F1.Subject :- Accounting Walton Electronics produces video games in three market categories: commercial, home, and miniature. Walton has traditionallyallocated overhead costs to the three products using the companywide allocation base of direct labor hours. The company recentlyimplemented an ABC system when it installed computer-controlled assembly stations that rendered the traditional costing systemineffective. In implementing the ABC system, the company identified the following activity cost pools and cost drivers:CategoryUnitBatchProductFacilityTotal PooledCost$ 432,000Required248,400123,600318,000Additional data for each of the product lines follow:Direct materials costDirect labor costNumber of labor hoursNumber of machine hoursNumber of production ordersResearch and development timeNumber of unitsSquare footageTypes of CostsIndirect labor wages, supplies, factory utilities,machine maintenanceMaterials handling, inventory storage, labor forsetups, packaging, labeling and shipping, schedulingResearch and developmentRent, general utilities, maintenance, facilitydepreciation, administrative salariesCommercial$ 25.18 per unit$ 10.90 per hour6,00010,00020010%15,00020,000Home$ 15.18 per unit$ 8.90 per hour12,00045,0002,00020%45,00050,00070%Miniature$ 12.18 per unit$9.90 per hour2,00025,00080014,00030,000Machine hoursCost DriverNumber of production ordersTime spent by research departmentSquare footageTotal20,00080,0003,000100%74,000100,000a. Determine the total cost and cost per unit for each product line, assuming that overhead costs are allocated to each product lineusing direct labor hours as a companywide allocation base. Also determine the combined cost of all three product lines.b. Determine the total cost and cost per unit for each product line, assuming that an ABC system is used to allocate overhead costs.Determine the combined cost of all three product lines.Note: For all requirements, round intermediate calculations for allocation rates to 2 decimal places and all other calculations tothe nearest whole dollar. Round "Cost per Unit" to 2 decimal places. Round your answers for "Total Cost" to the nearest wholedollar amount.S Type of Producta. Commerciala. Homea. MiniatureCombined totalb. Commercialb. Homeb. MiniatureCombined total$$Total Cost00Cost per Unit

Name: F1.Subject :- Accounting Walton Electronics produces video games in th
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Description: F1.Subject :- Accounting Walton Electronics produces video games in three market categories: commercial, home, and miniature. Walton has traditionallyallocated overhead costs to the three products using the companywide allocation base of direct labor

ABC cost system is an activity-based cost system that identifies all the activities in the entity…

Business

Accounting

Required a. Determine the total cost and cost per unit for each product line, assuming that overhead costs are allocated to each product line using direct labor hours as a companywide allocation base. Also determine the combined cost of all three product lines. b. Determine the total cost and cost per unit for each product line, assuming that an ABC system is used to allocate overhead costs. Determine the combined cost of all three product lines. Note: For all requirements, round intermediate calculations for allocation rates to 2 decimal places and all other calculations to the nearest whole dollar. Round "Cost per Unit" to 2 decimal places. Round your answers for "Total Cost" to the nearest whole dollar amount.

Required a. Determine the total cost and cost per unit for each product line, assuming that overhead costs are allocated to each product line using direct labor hours as a companywide allocation base. Also determine the combined cost of all three product lines. b. Determine the total cost and cost per unit for each product line, assuming that an ABC system is used to allocate overhead costs. Determine the combined cost of all three product lines. Note: For all requirements, round intermediate calculations for allocation rates to 2 decimal places and all other calculations to the nearest whole dollar. Round "Cost per Unit" to 2 decimal places. Round your answers for "Total Cost" to the nearest whole dollar amount.

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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Concept explainers

Process Costing

Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure. 

Job Costing

Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.

ABC Costing

Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.

Topic Video

Question

F1.

Subject :- Accounting

Walton Electronics produces video games in three market categories: commercial, home, and miniature. Walton has traditionally
allocated overhead costs to the three products using the companywide allocation base of direct labor hours. The company recently
implemented an ABC system when it installed computer-controlled assembly stations that rendered the traditional costing system
ineffective. In implementing the ABC system, the company identified the following activity cost pools and cost drivers:
Category
Unit
Batch
Product
Facility
Total Pooled
Cost
$ 432,000
Required
248,400
123,600
318,000
Additional data for each of the product lines follow:
Direct materials cost
Direct labor cost
Number of labor hours
Number of machine hours
Number of production orders
Research and development time
Number of units
Square footage
Types of Costs
Indirect labor wages, supplies, factory utilities,
machine maintenance
Materials handling, inventory storage, labor for
setups, packaging, labeling and shipping, scheduling
Research and development
Rent, general utilities, maintenance, facility
depreciation, administrative salaries
Commercial
$ 25.18 per unit
$ 10.90 per hour
6,000
10,000
200
10%
15,000
20,000
Home
$ 15.18 per unit
$ 8.90 per hour
12,000
45,000
2,000
20%
45,000
50,000
70%
Miniature
$ 12.18 per unit
$9.90 per hour
2,000
25,000
800
14,000
30,000
Machine hours
Cost Driver
Number of production orders
Time spent by research department
Square footage
Total
20,000
80,000
3,000
100%
74,000
100,000
a. Determine the total cost and cost per unit for each product line, assuming that overhead costs are allocated to each product line
using direct labor hours as a companywide allocation base. Also determine the combined cost of all three product lines.
b. Determine the total cost and cost per unit for each product line, assuming that an ABC system is used to allocate overhead costs.
Determine the combined cost of all three product lines.
Note: For all requirements, round intermediate calculations for allocation rates to 2 decimal places and all other calculations to
the nearest whole dollar. Round "Cost per Unit" to 2 decimal places. Round your answers for "Total Cost" to the nearest whole
dollar amount.
S

Type of Product
a. Commercial
a. Home
a. Miniature
Combined total
b. Commercial
b. Home
b. Miniature
Combined total
$
$
Total Cost
0
0
Cost per Unit

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