Required: a. Prepare a traditional income statement. b. Prepare an activity-based income statement.
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Carbon Company provides the following information about resources.
| Unused Resources Capacity | Cost Driver Volume | ||||
| Resources used | |||||
| Materials | $ | 2,500 | 10,000 | pounds | |
| Energy | 5,750 | 360 | machine-hours | ||
| Setups | 0 | 89 | setups | ||
| Purchasing | 4,000 | 90 | purchase orders | ||
| Customer service | 7,900 | 70 | returns | ||
| Long-term labor | 4,150 | 350 | labor-hours | ||
| Administrative | 4,880 | 440 | labor-hours | ||
| Resources supplied | |||||
| Materials | $ | 122,500 | |||
| Energy | 21,950 | ||||
| Setups | 24,920 | ||||
| Purchasing | 26,500 | ||||
| Customer service | 20,500 | ||||
| Long-term labor | 29,700 | ||||
| Administrative | 28,200 | ||||
Sales revenue for Carbon Company is $590,000.
Required:
a. Prepare a traditional income statement.
b. Prepare an activity-based income statement.
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- Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below. Activity Cost Activity Base Procurement $348,600 Number of purchase orders Scheduling 200,100 Number of production orders Materials handling 471,600 Number of moves Product development 741,200 Number of engineering changes Production 1,511,600 Machine hours Number of Number of Number Number of Number Purchase Production of Engineering Machine of Orders Orders Moves Changes Hours Units Disk drives 3,910 380 1,430 10 1,900 2,400 Tape drives 1,600 235 570 8,000 3,700 Wire drives 11,300 880 4,200 28 11,500 2,300 The activity rate for the procurement activity cost pool is Oa. $133.85 per purchase order Ob. $70.64 per purchase order Oc. S20.74 per purchase order Od. S233.18 per purchase order Previous Next Submit Test for…Schwiesow Corporation has provided the following information: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Sales commissions Multiple Choice O $38,000 O $39,000 Variable administrative expense Fixed selling and administrative expense $ 6,000 If 9,500 units are produced, the total amount of manufacturing overhead cost is closest to: O $37,000 Cost per Unit $ 7.60 $3.40 $ 2.00 $52.300 $ 1.00 $ 0.30 Cost per Period $ 20,000Steel Company uses activity-based costing and reports the following for this year. Allocate overhead costs to a job that uses 40 machine hours and 30 direct labor hours. Activity Budgeted Cost Activity Cost Driver Budgeted Activity Usage Cutting $ 56,000 Machine hours (MH) 2,000 machine hours Assembly 240,000 Direct labor hours (DLH) 6,000 direct labor hours Total $ 296,000
- Berkeley Bank reports the following information about resources in two functions. Cost Driver Rate $ 0.01 per transaction $ 250 per account Resources used Process transactions Process accounts Resources supplied Process transactions Process accounts $675,000 $360,000 Required: Compute unused resource capacity at Berkeley Bank. Process transactions Process accounts Unused Resource Capacity Cost Driver Volume 40,000,000 transactions 950 accountsPanamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below. Activity Cost Activity Base Procurement $364,200 Number of purchase orders Scheduling 243,400 Number of production orders Materials handling 417,300 Number of moves Product development 773,900 Number of engineering changes Production 1,428,300 Machine hours Number of Number of Number Number of Number Purchase Production of Engineering Machine of Orders Orders Moves Changes Hours Units Disk drives 4,120 270 1,500 11 2,200 2,100 Tape drives 2,400 245 500 7 8,500 3,500 Wire drives 11,500 790 3,500 21 10,700 2,400 The activity-based cost for each tape drive unit is Oa. $291.69 Ob. $239.52 Oc. $740.06 Od. $20.21Dawson Company manufactures small table lamps and desk lamps. The following shows the activities per product and the total overhead information: Units Setups Inspections Assembly (dlh) Small table lamps 2,500 3,400 8,550 40,400 Desk lamps 10,500 6,800 14,250 40,400 Activity Total Activity-Base Usage Budgeted Activity Cost Setups 10,200 $92,820 Inspections 22,800 118,560 Assembly (dlh) 70,700 282,800 The total factory overhead to be allocated to each unit of small table lamps is a.$132.72 b.$56.88 c.$161.16 d.$94.80
- Silven Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity $138,000 Number of setups 10,200 Number of orders 92,400 Machine hours 18,480 Receiving hours phones with the following expected activity demands: Setting up equipment Ordering materials Machining Receiving Silven produces two models of cell Model X 5,000 80 200 6,600 385 Units completed Number of setups Number of orders Machine hours Receiving hours Required: Model Y 10,000 40 400 4,950 770 120 600 11,550 1,155Multiple Versus Single Overhead Rates, Activity Drivers Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Expected Cost Activity Driver Activity Capacity Number of setups Number of orders Machine hours Activity Setting up equipment $491,050 Ordering costs 336,600 Machine costs 898,800 Receiving 362,600 Receiving hours Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B $843,000 $455,000 8,200 1,600 Direct materials Direct labor Units completed Direct labor hours Number of setups Number of orders Machine hours $563,000 $459,000 15,600 6,800 360 6,900 23,900 3,200 The company's normal activity is 8,400 direct labor hours. Receiving hours 250 12,900 18,900 6,600 610 19,800 42,800 9,800Factory depreciation Indirect labor Factory electricity Indirect materials Selling expenses Administrative expenses Total costs Tortilla chips Potato chips Factory overhead is allocated to the three products on the basis of processing hours. The products had the following production budget and processing hours per case: Budgeted Volume Processing Hours (Cases) Per Case Pretzels Total Tortilla chips Potato chips $24,012 59,508 6,000 6,000 1,200 13,200 Pretzels 6,786 14,094 33,408 18,792 $156,600 Total If required, round all per-case answers to the nearest cent. a. Determine the single plantwide factory overhead rate. per processing hour 0.12 0.15 b. Use the overhead rate in (a) to determine the amount of total and per-case overhead allocated to each of the three products under generally accepted accounting principles. Total Per-Case Factory Overhead Factory Overhead 0.10
- Merlin Company provides the following ABC costing information: Activities Total Costs Activity-cost drivers Account inquiry hours $200,000 10,000 hours Account billing lines $140,000 4,000,000 lines Account verification accounts $75,000 40,000 accounts Correspondence letters $25,000 4,000 letters Total costs $440,000 The above activities are used by Departments A and B as follows: Department A Department B Account inquiry hours 2,000 hours 4,000 hours Account billing lines 400,000 lines 200,000 lines Account verification accounts 10,000 accounts 8,000 accounts Correspondence letters 1,000 letters 1,600 letters Required: a. How much of the correspondence costs will be assigned to Department B? b. How much of the total costs will be assigned to Department A?Premium Company provides the following ABC costing information: Activities Total Costs Activity-cost drivers Account inquiry $200,000 10,000 hours Account billing $140,000 4,000,000 lines Account verification accounts $75,000 40,000 accounts Correspondence letters $ 25,000 4,000 letters Total costs $440,000 The above activities are used by Departments A and B as follows: Department A Department B Account inquiry hours 2,500 hours 4,000 hours Account billing lines 400,000 lines 250,000 lines Account verification accounts 10,000 accounts 8,000 accounts Correspondence letters 1,200 letters 1,600 letters 1- How much of account verification costs will be assigned to Department A? 2- How much of the total costs will be assigned to department B?Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below. Activity Cost Activity Base Procurement $364,500 Number of purchase orders Scheduling 226,800 Number of production orders Materials handling 462,100 Number of moves Product development 705,600 Number of engineering changes Production 1,585,000 Machine hours Number ofPurchaseOrders Number ofProductionOrders NumberofMoves Number ofEngineeringChanges MachineHours NumberofUnits Disk drives 4,020 430 1,430 13 2,300 1,700 Tape drives 1,600 125 800 6 9,000 4,400 Wire drives 11,400 870 3,800 25 11,000 3,000 The activity rate for the procurement activity cost pool is a.$255.79 per purchase order b.$21.42 per purchase…
