Study plan example 19.3 use activity-based management (ABM) to make decisions CYU19-1 Drab Dog Collars uses activity-based costing. Drab's system has the following features: Predetermined overhead Activity Allocation base Allocation rate Purchasing Assembling Packaging Number of purchase orders Number of parts $50.00 per purchase order 0.40 per part Number of finished collars .23 per collar Each collar has four parts, direct materials cost is $6.00 per collar, and direct labor cost is $4.00 per collar. Suppose Animal Hut has asked for a bid on 35,000 dog collars. Drab will issue a total of 100 purchase orders if Animal Hut accepts Drab's bid. 1. Compute the total estimated cost Drab will incur to purchase the needed materials and then assemble and package 35,000 dog collars. Also compute the cost per collar. 2. For bidding, Drab adds a 20% markup to total cost. What total price will the company bid for th entire Animal Hut order?
Study plan example 19.3 use activity-based management (ABM) to make decisions CYU19-1 Drab Dog Collars uses activity-based costing. Drab's system has the following features: Predetermined overhead Activity Allocation base Allocation rate Purchasing Assembling Packaging Number of purchase orders Number of parts $50.00 per purchase order 0.40 per part Number of finished collars .23 per collar Each collar has four parts, direct materials cost is $6.00 per collar, and direct labor cost is $4.00 per collar. Suppose Animal Hut has asked for a bid on 35,000 dog collars. Drab will issue a total of 100 purchase orders if Animal Hut accepts Drab's bid. 1. Compute the total estimated cost Drab will incur to purchase the needed materials and then assemble and package 35,000 dog collars. Also compute the cost per collar. 2. For bidding, Drab adds a 20% markup to total cost. What total price will the company bid for th entire Animal Hut order?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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see enclosed jpeg please. Explain as clear as possible how you come to the solution.
Transcribed Image Text:Study plan example 19.3 use activity-based management (ABM) to make decisions CYU19-1
Drab Dog Collars uses activity-based costing. Drab's system has the following features:
Predetermined overhead
Activity
Allocation base
Allocation rate
Purchasing
Assembling
Packaging
Number of purchase orders
Number of parts
$50.00 per purchase order
0.40 per part
Number of finished collars
.23 per collar
Each collar has four parts, direct materials cost is $6.00 per collar, and direct labor cost is $4.00 per
collar. Suppose Animal Hut has asked for a bid on 35,000 dog collars. Drab will issue a total of 100
purchase orders if Animal Hut accepts Drab's bid.
1. Compute the total estimated cost Drab will incur to purchase the needed materials and then
assemble and package 35,000 dog collars. Also compute the cost per collar.
2. For bidding, Drab adds a 20% markup to total cost. What total price will the company bid for the
entire Animal Hut order?
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