Silven Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost $141,000 19,800 103,950 16,470 Setting up equipment Ordering materials Machining Receiving Units completed Number of setups Number of orders Machine hours Receiving hours Required: Silven produces two models of cell phones with the following expected activity demands: Model X Model Y Model X Model Y 5,400 80 300 6,600 305 165,490 115,730 Model X Model Y Activity Driver Activity Capacity Number of setups Number of orders 1. Determine the total overhead assigned to each product using the four activity drivers. Total Overhead Assigned Machine hours Receiving hours Percentage Error 120 900 11,550 915 10,800 40 600 4,950 610 2. Determine the total overhead assigned to each model using the two most expensive activities. The costs of the two relatively inexpensive activities are allocated to the two expensiv decimal places and round your final answers to the nearest dollar. 6.42 X % -9.18 X % Total Overhead Assigned Model X Model Y 176,114 X 105,106 X 3. Using ABC as the benchmark, calculate the percentage error. Round your answers to two decimal places.
Silven Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost $141,000 19,800 103,950 16,470 Setting up equipment Ordering materials Machining Receiving Units completed Number of setups Number of orders Machine hours Receiving hours Required: Silven produces two models of cell phones with the following expected activity demands: Model X Model Y Model X Model Y 5,400 80 300 6,600 305 165,490 115,730 Model X Model Y Activity Driver Activity Capacity Number of setups Number of orders 1. Determine the total overhead assigned to each product using the four activity drivers. Total Overhead Assigned Machine hours Receiving hours Percentage Error 120 900 11,550 915 10,800 40 600 4,950 610 2. Determine the total overhead assigned to each model using the two most expensive activities. The costs of the two relatively inexpensive activities are allocated to the two expensiv decimal places and round your final answers to the nearest dollar. 6.42 X % -9.18 X % Total Overhead Assigned Model X Model Y 176,114 X 105,106 X 3. Using ABC as the benchmark, calculate the percentage error. Round your answers to two decimal places.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:Approximately Relevant ABC
Silven Company has identified the following overhead activities, costs, and activity drivers for the coming year:
Activity
Expected Cost
Setting up equipment
$141,000
Ordering materials
19,800
103,950
Machining
Receiving
16,470
Units completed
Number of setups
Number of orders
Machine hours
Receiving hours
Required:
Silven produces two models of cell phones with the following expected activity demands:
Model X
Model Y
Model X
Model Y
5,400
80
300
6,600
305
Model X
Model Y
Activity Driver Activity Capacity
Number of setups
Number of orders
Machine hours
Receiving hours
1. Determine the total overhead assigned to each product using the four activity drivers.
Total Overhead Assigned
165,490 ✔
115,730 ✓
Model X
Model Y
120
900
10,800
40
600
4,950
610
2. Determine the total overhead assigned to each model using the two most expensive activities. The costs of the two relatively inexpensive activities are allocated to the two expensive activities in proportion to their costs. Round interim calculations to two
decimal places and round your final answers to the nearest dollar.
Percentage Error
11,550
915
Total Overhead Assigned
176,114 X
105,106 X
3. Using ABC as the benchmark, calculate the percentage error. Round your answers to two decimal places.
6.42 X %
-9.18 X %
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