Volume-based method of overhead cost allocation Required:-Allocate costs to products on the basis of labour hours-Over head cost rate =- Please write the formula or equation Company Z has 2 service centres and 2 production centresThe company use labor hours as the base for allocating costs of production centre A and space occupiedas the base for allocating costs of production centre BService CentresProduction centresABXYOver head costs100,000150.000220,000340,00050Labor hours (hrs)40250200500180300Space occupied (Square metres)240Production centre XProduction centre YXIX2YIY2DMC (S/unit)1530Direct labour hours (hrs)- $3/hr818Total units produced8005,0001861.20036203,500

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Description: Volume-based method of overhead cost allocation Required:-Allocate costs to products on the basis of labour hours-Over head cost rate =- Please write the formula or equation Company Z has 2 service centres and 2 production centresThe company use labo

Company Z has two service centers and two production centers. Now production centers have output in…

Answered: Required: -Allocate costs to products…

Business

Accounting

Required: -Allocate costs to products on the basis of labour hours -Over head cost rate = - Please write the formula or equation

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 2PB: The following product costs are available for Kellee Company on the production of eyeglass frames:...

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Wrappers Tape makes two products: Simple and Removable. It estimates it will produce 369,991 units of Simple and 146,100 of Removable, and the overhead for each of its cost pools is as follows: It has also estimated the activities for each cost driver as follows: Â How much is the overhead allocated to each unit of Simple and Removable?
The following product costs are available for Kellee Company on the production of eyeglass frames: direct materials, $32,125; direct labor, $23.50; manufacturing overhead, applied at 225% of direct labor cost; selling expenses, $22,225; and administrative expenses, $31,125. The direct labor hours worked for the month are 3,200 hours. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? E. If 6.425 equivalent units are produced, what is the equivalent material cost per unit? F. What is the equivalent conversion cost per unit?
Exercise 7-4 (Algo) Second-Stage Allocation [LO7-4] Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Machine processing Machine setups Number of units produced per year Direct labor-hours Activity Rate $ 11 per direct labor-hour $5 per machine-hour $ 45 Production orders Shipments $ 120 per shipment Product sustaining $ 900 per product Activity data have been supplied for the following two products: Machine-hours Machine setups Production orders Shipments Product sustaining per setup $ 160 per order Total Expected Activity K425 M67 2,000 200 1,025 2,600 7 7 14 3 50 40 3 3 3 3 Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system?
Lion Corporation uses an activity-based costing system to assign overhead costs to products. In the first stage, two overhead costs--equipment depreciation and supervisory expense-are allocated 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 Supervisory expense Equipment depreciation Distribution of Resource Consumption Across Activity Cost Pools: Product C9 $ 47,000 Product UO $ 6,000 Total Supervisory expense 0.60 Activity Cost Pools O $18.00 per MH O $5.30 per MH O $2.82 per MH O $3.18 per MH Mac 0.60 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 data for the company's two products follow: 6,900 Order Filling 3,100 0.10 MHS (Machining) 10,000 b.20 200…
Saved Help Sav CH 07 i Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system cont following six activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Machine processing Machine setups Activity Rates $6 per direct labor-hour $ 4 per machine-hour $ 50 per setup $ 90 per order $ 14 per shipment $ 840 per product Production orders Shipments Product sustaining Activity data have been supplied for the following two products: Total Expected Activity K425 M67 Number of units produced per year Direct labor-hours 200 2,000 80 500 Machine-hours Machine setups Production orders 100 1,500 1 4 4 Shipments Product sustaining 1 10 1 Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system? DELL F3 prt sc home end F4 F5 F6
Activity Cost Pool Cost Driver EstimatedOverhead Use perProduct A Use perProduct B Machine Setups Setups $144,000 6,000 2,000 Assembly Number of Parts 71,000 25,000 46,000 Machine Maintenance Machine Hours 200,000 13,000 37,000 Compare the overhead allocation using (A) the traditional allocation method and (B) the activity-based costing method. (Hint: the traditional method uses machine hours as the allocation base.) For those boxes in which you must enter subtractive or negative numbers use a minus sign.
TB MC Qu. 7-151 (Algo) Mirabile Corporation uses activity-based ... Mirabile Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to the company's three activity cost pools-Processing. Supervising, and Other. The costs in those activity cost pools appear below. Processing Supervising $ 4,500 $ 26,640 $ 11,700 Other Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activīty data appear below: Batches MHS (Processing) (Supervising) Product MO 9,500 600 Product M5 500 600 Total 10,000 1,200 Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins. Product MO Product M5 Sales (total) Direct materials (total) Direct labor (total) $ 83,100 $ 29,800 $ 29,100 $ 96,400 $ 32,700 $ 43,000 What is the overhead cost…
Question No.5 Ivory Corporation manufactures two products (A and B). The overhead costs have been divided into four cost pools that use the following activity drivers: Product Number of Orders Number of Set-ups Number of Labor Transactions Labor Hours A B Cost per pool 20 5 Rs.15,000 35 70 Rs.8,400 1,000 1,500 Rs.120,000 75 125 Rs.40,000 Required: Compute the allocation rates for each of the activity drivers listed. Allocate the overhead cost to Product A and B using activity-based-costing. Compute the overhead rate using machine hours under the functional based costing system. Allocate the overhead cost to Product A and B using the functional-based costing system overhead rate calculated in part C.
Richard Co. has two manufacturing departments, CC and EE and two service departments’maintenance and warehouse. Richard Co., using direct method and ignores inter-servicedepartment work. With help of following information, calculate the total production overheadcosts of Departments CC and EE using the direct method of Reapportionment:CC EE Maintenance Warehouse$ $ $ $Allocated costs 16,100 30,100 13,000 6,000General costs 72,190 50,230 24,140 14,000Total 88,290 80,330 37,140 20,000Service departments' services were used as follows. CC EE Maintenance Warehouse TotalMaintenance hours used 6,000 5,100 – 800 11,900Number of Warehouserequisitions4,000 2,000 900 – 6,9003b. Star Co. produces a single product, “MM”, details of products are as follows.Per unit $Selling price 195.00Direct materials 50.00Direct labor 18.5Variable overheads 11.10Budgeted Annual fixed production overheads are $1.52 million. The Star Co. anticipates tomanufacture 1,172,000 units of the MM each year. Actual overheads…
Snowflake Company has two service departments (S1 and S2) and two producing departments (P1 and P2). Department S1 costs are allocated on the basis of number of employees, and Department S2 costs are allocated on the basis of space occupied expressed in square feet. Data on direct department costs, number of employees, and space occupied are as follows: Direct dept. costs Number of employees Space occupied P1 P2 0 S1 S2 P1 $15,000 $22,000 $55,000 0 10 2,000 If Snowflake uses the direct method, what is the ratio representing the portion of Department S2 allocated to P2? 25 5 1,000 3,000 P2 $60,000 30 7,000
Product Volume Material costper unit (R)Direct LabourCost per unit(R)Machine Timeper unit(Hours)Rubber Ball 1 000 5.00 5.50 0.35Leather Ball 700 20.00 2.00 1.00Total production Overheads are as follows:Machine department: R50 000 (machine hours is the cost driver)Set‐up costs: R5 000Ordering Costs‐materials: R2 000Handling materials: R8 000An analysis of production overhead activities for the period for the volume ofproducts manufactured revealed the following:Product # set‐ups # material orders # times material were handledRubber Ball 1 1 2Leather Ball 2 1 3Calculate the total budgeted product cost per unit for the Rubber Ball usingActivity Based Costing (ABC). Round all answers to two decimal places.
Production and sales (units) Materials cost ($) Labour cost per unit ($) at $12 per hour Machine hours (per unit) Total no. of production runs Total no. of purchase orders Total no. of deliveries to retail division Market/Retail prices Overhead costs: Machine set-up costs ($) Machine maintenance costs ($) Ordering costs ($) Delivery costs ($) Total ($) Product S Product R 3,200 5,450 117 95 9 1 12 64 80 260 total: 6 2 30 82 64 320 306,435 415,105 11,680 144,400 877,620 Rinse @ $241.69 = full cost +10% oll Retail price Rinse: $260 The company's policy is to transfer the washing machines from the assembly division to the retail division at full cost plus 10% resulting in internal transfer prices, of $220.17 and $241.69 for S and R when transferred to the retail division. The retail division sells S for $320 per machine and R for $260 per machine to the market. (a) Use activity based costing to allocate the overheads and recalculate the transfer prices for S and R. (b) Calculate the…