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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Large, Inc., manufactures and sells two products: Product G8 and Product 00. Historically, the firm has used a traditional costing system, with direct laborurs as an activity base, to allocated manufaturing overhead to products. Data concerning the expected production of each product and the expected total direct labor-hours (DLHS) required to produce that output appear below: Product GS Product 00 Total direct labor-hours Product G8 Product 00 Activity Cost Pools Labor-related Expected Production 780 380 The direct labor rate is $22.90 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit $121.10 $121.50 Machine setups Order size Activity Measures DLHS setups MHS Direct Labor-Hours Per Unit The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: 5.8 2.8 Estimated Overhead Cost $ 59,555 58,390 369,508 $487,453 Total Direct Labor- Hours…
A. How much overhead will be assigned to each product if these three cost drivers are used to allocate overhead? What is the total cost per unit produced for each product? B. How much of the overhead will be assigned to each product if direct labor cost is used to allocate overhead? What is the total cost per unit produced for each product?
2. Austin Electronics manufactures two large-screen television models: the Royale, which sells for $1,600, and a new model, the Majestic, which sells for $1,300. Few per unit cost data are given: Traditional Costing DM Royale $850 Majestic $570 DL ($20 per hour) MOH ($38 per DLH) $140 $248 $100 $190 In 2017, Austin manufactured 25,000 units of the Royale and 10,000 units of the Majestic. The overhead rate of $38 per direct labor hour was determined by dividing total expected manufacturing overhead of $7,600,000 by the total direct labor hours (200,000) for the two models. Management is considering phasing out the Royale model (comparatively low profit) and increasing the production of the Majestic model Before finalizing its decision, management asks Austin's controller to prepare an analysis using activity-based costing (ABC). The controller accumulates the following information about overhead for the year ended December 31, 2017. Est. Overhead Activity | Level 40,000 18,000…
TCM Company uses activity-based costing to determine products costs for external financial reports. The company has provided the following data concerning its activity-based costing system: Activity cost pools (and activity measures) Depreciation (allocated based on machine-hours) Batch setup (allocated based on # of set ups) General Factory (allocated based on direct labor hours) Estimated Overhead costs $67,500 273,700 204,000 Expected Activity (Allocation base) Product y Product x Activity Cost pool Depreciation Batch setup General factory The activity rate for the general factory activity cost pool is? Total 5000 m hours 4000 1000 7000 set ups 3000 4000 8000 dl hours 1000 7000
Which of the following correctly describes the term cost driver? a.The primary factor which is correlated with the amount of cost incurred to produce a product b.The total material, labor, and overhead cost of a completed job c.The inflation rate which causes costs to rise d.The initial purchase price of direct materials
Question: In cost accounting, what is the primary purpose of calculating the predetermined overhead rate? A) To allocate indirect costs to products based on a predetermined formula.B) To determine the actual overhead costs incurred during a specific production period.C) To calculate variable costs associated with each unit of production.D) To assess fixed costs that remain constant regardless of production levels.
Hi-Tek Manufacturing, Incorporated, makes two industrial component parts-B300 and T500. An absorption costing income statement for the most recent period is shown below: Hi-Tek Manufacturing, Incorporated Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss Hi-Tek produced and sold 60,400 units of B300 at a price of $21 per unit and 12,800 units of T500 at a price of $39 per unit. The company's traditional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labor dollars as the allocation base. Additional information relating to the company's two product lines is shown below: Direct materials Direct labor Manufacturing overhead Cost of goods sold $ 1,767,600 1,212,922 554,678 610,000 $ (55,322) 8300 T500 $ 400,300 $ 162,400 $ 120,100. $ 42,400 Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product-sustaining (number of products) Other…
Shubelik Company is changing to an activity-based costing method. They have determined that they will use three cost pools: setups, inspections, and assembly. Which of the following would not be used as the activity base for any of these three activities? a.number of inspections b.number of setups c.number of direct labor hours d.number of units to be produced
An activity based costing system is being considered at Evelia, nv to assign products overhead costs; these overhead costs are currently assigned strictly by number of units produced. First, the two overhead costs of Rent expense and Insurance expense would be allocated to three activity cost pools - Finishing, Sanding, and Other - based on resource consumption. The information used to perform these allocations is below: Overhead Costs: Rent expense: $2,000,000 Insurance expense: $1,650,000 Distribution of Resource Consumption across Activity Cost Pools: Overhead Cost Activity Cost Pools Finishing Sanding Other Rent expense 0.45 0.25 0.30 Insurance expense 0.20 0.35 0.45 In the second stage, Finishing costs would be assigned to products using direct labor hours and Sanding costs would be assigned to products using the number of machine hours. The costs in the Other activity pool would not be assigned to products. Activity data for the company's two products is as…
Heidelberg Fabrication manufactures two products, G-09 and G-35: Units produced Direct materials cost per unit Machine-hours per unit Production runs per quarter G-09 19,400 $7 4 144 Machine depreciation Setup labor Materials handling Total Production at the plant is automated and any labor cost is included in overhead. Data on manufacturing overhead at the plant follow: G-35 3,880 $ 19 7 72 $184,760 52,380 41,904 $ 199,044 Required: a. Heidelberg currently applies overhead on the basis of machine-hours. What is the predetermined overhead rate for the quarter? Note: Round your answer to 2 decimal places. b. Heidelberg is thinking of adopting an ABC system. They have tentatively chosen the following cost drivers: machine-hours for machine depreciation, production runs for setup labor, and direct material dollars for materials handling. Compute the cost driver rates for the proposed system at Heidelberg.
Doede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts--equipment depreciation and supervisory expense--to three activity cost pools--Machining, Order Filling, and Other--based on resource consumption. Data to perform these allocations appear below: Overhead costs: Equipment depreciation $ 91,000 Supervisory expense $ 12,300 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Machining Order Filling Other Equipment depreciation 0.60 0.30 0.10 Supervisory expense 0.60 0.20 0.20 In the second stage, Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity: MHs (Machining) Orders (Order Filling) Product W1 6,050 198 Product M0 21,800 999 Total…
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