Rusties Company recently implemented an activity-based costing system. At the beginning of the year, management made the following estimates of cost and activity in the company's five activity cost pools: Activity Pool Cost Activity Measure Expected Cost Overhead Expected Activity Labor-related Purchase orders Number of orders $1,050 Direct labor-hours $18,000 2,000 DLHs 525 orders Product testing Number of tests $3,500 350 tests Template Number of $700 etching templates 28 templates $50,000 10,000 MHs General factory Machine-hours Required: Compute the activity rate for each of the activity cost pools.

Rusties Company recently implemented an activity-based costing system. At the beginning of the year, management made the following estimates of cost and activity in the company's five activity cost pools: Activity Pool Cost Activity Measure Expected Cost Overhead Expected Activity Labor-related Purchase orders Number of orders $1,050 Direct labor-hours $18,000 2,000 DLHs 525 orders Product testing Number of tests $3,500 350 tests Template Number of $700 etching templates 28 templates $50,000 10,000 MHs General factory Machine-hours Required: Compute the activity rate for each of the activity cost pools.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 60P: Scattergraph, High-Low Method, and Predicting Cost for a Different Time Period from the One Used to...

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Required information [The following information applies to the questions displayed below.] Adria Company recently implemented an activity-based costing system. At the beginning of the year, management made the following estimates of cost and activity in the company's five activity cost pools: Expected Activity Overhead Expected Activity 6,500 DLHS 2,400 orders 700 receipts 1,400 relays 41,000 MHs Activity Cost Pool Labor-related Purchase orders Measure Cost $ 58,500 $ 12,000 $ 11, 200 $ 14,000 $369, 000 Direct labor-hours Material receipts Relay assembly General factory Number of orders Number of receipts Number of relays Machine-hours Required: 1. Compute the activity rate for each of the activity cost pools. Activity Cost Pool Activity Rate Labor-related per DLH Purchase orders per order Material receipts per receipt Relay assembly per relay General factory per MH
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Sultan Company uses an activity-based costing system. At the beginning of the year, the company made the following estimates of cost and activity for its five activity cost pools: Activity Cost Pool Activity Measure ExpectedOverhead Cost Expected Activity Labor-related Direct labor-hours $ 148,000 29,600 DLHs Purchase orders Number of orders $ 15,180 253 orders Parts management Number of part types $ 85,680 102 part types Board etching Number of boards $ 99,550 1,810 boards General factory Machine-hours $ 162,400 20,300 MHs Required: 1. Compute the activity rate for each of the activity cost pools. 2. The expected activity for the year was distributed among the company’s four products as follows: Expected Activity Activity Cost Pool Product A Product B Product C Product D Labor-related (DLHs) 7,900 12,800 3,900 5,000 Purchase orders (orders) 75 39 45 94 Parts management (part types) 30 13…
Sultan Company uses an activity-based costing system. At the beginning of the year, the company made the following estimates of cost and activity for its five activity cost pools: Activity Cost Pool Activity Measure Expected Overhead Cost Expected Activity Labor-related Direct labor-hours $ 184,800 30,800 DLHs Purchase orders Number of orders $ 6,900 230 orders Parts management Number of part types $ 81,120 104 part types Board etching Number of boards $ 45,000 1,800 boards General factory Machine-hours $ 150,300 16,700 MHs Required: 1. Compute the activity rate for each of the activity cost pools. 2. The expected activity for the year was distributed among the company’s four products as follows: Activity Cost Pool Expected Activity Product A Product B Product C Product D Labor-related (DLHs) 7,000 14,300 4,400 5,100 Purchase orders (orders) 58 26 46 100 Parts management (part types) 30 18 37 19 Board etching (boards) 500 720 580 0 General factory…
[The following information applies to the questions displayed below.] Adria Company recently implemented an activity-based costing system. At the beginning of the year, management made the following estimates of cost and activity in the company's five activity cost pools: Expected Activity Overhead Expected Activity 6,500 DLHS 2,400 orders 700 receipts 1,400 relays 41,000 MHS Activity Cost Pool Labor-related Measure Cost $ 58,500 $ 12,000 $ 11, 200 $ 14,000 $369,000 Direct labor-hours Purchase orders Number of orders Material receipts Relay assembly General factory Number of receipts Number of relays Machine-hours 2. The expected activity for the year was distributed among the company's four products as follows: Expected Activity Activity Cost Pool Labor-related (DLHS) Purchase orders (orders) Materials receipts (receipts) Relay assembly (relays) General factory (MHs) Product A Product B Product C Product D 2,400 500 2,600 720 700 800 850 330 400 118 182 340 340 280 440 16,250 5,400…
Sultan Company uses an activity - based costing system. At the beginning of the year, the company made the following estimates of cost and activity for its five activity cost pools: [[Activity Cost Pool, Activity Measure, [[Expected], [Overhead Cost]], Expected Activity], [Labor-related, Direct labor - hours, 270, 900, 30, 100 DLHS], [Purchase order's, Number of orders, 11,745,261 orders], [Parts management, Number of part types, 78,570,97 part types], [Board etching, Number of boards, 72, 400, 1,810 boards], [ General factory, Machine - hours, 212, 400, 17,700MHs
Sultan Company uses an activity-based costing system. At the beginning of the year, the company made the following estimates of cost and activity for its five activity cost pools: Activity Cost Pool Activity Measure Expected Overhead Cost Expected Activity Labor-related Direct labor-hours $ 390,600 43,400 DLHs Purchase orders Number of orders $ 8,600 215 orders Parts management Number of part types $ 94,160 107 part types Board etching Number of boards $ 60,550 1,730 boards General factory Machine-hours $ 220,800 18,400 MHs Required: 1. Compute the activity rate for each of the activity cost pools. 2. The expected activity for the year was distributed among the company’s four products as follows: Activity Cost Pool Expected Activity Product A Product B Product C Product D Labor-related (DLHs) 5,800 28,400 4,800 4,400 Purchase orders (orders) 71 20 43 81 Parts management (part types) 28 20 42 17 Board etching (boards) 310 770 650 0 General factory…
The company is considering using a two-stage cost allocation system and wants to assess the effects on reported product profits. The company is considering using Engineering Hours and Users as the allocation base. Additional information follows. Toot! TiX Total Engineering hours 7,650 5,650 13,300 Users 9,500 17,100 26,600 Engineering – hour related administrative cost $ 114,380 User-related administrative cost $…
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Fisher Fixtures manufactures three types of lighting fixtures, with model names of Silver, Gold, and Platinum. It applies all indirect costs according to an annual predetermined rate based on direct labor-hours. The plant controller has recommended that the company switch to an activity-based costing system. The controller's staff prepared the following cost estimates for next year (year 2) for the recommended cost drivers. Activity Recommended Cost Driver Estimated Cost Estimated Cost Driver Activity Purchasing material Number of purchase orders $ 115,200 240 purchase orders Receiving material Direct materials cost 217,600 $ 2,720,000 Setting up equipment Number of production runs 211,560 120 runs Machine depreciation and maintenance Machine-hours 72,590 14,518 hours Ensuring regulatory compliance Number of inspections 423,900 54 inspections Shipping Number of units shipped 1,040,400 578,000 units Total estimated cost $ 2,081,250 In addition, management…