puestion 4.2Tuggs Corporation manufactures two products, Racket and Table. Table, having been developed as anattempt to enter a market closely related to that of Racket, has been recently created. Of the twoproducts, Table is the more complex one, thus requiring two and a half hours of direct labour time perunit to manufacture, compared to one hour of direct labour time for Racket. The table is produced onan automated production line.On the basis of direct labour hours, Overhead is currently assigned to the products. The companyestimated it would incur $364,000 in manufacturing overhead costs and produce 4,900 units of Tableand 22,100 units of Racket during the current year. Unit costs for materials and direct labour are asfollows:RacketTableDirect materials$9$20Direct labour57$15Submission Instructions:1. Compute the predetermined overhead rate under the current method of allocation and determinethe unit product cost of each product for the current year.2. The company's overhead costs can be attributed to four major activities. These activities and theamount of overhead cost attributable to each for the current year are given below:Expected ActivityEstimated Overhead Cost$161,000$32,000$81,000$90,000Activity Cost PoolMachine setups requiredRacketTableTotal8007001,500Purchase orders issued200150350Machine hours required3,9007,00010,900Maintenance requests310510820issuedTotal$364,000Determine the unit product cost of each product for the current year using the data above and anactivity-based costing approach.

Activity-based costing is the method in which cost is allocated on the basis of cost driver rates on…

Submission Instructions: 1. Compute the predetermined overhead rate under the current method of allocation and determine the unit product cost of each product for the current year. 2. The company's overhead costs can be attributed to four major activities. These activities and the amount of overhead cost attributable to each for the current year are given below: Activity Cost Pool Machine setups required Expected Activity Total 1,500 Racket Table Estimated Overhead Cost $161,000 $32,000 $81,000 800 700 Purchase orders issued 200 150 350 Machine hours required 3,900 7,000 10,900 Maintenance requests $90,000 310 510 820 issued Total $364,000 Determine the unit product cost of each product for the current year using the data above and an activity-based costing approach.

Submission Instructions: 1. Compute the predetermined overhead rate under the current method of allocation and determine the unit product cost of each product for the current year. 2. The company's overhead costs can be attributed to four major activities. These activities and the amount of overhead cost attributable to each for the current year are given below: Activity Cost Pool Machine setups required Expected Activity Total 1,500 Racket Table Estimated Overhead Cost $161,000 $32,000 $81,000 800 700 Purchase orders issued 200 150 350 Machine hours required 3,900 7,000 10,900 Maintenance requests $90,000 310 510 820 issued Total $364,000 Determine the unit product cost of each product for the current year using the data above and an activity-based costing approach.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Rex Industries has identified three different activities as cost drivers: machine setups, machine hours, and inspections. The overhead and estimated usage are: Compute the overhead rate for each activity. Round your answers to two decimal places. Overhead Overhead Annual Rate per Activity per Activity Usage Activity Machine Setups $157,850 4,100 $ Machine Hours 324,622 14,114 2$ Inspections 119,000 3,400
Assume a company manufactures only two products—14,000 units of Product C and 6,000 units of Product D. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to three cost pools. The following additional information is available for the company as a whole and for Products C and D: Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity Machining Machine-hours $ 300,000 15,000 MH Machine setups Number of setups $ 150,000 200 Setups Product design Number of products $ 78,000 2 Products Activity Measure Product C Product D Machine-hours 9,000 6,000 Number of setups 50 150 Number of products 1 1 Using the ABC system, how much total overhead cost would be assigned from all of the activities to Product D? Multiple Choice $271,500 $261,500 $301,500 $251,500
Labour data for making one unit of finished product in Waterway Company are as follows: (1) Price-hourly wage rate $10.00, payroll taxes $0.80, and fringe benefits $1.60. (2) Quantity-actual production time 1.40 hours, rest periods and cleanup 0.50 hours, and set-up and downtime 0.40 hours. Calculate the following: (Round calculations and final answers to 2 decimal places, e.g. 15.25.) a. Standard direct labour rate per hour $enter a dollar amount rounded to 2 decimal places b. Standard direct labour hours per unit enter a number of hours rounded to 2 decimal places hours c. Standard labour cost per unit Senter a dollar amount rounded to 2 decimal places
Dog
Use three different activities as cost drivers, machine setups, machine hours, and inspections to compute the overhead rate for each activity. Activity Overhead per Activity Annual Usage Machine Setups $75,000 6,000 Machine Hours $85,002 5,484 Inspections 70,000 20,000
The following is the total overhead cost at various levels of activity for McRoy Company: Total Overhead Cost $222,000 $246,000 $198,000 $174,000 February March April May Direct Labour Hours 80,000 90,000 70,000 60,000 The total overhead cost above consists of utilities, rent and maintenance. The breakdown of these costs at the 60,000 direct labour hour level of activity is: Utilities (variable) Rent (fixed) Maintenance (Mixed) Total overhead cost $48,000 $21,000 $105,000 $174,000 McRoy Company wants to separate the maintenance cost into its variable and fixed components. Required: (a) Estimate how much of the $246,000 of overhead cost in March was maintenance cost. (b) Using the high low method, construct a cost formula for the maintenance cost. (c) Assume that 209,000 direct labour hours are budgeted for the third quarter of the year, what would be the total overhead cost for the quarter?
J5
Assume a company manufactures only two products—14,000 units of Product C and 6,000 units of Product D. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to three cost pools. The following additional information is available for the company as a whole and for Products C and D: Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity Machining Machine-hours $ 300,000 15,000 MH Machine setups Number of setups $ 150,000 200 Setups Product design Number of products $ 78,000 2 Products Activity Measure Product C Product D Machine-hours 9,000 6,000 Number of setups 50 150 Number of products 1 1 Using the ABC system, how much overhead cost would be assigned from the Machine Setups cost pool to Product D? Multiple Choice $115,200 $112,500 $122,500 $102,500
Using the attached, Was the overhead underallocated or overallocated? By how much?
Using the step method, how much of NUBD Corporation’s Utilities Department cost is allocated between Departments A and B?