potterii sells its products to large box stores and recently added a retail line of products to sell directly to consumers. These estimates are to be used in determining the overhead allocation rate for ABC: Estimated Cost Pool Cost Driver Overhead Wholesale Retail Ordering Number of Orders $88,000 180,000 40,000 Machine Setups Number of Setups 102,000 200,000 140,000 Inspection Number of Inspections 54,000 40,000 14,000 What would be the predetermined rate for each cost pool? Round "Rate" answers to two decimal places. Estimated Total Overhead Activity Rate Cost Pool Cost Driver per order Number of Orders $88,000 Ordering per setup 102,000 Machine Setups Number of Setups per inspection 54,000 Number of Inspections Inspection

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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Your Company uses activity-based costing and has estimated its costs for next year in the table below. How much of these costs would the company assign to activity cost pools? Direct labor $50,000 Salary of receptionist for headquarters $35,000 operation Sales commission $95,000 Plant manager's salary $150,000 Depreciation on manufacturing plant $65,000 equipment Salary of president's secretary $38,000 $288,000 $215,000 $433,000 $ 73,000
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Computing product costs in an ABC system The Alright Manufacturing Company in Rochester, Minnesota, assembles and tests electronic components used in smartphones. Consider the following data regarding component T24 (amounts are per unit): Requirements Complete the missing items for the two tables. Why might managers favor this ABC system instead of Alright’s older system, which allocated all manufacturing overhead costs on the basis of direct labor hours?
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For National’s new product, total conversion costs per unit amounted to?
Mission Company is preparing its annual profit plan. As part of its analysis of the profitability of individual products, the controller estimates the amount of overhead that should be allocated to the individual product lines from the information provided below (CMA adapted) Units produced Material moves per product line. Direct labor-hours per product line Budgeted material handling costs: $644,000 Wall Mirrors Specialty Windows 220 20 5 1,100 60 1,200 Under a traditional costing system that allocates overhead on the basis of direct labor-hours, the materials handling costs allocated to one unit of Specialty Windows would be Multiple Choice O $16.800 $54,900 $14,000 $22.700
Sunland Co. gathered the following information on power costs and factory machine usage for the last six months: Month January February March April May June (a) Power Cost $28,390 (b) 36,069 32,895 26,235 (c) 23,890 20,700 Your answer is correct. Variable power costs $ Using the high-low method of analyzing costs, answer the following questions and show computations to support your answers. eTextbook and Media Your answer is correct. Factory Machine Hours What is the estimated variable portion of power costs per factory machine hour? (Round answer to 2 decimal places, e.g. 15.25.) Fixed power costs $ eTextbook and Media 15,800 21,400 Total power cost $ 18,700 High 15,100 13,500 What is the estimated fixed power cost each month? 10,500 1.41 5,895 per factory machine hour Low 5,895 If it is estimated that 13,800 factory machine hours will be run in July, what is the expected total power cost for July?
Cost Behavior SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that its total annual overhead costs can be represented by the following formula: Overhead cost = $539,780 + $1.32X, where X equals number of smokers. Last year, SmokeCity produced 19,700 smokers. Actual overhead costs for the year were as expected. Required: 1. What is the driver for the overhead activity? For questions 2-4, Enter the final answers rounded to the nearest dollar. 2. What is the total overhead cost incurred by SmokeCity last year? 3. What is the total fixed overhead cost incurred by SmokeCity last year? 4. What is the total variable overhead cost incurred by SmokeCity last year?
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Multiple Versus Single Overhead Rates, Activity Drivers Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $490,440 Number of setups 610 Ordering costs 313,500 Number of orders 16,500 Machine costs 917,700 Machine hours 43,700 Receiving 382,200 Receiving hours 9,800 Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B Direct materials $610,000 $766,000 Direct labor 451,000 499,000 Units completed 15,500 7,000 Direct labor hours 6,400 2,300 Number of setups 360 250 Number of orders 5,400 11,100 Machine hours 24,900 18,800 Receiving hours 2,700 7,100 The company's normal activity is 8,700 direct labor hours. Required: 1. Determine the unit cost for each model using direct labor hours to apply overhead. Round intermediate calculations and final…
One of Waterway Company's activity cost pools is machine setups with estimated overhead of $240000. Waterway produces sparklers (360 setups) and lighters (640 setups). How much of the machine setup cost pool should be assigned to sparklers? O $120000 $153600 O $86400 $240000
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