Steampunk Corporation has the following predicted indirect costs and cost drivers for 2019 for the given activity cost pools: Fabrication Finishing Department Department Cost Driver Maintenance $ 36.000 18.000 Machine hours Materials handling 54000 27,000 Material moves Machine 126.000 9,000 Machine setups Inspections 45.000 Inspection hours 2 99,000 Total $216.000 The following activity predictions were also made for the year: Fabrication Finishing Department Department Machine hours Material moves Machine setups 5.000 2500 1.500 750 350 25 Inspection hours It is assumed that the cost per unit of activity for a given activity does not vary between departments. Steampunk's president, Abner Punk, is trying to evaluate the company's product mix strategy regarding two of its product models, SW100 and SG150. The company has been using a company wide overhead rate based on machine hours but is considering switching to either department rates of activity-based rates. The production manager has provided the following data for the production of a batch of 100 units for each of these models: 500 SW100 SG150 Direct materials cost $ 12.000 S 18.000 Direct labor cost $4.800 5 3.600 Machine hours (Fabrication) 250 350 Machine hours (Finishing) Materials moves Machine setups 100 50 20 40 10 Inspection hours 15 30 a. Determine the cost of one unit each of SW100 and SG150, assuming a company-wide overhead rate is used based on total machine hours. Round rate to two decimal places. Overhead rate based on total machine hours: $ 0 per machine hour Use rounded overhead rate calculated about for calculations below. Round cost answers to the nearest whole number. Round cost per unit to two decimal places. Product Costs per Unit SW100 SG150 Direct materials Direct labor Manufacturing overhead 0: Total cost per batch is OS Number of units per batch Cost per unit
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
How do I determine the cost of one unit of SW 100 and SG 150, assuming department
![Steampunk Corporation has the following predicted indirect costs and cost drivers for 2019 for the given activity cost pools:
Fabrication Finishing
Department Department
Cost Driver
Maintenance
$ 36,000
18,000 Machine hours
Materials handling
54,000
27,000 Material moves
Machine
126,000
9,000 Machine setups
Inspections
45,000 Inspection hours
Total
$ 216,000
$ 99,000
The following activity predictions were also made for the year:
Fabrication Finishing
Department Department
Machine hours
5,000
2,500
Material moves
1,500
750
Machine setups
350
25
Inspection hours
500
It is assumed that the cost per unit of activity for a given activity does not vary between departments. Steampunk's president, Abner Punk, is trying to evaluate the company's product mix strategy regarding two of its product models, SW100 and SG150. The
company has been using a company wide overhead rate based on machine hours but is considering switching to either department rates of activity-based rates. The production manager has provided the following data for the production of a batch of 100 units for
each of these models:
SW100
SG150
Direct materials cost
$ 12,000 $ 18,000
Direct labor cost
$ 4,800 $3,600
Machine hours (Fabrication)
250
350
Machine hours (Finishing)
100
50
Materials moves
20
40
Machine setups
5
10
Inspection hours
15
30
a. Determine the cost of one unit each of SW100 and SG150, assuming a company-wide overhead rate is used based on total machine hours.
Round rate to two decimal places.
Overhead rate based on total machine hours: $ 0
per machine hour
Use rounded overhead rate calculated about for calculations below. Round cost answers to the nearest whole number. Round cost per unit to two decimal places.
Product Costs
per
Unit
SW100
SG150
Direct materials
24
0.
Direct labor
0.
0.
Manufacturing overhead
0.
0.
Total cost per batch
0.
Number of units per batch
0.
0.
Cost
per unit
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