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: Standard Premium Units produced 15,200 Production runs per quarter 50 3,800 25 Direct materials cost per unit $ 30 50 $ 64 75 Direct labor cost per unit 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 $ 313,500 364,800 262,200 $ 940,500 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 all requirements, do not round intermediate calculations. Round your answers to 2 decimal places. a. Using current costing system b. Using proposed ABC system Unit cost Standard Premium

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: Standard Premium Units produced 15,200 Production runs per quarter 50 3,800 25 Direct materials cost per unit $ 30 50 $ 64 75 Direct labor cost per unit 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 $ 313,500 364,800 262,200 $ 940,500 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 all requirements, do not round intermediate calculations. Round your answers to 2 decimal places. a. Using current costing system b. Using proposed ABC system Unit cost Standard Premium

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 7E: The management of Nova Industries Inc. manufactures gasoline and diesel engines through two...

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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 11,280 50 Premium 2,800 25 $ 30 50 $ 54 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 $ 231,000 257,258 193,200 $ 681,150 Show Transcribed Text Required: a. Benton currently applies overhead on the basis of direct labor cost. What is the predetermined overhead rate for the quarter? b. The CFO and the plant controller at Benton are thinking of adopting an ABC system. They have tentatively chosen the following cost drivers:…
[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 Supervision Setup labor Incoming inspection Total overhead 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: Standard 10,400 50 $ 30 50 $ 214,500 249,600 179,400 $ 643,500 a. Overhead rate b. Supervision b. Setup labor b. Incoming inspection Premium 2,600 25 $ 64 75 Required: a. Benton currently applies overhead on the basis of direct labor cost. What is the predetermined overhead rate for the quarter? b. The CFO and the plant controller at Benton are thinking of adopting an ABC system. They have tentatively chosen the…
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 Standard 10,000 Premium 2,500 Production runs per quarter 50 25 Direct materials cost per unit $ 30 $ 64 Direct labor cost per unit 50 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 $ 206,250 240,000 172,500 $ 618,750 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…
! 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 Supervision Setup labor Incoming inspection Total overhead 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: Standard 11,600 50 $30 50 $ 239,250 278,400 200, 100 $ 717,750 a. Overhead rate b. Supervision b. Setup labor b. Incoming inspection Premium 2,900 25 $ 64 75 Required: a. Benton currently applies overhead on the basis of direct labor cost. What is the predetermined overhead rate for the quarter? b. The CFO and the plant controller at Benton are thinking of adopting an ABC system. They have…
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Required information [The following information applies to the questions displayed below.] Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow: Rims Posts Direct Labor- Hours per unit 0.70 0.80 Annual Production Additional information about the company follows: a. Rims require $14 in direct materials per unit, and Posts require $10. b. The direct labor wage rate is $20 per hour. Activity Cost Pool Machine setups Special processing General factory 26,000 units 90,000 units c. Rims are more complex to manufacture than Posts and they require special equipment. d. The ABC system has the following activity cost pools: Unit product cost of Rims Unit product cost of Posts Activity Measure Number of setups Machine-hours Direct labor-hours Estimated Overhead Cost $ 33,300 $ 172,800 $ 858,000 Estimated Activity Rims 70 3,000 18,200 Posts 230 0 72,000 Total 300 3,000 90,200 2. Determine the unit product cost of each product…
Schell Company manufactures automobile floor mats. It currently has two product lines, the Standard and the Deluxe. Suppose that Schell has conducted further research into its overhead and potential cost drivers. As a result, the company has compiled the following detailed information, breaking total overhead into three activity pools: Activity Pools Material handling Quality control Machine maintenance Req 1 Cost Driver Number of moves Number of inspections Number of machine hours Req 2 and 3 Required: 1. Calculate the activity rates for each activity pool assuming Schell uses an ABC system. 2. Calculate the amount of overhead that Schell will assign to the Standard floor mat line. 3. Determine the amount of overhead Schell will assign to the Deluxe product line. Complete this question by entering your answers in the tabs below. Material Handling Quality Control Machine maintenance Cost Assigned to Pool Activity Rate $ 2,068.00 $ 8,640.00 $ 14,120.00 Calculate the activity rates for…
Required information [The following information applies to the questions displayed below.] Rustafson Corporation is a diversified manufacturer of consumer goods. The company's activity-based costing system has the following seven activity cost pools: Estimated Overhead Cost $ 26,800 Expected Activity 5,000 direct labor-hours 9,000 machine-hours. 1,100 setups Activity Cost Pool Labor-related Machine-related $ 4,500 Machine setups $ 41,800 Production orders $ 17,000 Product testing $ 15,500 Packaging $ 51,000 General factory $ 52,400 5,000 direct labor-hours 500 orders 500 tests 3,400 packages 2. Compute the company's predetermined overhead rate, assuming that the company uses a single plantwide predetermined overhead rate based on direct labor-hours. (Round your answer to 2 decimal places.) Predetermined overhead rate per DLH
Hercules Inc. manufactures elliptical exercise machines and treadmills. The products are produced in its Fabrication and Assembly production departments. In addition to production activities, several other activities are required to produce the two products. These activities and their associated activity rates are as follows: Activity Activity Rate Fabrication $31 per machine hour Assembly $17 per direct labor hour Setup $58 per setup Inspecting $29 per inspection Production scheduling $18 per production order Purchasing $15 per purchase order The activity-base usage quantities and units produced for each product were as follows: Activity Base Elliptical Machines Treadmill Machine hours 1,741 1,027 Direct labor hours 440 172 Setups 54 17 Inspections 719 431 Production orders 69 14 Purchase orders 200 122 Units produced 278 186 Use the activity rate and usage information to determine the total activity cost and activity…
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Atlas Enterprises Inc. manufactures elliptical exercise machines and treadmills. The products are produced in its Fabrication and Assembly production departments. In addition to production activities, several other activities are required to produce the two products. These activities and their associated activity rates are as follows: Activity Activity Rate Fabrication $27 per machine hour Assembly $11 per direct labor hour Setup $51 per setup Inspecting $29 per inspection Production scheduling $12 per production order Purchasing $9 per purchase order The activity-base usage quantities and units produced for each product were as follows: Activity Base Elliptical Machines Treadmill Machine hours 1,813 1,070 Direct labor hours 474 185 Setups 58 18 Inspections 682 409 Production orders 68 14 Purchase orders 193 118 Units produced 286 192 Use the activity rate and usage information to calculate the total activity cost and…