Required information Acoma Co. has identified one of its cost pools to be quality control and has assigned $165,000 to that pool. Number of inspections has been chosen as the cost driver for this pool; Acoma performs 25,500 inspections annually. Suppose Acoma manufactures two products that consume 7,650 (Product 1) and 17,850 (Product 2) inspections each. Using activity rates, determine the amount of quality control cost to be assigned to each of Acoma's product lines. (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.) Quality Control Costs Product 1 Product 2

Required information Acoma Co. has identified one of its cost pools to be quality control and has assigned $165,000 to that pool. Number of inspections has been chosen as the cost driver for this pool; Acoma performs 25,500 inspections annually. Suppose Acoma manufactures two products that consume 7,650 (Product 1) and 17,850 (Product 2) inspections each. Using activity rates, determine the amount of quality control cost to be assigned to each of Acoma's product lines. (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.) Quality Control Costs Product 1 Product 2

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

ABC Ltd manufactures two products: Basic and Deluxe. The company expects to produce andsell 1,100 units of Basic and 1,600 units of Deluxe during the current year.Currently in the traditional costing system, the company has been using direct labour hours asthe single cost driver for allocation of manufacturing overheads to products. The budgetedmanufacturing overheads for the next period are $35,000.The company is considering to implement the activity-based costing (ABC) system. Theaccountant has analysed the budgeted production overheads and identified various costs inactivity centres with appropriate cost drivers:Activity Centre Costs Cost DriverMaintenance costs $7,000 Direct labour hoursSet up costs $12,000 Number of production runQuality inspections $7,020 Number of inspectionsStores receiving $3,480 Number of component deliveriesStores issues $5,500 Number of issues$35,000The analysis also revealed the following information:Basic DeluxeDirect materials cost per unitDirect labour…
Mission Company is preparing its annual profit plan. As part of its analysis of the profitability of individual products, the controller estimates the amount of overhead that should be allocated to the individual product lines from the information provided below (CMA adapted) Units produced Material moves per product line. Direct labor-hours per product line Budgeted material handling costs: $644,000 Wall Mirrors Specialty Windows 220 20 5 1,100 60 1,200 Under a traditional costing system that allocates overhead on the basis of direct labor-hours, the materials handling costs allocated to one unit of Specialty Windows would be Multiple Choice O $16.800 $54,900 $14,000 $22.700
Founder Consulting Corporation has its headquarters in Memphis and operates from three branch offices in Nashville, Atlanta, and Louisville. Two of the company's activity cost pools are Administrative Service and Development Service. These costs are allocated to the three branch offices using an activity-based costing system. Information for next year follows: Activity Cost Pool Activity Measure Estimated Cost Administrative service % of time devoted to branch $ 1,680,000 Development service Computer time $ 630,000 Estimated branch data for next year is as follows: Time to branch Computer time Nashville 70 % 1,600,000 minutes Atlanta 20 % 1,200,000 minutes Louisville 10 % 400,000 minutes Total 100 % 3,200,000 minutes How much of the headquarters cost allocation should Nashville expect to receive next year?
Required information Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] Textra produces parts for a machine manufacturer. Parts go through two departments, Molding and Trimming. The company budgets overhead cost of $246,250 in the Molding department and $206,250 in the Trimming department. The company budgets 16,000 machine hours (MH) in Molding and 25,000 direct labor hours (DLH) in Trimming. Actual production information follows. Number of Molding Department Units Hours per Unit Total Hours Trimming Department Hours per Unit Total Hours Part Z Part X Totals 3,000 2.0 MH per unit 4,000 2.5 MH per unit 6,000 MH 10,000 MH 16,000 MH 3 DLH per unit 9,000 DLH 4 DLH per unit 16,000 DLH 25,000 DLH Exercise 17-7 (Algo) Plantwide overhead rate LO P1 Required: 1. Compute the plantwide overhead rate using direct labor hours as the allocation base. 2. Determine the overhead cost per unit for each part using the…
The management of Firebolt Industries Inc. manufactures gasoline and diesel engines through two production departments, Fabrication and Assembly. Management needs accurate product cost information in order to guide product strategy. Presently, the company uses a single plantwide factory overhead rate for allocating factory overhead to the two products. However, management is considering the multiple production department factory overhead rate method. The following factory overhead was budgeted for Firebolt:1Fabrication Department factory overhead$614,800.002Assembly Department factory overhead246,750.003Total$861,550.00Direct labor hours were estimated as follows:Fabrication Department 5,300 hoursAssembly Department 5,250 Total 10,550 hoursIn addition, the direct labor hours (dlh) used to produce a unit of each product in each department were determined from engineering records, as follows:Production Departments Gasoline Engine Diesel EngineFabrication Department 2.9 dlh 1.8…
Required information [The following information applies to the questions displayed below.] Benton Corporation manufactures computer microphones, which come in two models: Standard and Premium. Data for a representative quarter for the two models follow: Units produced Production runs per quarter Direct materials cost per unit Direct labor cost per unit Standard 11,600 Premium 2,900 50 $ 30 50 25 $ 64 75 Manufacturing overhead in the plant has three main functions: supervision, setup labor, and incoming material inspection. Data on manufacturing overhead for a representative quarter follow: Supervision Setup labor Incoming inspection Total overhead $ 239,250 278,400 200,100 $ 717,750 Required: a. Compute the unit costs for the two products, Standard and Premium, using the current costing system at Benton (using direct labor costs as the allocation basis for overhead). b. Compute the unit costs for the two products, Standard and Premium, using the proposed ABC system at Benton. Note: For…
i need the answer quickly
A company estimates that it will incur $3300000 of overhead each year in three departments: Processing, Packaging, and Testing. The company performs 800 processing transactions, 200000 packaging transactions, and 2000 tests per year in producing 400000 drums of product Oil and 600000 drums of product Sludge. The following data are available: Activity Cost Pool Estimated Use of Driver Processing 800 Packaging Testing 200000 2000 $1796250. $1503750. $1230000. $1650000. Cost 300 $1350000 Production information for the two products is as follows: 120000 1600 1350000 Oil Sludge Activity Cost Pool Estimated Use of Driver Estimated Use of Driver Processing 500 Packaging Testing 600000 The amount of overhead assigned to Sludge using ABC is 80000 400
Maxey & Sons manufactures two types of storage cabinets-lype A and Type B-and applies manufacturing overhead to all units at the rate of $120 per machine hour. Production information follows. Descriptions Anticipated volume (units) Direct-material cost per unit Direct-labor cost per unit Descriptions The controller, who is studying the use of activity-based costing, has determined that the firm's overhead can be identified with three activities: manufacturing setups, machine processing, and product shipping. Data on the number of setups, machine hours, and outgoing shipments, which are the activities' three respective cost drivers, follow. Setups Machine hours Outgoing shipments Type A 140 48,000 200 Required 1 Type A 24,000 $28 33 Required 2 Required 3 The firm's total overhead of $13,860,000 is subdivided as follows: manufacturing setups, $3,024,000; machine processing. $8,316,000; and product shipping, $2,520,000. Required: 1. Compute the unit manufacturing cost of Type A and Type B…
Your Companey has two service departments – Personnel and Maintenance. The Maintenance Department's costs of $160,000 are allocated on the basis of standard hours used. The Personnel Department's costs of $40,000 are allocated based on the number of employees. The costs of the operating Departments A and B are $80,000 and $120,000, respectively. Data on standard service hours and number of employees are as follows: Standard Service Maintenance Dept. Personnel Dept. Production Depts. A B Hours used - 400 480 320 Number of Employees 20 - 80 240 What is the cost of the Maintenance Department allocated to Department B using the direct method? What is the cost of the…
Barnett Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below. Activity Cost Cost Driver Material handling $ 281,000 Number of parts Material insertion 3,060,000 Number of parts Automated machinery 873,000 Machine hours Finishing 194,000 Direct labor hours Packaging 194,000 Orders shipped Total $ 4,602,000 The following information pertains to the three product lines for next year: Economy Standard Deluxe Units to be produced 14,300 9,700 2,600 Orders to be shipped 1,910 580 270 Number of parts per unit 15 20 25 Machine hours per unit 1 2 5 Labor hours per unit 3 3 3 What is Barnett’s pool rate…
Mack Precision Tool and Die has two production departments, Fabricating and Finishing, and two service departments, Repair and Quality Control. Direct costs for each department and the proportion of service costs used by the various departments for the month of March follow: Department Fabricating Finishing Repair Quality Control Required A Required B Direct Costs Repair $ 136,600 102, 200 43,800 81,800 Required: Use the step method to allocate the service costs, using the following: From: a. The order of allocation starts with Repair. b. The allocations are made in the reverse order (starting with Quality Control). Service department costs Repair Quality control Total costs allocated Complete this question by entering your answers in the tabs below. $ $ Repair Proportion of Services Used by Quality Control 0 0.8 Use the step method to allocate the service costs, using the following: The order of allocation starts with Repair. Note: Amounts to be deducted should be indicated by a minus…