PROBLEM 1 ABC Company's total overhead costs at various levels of activity are presented below: Machine Hours Total Overhead Costs $216,800 $194,000 $239,600 $262,400 March April May June 60,000 50,000 70,000 80,000 Assume that the overhead costs above consist of utilities, supervisory salaries, and maintenance. At the 50,000 machine-hour level of activity these costs are: Utilities (V). Supervisory salaries (F).. Maintenance (M). Total overhead cost. $ 54,000 62,000 78.000 $194.000 V = Variable; F = Fixed; M = Mixed The company wants to break down the maintenance cost into its basic variable and fixed cost elements. Required: a. Estimate the maintenance cost for June. b. Use the high-low method to estimate the cost formula for maintenance cost. C. Estimate the total overhead cost at an activity level of 55.000 machine hours.

PROBLEM 1 ABC Company's total overhead costs at various levels of activity are presented below: Machine Hours Total Overhead Costs $216,800 $194,000 $239,600 $262,400 March April May June 60,000 50,000 70,000 80,000 Assume that the overhead costs above consist of utilities, supervisory salaries, and maintenance. At the 50,000 machine-hour level of activity these costs are: Utilities (V). Supervisory salaries (F).. Maintenance (M). Total overhead cost. $ 54,000 62,000 78.000 $194.000 V = Variable; F = Fixed; M = Mixed The company wants to break down the maintenance cost into its basic variable and fixed cost elements. Required: a. Estimate the maintenance cost for June. b. Use the high-low method to estimate the cost formula for maintenance cost. C. Estimate the total overhead cost at an activity level of 55.000 machine hours.

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 1 LP Corporation uses an activity-based costing system with the following three activity cost pools: Total Activity Activity Cost Pool Fabrication 80,000 machine-hours 400 orders Order processing Other Not applicable The Other activity cost pool is used to accumulate costs of idle capacity and facility-sustaining costs. The company has provided the following data concerning its costs: Wages and salaries Depreciation P460,000 180,000 200,000 P840,000 Occupancy Total The distribution of resource consumptions across activity cost pools is given below: Activity Cost Pools Order Fabrication Other Total Processing Wages and salaries 5% 80% 15% 100% Depreciation 15% 40% 45% 100% Occupancy 15% 50% 35% 100% Required: 1. Determine the activity rate for the Fabrication activity cost pool. 2. Determine the activity rate for the Order Processing activity cost pool. ersity
A corporation's cost data is: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Sales commissions Variable administrative expense Fixed selling and administrative expense What is the amount of product costs, if 4,000 units are produced? Multiple Choice O O O O $57,200 $8,800 $44,400 $53,200 Cost per Cost per Unit Period $ 6.00 $ 3.35 $ 1.75 $ 1.00 $ 0.40 $ 8,800 $ 4,000
TB MC Qu. 4-49 Boesenhofer, Inc., manufactures and sells... Boesenhofer, Inc., manufactures and sells two products: Product N6 and Product N7. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity Estimated Expected Activity Activity Overhead Activity Cost Pools Measures Cost Product N6 Product N7 Labor-related DLHS Total $345,060 128,534 107,598 2,100 600 4,100 Machine setups 5,000 800 3,800 setups 7,100 Order size MHs 1,400 7,900 $581,192 The activity rate for the Machine Setups activity cost pool is closest to: Multiple Cholce $73.57 per setup $91.81 per setup Prev of 36 Next > 10:54 AM 66°F Mostly cloudy 目。 21 10/20/2021 pe here to search DELL Home End Delete PgUp PgDn F12 PrtScr Insert F10 F11 F8 F9 F7 F4 F5 F6 F3 Num Lock Backspace & %23 %24
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Use three different activities as cost drivers, machine setups, machine hours, and inspections to compute the overhead rate for each activity. Activity Overhead per Activity Annual Usage Machine Setups $75,000 6,000 Machine Hours $85,002 5,484 Inspections 70,000 20,000
Question 6: Your company currently produces a range of three products, D, E, and F to which the following details relate for Period 2. D E F Production (units) 1,500 2,500 14,000 Material cost per unit Br. 18 Br. 10 Br. 20 Labor hours per unit 1 3 2 Machine hours per unit 3 2 6 Labor costs are Br. 8 per hour and production overheads are currently absorbed in the conventional system by reference to machine hours. Total production overheads for Period 2 have been analyzed as follows: Set-up cost 327,250 Handling cost 187,000 Machine cost 140,250 Inspection cost 280,500 935,000 Calculate the cost per unit for each product using conventional The introduction of an ABC is being considered and to that end the following volume…
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INA TOLOWING ASTIMATAS that are relate to the operation menanments is as Thin Required information Number of employees Number of customers Number of billable hours Total overhead cost Multiple Choice O O O $37,200 $292,200 The Company uses the step method for cost allocation as the administrative service department also provides services to the machine maintenance department. Assume that costs are allocated between service departments based on the # of employees. Using the information provided, what is the total amount of machine maintenance cost that will be allocated to the operating departments? Note: Round your intermediate calculations to the nearest whole dollar. $92,000 properties 40 125 $124,000 3,000 $ 455,000 properties 20 160 2,000 $ 374,000 Maintenance 15 n/a n/a n/a Total 75 285 5,000 $ 829,000
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