The distribution of resource consumption across activity cost pools is given below: Activity Cost Pools Total Assembly Order Processing Other Wages and salaries 25% 65% 10% 100% Depreciation 15% 45% 40% 100% Rent 35% 40% 25% 100% The activity rate for the Assembly activity cost pool is closest to: $2.75 per labor-hour $2.85 per labor-hour $3.85 per labor-hour $2.65 per labor-hour

The distribution of resource consumption across activity cost pools is given below: Activity Cost Pools Total Assembly Order Processing Other Wages and salaries 25% 65% 10% 100% Depreciation 15% 45% 40% 100% Rent 35% 40% 25% 100% The activity rate for the Assembly activity cost pool is closest to: $2.75 per labor-hour $2.85 per labor-hour $3.85 per labor-hour $2.65 per labor-hour

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 2DQ: Which of the following costs would be classified as variable and which would be classified as fixed,...

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The cost behavior patterns below are lettered A through H. The vertical axes of the graphs represent total dollars of expense, and the horizontal axes represent production in units, machine hours, or direct labor hours. In each case, the zero point is at the intersection of the two axes. Each graph may be used no more than once. Required: Select the graph that matches the lettered cost described here. a. Depreciation of equipmentthe amount of depreciation charged is computed based on the number of machine hours that the equipment was operated. b. Electricity billflat fixed charge, plus a variable cost after a certain number of kilowatt hours are used. c. City water billcomputed as follows: d. Depreciation of equipmentthe amount is computed by the straight-line method. e. Rent on a factory building donated by the citythe agreement calls for a fixed fee payment, unless 200,000 labor hours are worked, in which case no rent need be paid. f. Salaries of repair workersone repair worker is needed for every 1,000 machine hours or less (i.e., 0 to 1,000 hours requires one repair worker, 1,001 to 2,000 hours requires two repair workers, etc.).
Explain the concept of a pool rate in activity-based costing.
Exercise 7-2 (Algo) First Stage Allocation [LO7-2] SecuriCorp operates a fleet of armored cars that make scheduled pickups and deliveries in the Los Angeles area. The company is implementing an activity-based costing system with four activity cost pools: Travel, Pickup and Delivery, Customer Service, and Other. The activity measures are miles for the Travel cost pool, number of pickups and deliveries for the Pickup and Delivery cost pool, and number of customers for the Customer Service cost pool. The Other cost pool has no activity measure because it is an organization- sustaining activity. The following costs will be assigned using the activity-based costing system: Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses Office expenses Administrative expenses Total cost Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses Office expenses $ 1,120,000 550,000…
Ramsey SARL uses an activity based costing system to assign overhead costs to products. In the first stage, two overhead costs - Security expense and Building depreciation - are allocated to three activity cost pools - Shipping, Carving, and Other - based on resource consumption. Data to perform these allocations appear below: Overhead Costs: Security expense: $105,000 Building depreciation: $70,000 Distribution of Resource Consumption across Activity Cost Pools: Overhead Cost Activity Cost Pools Shipping Carving Other Security expense 0.30 0.42 0.28 Building depreciation 0.34 0.32 0.34 The second stage of allocation is done by assigning the Shipping costs to products on the basis of orders shipped while products are assigned Carving costs based on machine hours. Costs assigned to the Other activity pool are not further assigned to products. Activity information for Ramsey's only two products is below: orders shipped machine hours Product BA-15: 6,300 1,500…
Mirabile Corporation uses activity-based costing to compute product margins. Overhead costs have already been allocated to the company's three activity cost pools-- Processing, Supervising, and Other. The costs in those activity cost pools appear below: Processing $ 3,800 $ 23,800 $ 10,400 Supervising other Processing costs are assigned to products using machine-hours (MHs) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data appear below: Batches MHs (Processing) (Supervising) Product MO 9,700 500 Product M5 300 500 Total 10,000 1,000 Finally, sales and direct cost data are combined with Processing and Supervising costs to determine product margins. Product MO Product M5 $ 74,100 $ 28,500 $ 27,800 $ 89,900 $ 31,400 $ 41,700 Sales (total) Direct materials (total) Direct labor (total) What is the product margin for Product M5 under activity-based costing? Multiple Choice C4786
Ayala Inc. has conducted the following analysis related to its product lines, using a traditional costing system (volume-based) and an activity-based costing system. Both the traditional and the activity-based costing systems include direct materials and direct labor costs. Products Product 540X Product 137Y Product 2495 Sales Revenue $208,000 155,000 92.000 Total Costs Traditional $54,000 48,000 23.000 ABC $49,000 30,000 46,000
An activity based costing system is used at Haldeman, SA to assign products overhead costs. First, the two overhead costs of Equipment depreciation and Water expense are allocated to three activity cost pools - Handling, Machining, and Other - based on resource consumption. The information used to perform these allocations is below: Overhead Costs: Equipment depreciation: $50,000 Water expense: $60,000 Distribution of Resource Consumption across Activity Cost Pools: Overhead Cost Activity Cost Pools Handling Machining Other Equipment depreciation 0.28 0.34 0.38 Water expense 0.32 0.22 0.46 The second stage of allocation is done by assigning the Handling costs to products on the basis of orders filled while products are assigned Machining costs based on machine hours. Costs assigned to the Other activity pool are not further assigned to products. Activity information for Haldeman's only two products is below: orders filled machine hours Product LS-157: 3,400 3,400…
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Addleman Corporation has an activity-based costing system with three activity cost pools--Processing, Supervising, and Other. In the first stage allocations, costs in the two overhead accounts, equipment expense and indirect labor, are allocated to the three activity cost pools based on resource consumption. Data used in the first stage allocations follow: Overhead costs: Equipment expense Indirect labor $ 73,000 $ 1,000 Distribution of Resource Consumption Across Activity Cost Pools: Equipment expense Indirect labor Processing 0.20 Activity Cost Pools Supervising Other 0.10 0.70 0.20 0.20 0.60 Processing costs are assigned to products using machine-hours (MHS) and Supervising costs are assigned to products using the number of batches. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow:
Learned Corporation has provided the following information: Direct materials. Direct labor Variable manufacturing overhead Fixed manufacturing overhead Sales commissions a. Total product cost b. Total period cost Cost per Unit Cost per Period $ 5.80 $ 4.00 $ 1.60 c. Contribution margin per unit d. Total direct manufacturing cost e. Total indirect manufacturing cost $ 0.70 $ 0.60 Variable administrative expense Fixed selling and administrative expense Required: a. For financial reporting purposes, what is the total amount of product costs incurred to make 6,000 units? b. For financial reporting purposes, what is the total amount of period costs incurred to sell 6,000 units? c. If the selling price is $23.30 per unit, what is the contribution margin per unit sold? Note: Round your answer to 2 decimal places. d. If 7,000 units are produced, what is the total amount of direct manufacturing cost incurred? e. If 7,000 units are produced, what is the total amount of indirect manufacturing…
Use the activity rate and usage information to determine the total activity cost and activity cost per unit for each product. If required, round the per unit answers to the nearest cent. Total Activity Cost Activity Cost Per Unit 66,810 ✓ 37,403 X 220.50 X 184.25 ✓ Elliptical machines Treadmill $
Using the following data, determine the unit product cost under variable costing. Units produced 1,000 Direct materials $6 Direct labor $10 Fixed overhead $6,000 Variable overhead $6 Fixed selling and administrative $2,000 Variable selling and administrative $22 $24 $28 $30 $2