Question:Pat Company uses activity-based costing. The company has twoproducts: A and B. The annual production and sales for Product Ais 1,800 units and for Product B it's 1,050 units. There are threeactivity cost pools, with estimated costs and expected activity asfollows:Activities EstimatedExpected ActivityOverhead CostProduct A Product TotalBActivity 1$46,7751,3001,2002,500Activity 2$68,2772,3001,0003,300Activity 3 $82,502The overhead cost per unit of Product A under activity-basedcosting is closest to:7207001,420A. $139.12B. $68.28C. $32.88D. $63.19

Activities Expected overhead cost (a)Total expected activity (b)Activity rate (a/b)Activity 1 $…

Answered: Question: Pat Company uses…

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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S Activity Cost Pool Labor-related Purchase orders Product testing Template etching General factory Activity Cost Pool Labor-related (DLHS) Activity Measure Direct labor-hours Number of orders Number of tests Number of templates Machine-hours Product A Product B Product C Product D Cost $ 19,250 $ 1,820 $ 6,320 $ 960 $ 68,600 Total Overhead Cost 2. The expected activity for the year was distributed among the company's four products as follows: Expected Activity 1,375 DLHS Expected Activity Product A Product B Product C Product D 300 650 125 300 20 65 180 190 Purchase orders (orders) Product testing (tests) 65 0 80 Template etching (templates) 250 0 26 10 4 General factory (MHs) 3,800 2,000 1,200 2,800 Using the ABC data, determine the total amount of overhead cost assigned to each product. 455 orders 395 tests 40 templates S 9,800 MHs
12 Lavender Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 1,500 units and of Product B is 3,000 units. There are three activity cost pools, with estimated total cost and expected activity as follows: Expected Activity Activity Cost Pool Estimated Cost Product A Product B Total Activity 1 $10,000 420 350 770 Activity 2 12,000 120 420 540 Activity 3 50,000 490 1,162 1,652 The cost per unit of Product B under activity-based costing is closest to which of the following? Select one: a. $16.35 b. $35.38 c. $24.10 d. $31.90
1. COMPUTE THE UNIT PRODUCT COST UNDER ABSORPTION COSTING 2. COMPUTE THE UNIT PRODUCT COST UNDER VARIABLE COSTING
Given the following data, calculate product cost per unit under absorption costing. Direct labor Direct materials Variable overhead Fixed overhead Units produced per year Multiple Choice $28.00 per unit $28.60 per unit $30.00 per unit $30.90 per unit $ 17.00 per unit $ 11.00 per unit $ 0.90 per unit $ 100,000 50,000 units
Using this information from Planters, Inc., what is the cost per unit under variable costing? Round to the nearest penny, two decimal places. Planters, Inc data Cost Production Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Amount 11,808 units $231 271 105 1,150,457
Assume a company's activity-based costing system includes three activities with the following activity rates: Activity Cost Pool Activity Rate Travel $ 2 per mile driven Deliveries $ 50 per delivery Customer service $ 22 per phone call Two of the company's many customers include Customer A and Customer B. These two customers consumed the company's activities as follows: Total Expected Activity Customer A Customer B Travel (number of miles driven) 300 250 Deliveries (number of deliveries) 15 5 Customer service (number of phone calls) 20 12 If the company earned $1,130 in revenue serving Customer B, then what is the customer margin for this customer? Multiple Choice $96 $156 $116 $136
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