aps国 Reading liOnline Services vOS Ticket systemMy DispenseAcademic CalendarMy courses (9) vcosts during the current period. Overhead currently is applied to the products on the basis of direct labor-hours. Data concerning the current period'soperations appear below:Required:a. Compute the predetermined overhead rate under the current method, and determine the unit product cost of each product for the current year.b. The company is considering using an activity-based costing system to compute unit product costs for external financial reports instead of its traditionalsystem based on direct labor-hours. The activity-based costing system would use three activity cost pools. Data relating to these activities for the currentperiod are given below:Expected ActivityProduct DActivity Cost PoolMachine setups.......Purchase orders...General factory ...--Estimated Overhead CostsProduct CTotalS 12,19079,200801502307309201,6504,7609,12069,400S160.79013,880Required:Determine the unit product cost of each product for the current period using the activity-based costing approach.Refresh Submissions3:36 PMG ) ENG4/21/2021 nline Services vOS Ticket systemMy DispenseAcademic CalendarMy coursesActivity-based costing (ABC) LO#5Activity-based costing (ABC) is a costing model that identifies activities in an organization and assigns the cost of each activity resource to all products andservices according to the actual consumption by each: it assigns more indirect costs (overhead) into direct costs.In this way an organization can precisely estimate the cost of its individual products and services for the purposes of identifying and eliminating thosewhich are unprofitable and lowering the prices of those which are overpriced.In a business organization, the ABC methodology assigns an organization's resource costs through activities to the products and services provided to itscustomers. It is generally used as a tool for understanding product and customer cost and profitability. As such, ABC has predominantly been used tosupport strategic decisions such as pricing, outsourcing and identification and measurement of process improvement initiatives. In this sense, you arerequired to apply your understanding of the topic in giving recommendation to management in regards to the following caseProduct CProduct DEstimated volumeDirect labor-hours per unit.Direct materials cost per unit ....Direct labor cost per unit..........3,400 units4,800 units1.90 hours1.40 hourS7.40$12.70$19.00$14.00Ronaldo Company manufactures two products, Product C and Product D. The company estimated it would incur $160,790 in manufacturing overheadcosts during the current period. Overhead currently is applied to the products on the basis of direct labor-hours. Data concerning the current period'soperations appear below:Required:日 C3:36 PMa ) ENG4/21/2021%23

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Description: aps国 Reading liOnline Services vOS Ticket systemMy DispenseAcademic CalendarMy courses (9) vcosts during the current period. Overhead currently is applied to the products on the basis of direct labor-hours. Data concerning the current period'soperat

Activity based costing (ABC) with the help of cost drivers, allocates the overheads to cost pools…

Business

Accounting

Required: a. Compute the predetermined overhead rate under the current method, and determine the unit product cost of each product for the current year. b. The company is considering using an activity-based costing system to compute unit product costs for external financial reports instead of its traditional system based on direct labor-hours. The activity-based costing system would use three activity cost pools. Data relating to these activities for the current period are given below: Expected Activity Product D Activity Cost Pool Machine setups.. Estimated Overhead Costs Product C Total S 12,190 79,200 69,400 S160.790 80 150 230 Purchase orders... 730 920 1,650 13,880 General factory ..-- 4,760 9,120 Required: Determine the unit product cost of each product for the current period using the activity-based costing approach.

Required: a. Compute the predetermined overhead rate under the current method, and determine the unit product cost of each product for the current year. b. The company is considering using an activity-based costing system to compute unit product costs for external financial reports instead of its traditional system based on direct labor-hours. The activity-based costing system would use three activity cost pools. Data relating to these activities for the current period are given below: Expected Activity Product D Activity Cost Pool Machine setups.. Estimated Overhead Costs Product C Total S 12,190 79,200 69,400 S160.790 80 150 230 Purchase orders... 730 920 1,650 13,880 General factory ..-- 4,760 9,120 Required: Determine the unit product cost of each product for the current period using the activity-based costing approach.

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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18. Which is not a step in activity-based costing? Group of answer choices identify the activities performed by the organization identify the cost driver(s) associated with each activity assign costs to products by multiplying the cost driver rate by the volume of the cost driver units consumed by the product compute a cost rate per production
Classify each of the following costs as either unit-level, batch-level, product-level, or facility-level. a. Engineering costs for a new product b. Order processing c. Depreciation on factory d. Direct labor e. Shipment of an order to a customer f. Product line manager salary g. Machine setup costs that are incurred whenever a new production order is started h. Patent for new product ore help Product-level Batch-level or Unit-level or Facility-level Facility-level Unit-level Unit-level Batch-level Batch-level or Facility-level Batch-level or Unit-level Batch-level or Unit-level or Facility-level Facility-level Facility-level or Product-level Facility-level or Unit-level Product-level Unit-level all
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In Process Costing, before you can calculate the cost to produce a product. you must determine what the: A) units that we a company produces during an accounting period. B) units that have been finished and placed in finished goods inventory. C) a method that assigns all cost to produce a product to a job during the accounting period. D) equivalent units of production.
Required:1. Using the traditional approach to assigning overhead costs to academic programs:a. Calculate the predetermined overhead rate.b. Assign the overhead costs to each academic program using the predetermined rate.c. Calculate the total cost per student (direct costs plus overhead) of operating each academic program.2. Using ABC, complete the following requirements:a. Complete the first-stage allocation of overhead costs to academic programs.b. Calculate the activity rates for each of the activity cost pools.c. Using the activity rates calculated in (b), complete the second-stage allocation of overhead to academic programs.3. Based on the results of (2), calculate the total cost per student (direct costs plus overhead) of operating each academic program.4. Draft a memo to Maple explaining the key reasons for differences in the total cost per student of operating each academic program that arise between traditional costing approach and ABC.
Concepts and Terminology From the choices presented in parentheses, choose the appropriate term for completing each of the following sentences: Appr Sentence comp a. An example of factory overhead is (electricity used to run assembly line, CEO salary). b. Direct materials costs combined with direct labor costs are called (prime, conversion) costs. c. Long-term plans are called (strategic, operational) plans. d. Materials for use in production are called (supplies, materials inventory). e. The phase of the management process that uses process information to eliminate the source of problems in a process so that the process delivers the correct product in the correct quantities is called (directing, improving). f. The plant manager's salary would be considered (direct, indirect) to the product. g. The salaries of salespeople are normally considered a (period, product) cost. Previous Next
A manufacturer reports three activities: assembling components into products; product design; and sales order processing. Determine whether each of the following cost drivers relates to assembly, design, or order processing. Cost Driver 1. Direct labor hours to assemble components 2. Number of design changes 3. Number of components assembled 4. Number of design hours 5. Number of shipments made 6. Number of sales orders processed Activity
True/false 1) Activity-based costing information is recorded on a job sheet each month which is later posted to the general ledger at the end of the year. ________ 2. A factory production manager’s salary is considered an organizational sustaining activity cost. ________ 3. First stage allocation is the process by which overhead costs are assigned to activity cost pools in an activity-based costing system. ________ 4. Interviewing operating-level managers is a poor way of determining cost pools in first-stage allocation. ________ 5. Production accountants applying activity rates to cost pools in activity-based costing will be able to calculate standard costs. ________ 6. The process of budgeting often takes place during the process of evaluation. ________ 7. Preparation of the cash budget often precedes the preparation of the sales budget. ________ 8. The self-imposed budget is the same as a top-down budget. ________ 9. The Chief Executive Officer of a corporation…
A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table: Budgeted Activity Activity Cost PoolBudgeted Cost Product AProduct BProduct Activity 1 7,500 10,500 21,500 Activity 2 8,500 16,500 9,500 Activity 3 4,000 2,500 3,125 How much overhead will be assigned to Product B using activity-based costing? 85,000 60,000 112,000
! Required information [The following information applies to the questions displayed below.] For many years, Thomson Company manufactured a single product called LEC 40. Then three years ago, the company automated a portion of its plant and at the same time introduced a second product called LEC 90 that has become increasingly popular. The LEC 90 is a more complex product, requiring 0.60 hours of direct labor time per unit to manufacture and extensive machining in the automated portion of the plant. The LEC 40 requires only 0.20 hours of direct labor time per unit and only a small amount of machining. Manufacturing overhead costs are currently assigned to products on the basis of direct labor-hours. Despite the growing popularity of the company's new LEC 90, profits have been declining steadily. Management is beginning to believe that there may be a problem with the company's costing system. Direct material and direct labor costs per unit are as follows: Direct materials Direct labor…
Chrzan, Incorporated, manufactures and sells two products: Product EO and Product NO. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Product E0 Product Ne Total direct labor-hours Activity Cost Pools Labor-related Production orders Order size The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Overhead Cost Multiple Choice $33.94 per MH $54.20 per MH Direct Expected Labor-Hours Production Per Unit 10.1 410 1,550 9.1 $51.98 per MH $21.40 per MH Activity Measures DLHS orders MHs Total Direct Labor- Hours $ 301,890 61,087 585,366 $948,343 The activity rate for the Order Size activity cost pool under activity-based costing is closest to: 4,141 14, 105 18,246 Product E 4,141 850 5,550 Expected Activity Product NO 14, 105 950 5,250 Total 18,246 1,800 10,800
A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the company's three activity cost pools are shown in the following table: Budgeted Activity Activity Cost PoolBudgeted Cost Product AProduct BProduct Activity 1 7,500 10,500 21,500 Activity 2 8,500 16,500 9,500 Activity 3 4,000 2,500 3,125 How much overhead will be assigned to Product B using activity-based costing? 85,000 60,000 112,000