Part 1 & 2 The following overhead cost information is available for the James Corporation:ActivityPurchasingAllocation Base (Driver)Number of purchase ordersOverhead Cost$410,000ReceivingNumber of shipments received $130,000Machine setups Number of setupsQuality control Number of inspections$405,000$155,000During the year, 9,000 purchase orders were issued; 27,000 shipments were received; 4,500 machine setupsoccurred; and 9,500 inspections were conducted. Employees worked a total of 12,000 hours on production.1. Determine the overhead rate, using the traditional overhead allocation method based on direct laborhours.2. Determine the overhead rate for each of the activities, assuming that ABC is used.

Explanation of Overhead Costs:Overhead costs are the indirect costs incurred by a business that…

Answered: The following overhead cost information…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 2CE: Corazon Manufacturing Company has a purchasing department staffed by five purchasing agents. Each...

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Silven Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity $138,000 Number of setups 10,200 Number of orders 92,400 Machine hours 18,480 Receiving hours phones with the following expected activity demands: Setting up equipment Ordering materials Machining Receiving Silven produces two models of cell Model X 5,000 80 200 6,600 385 Units completed Number of setups Number of orders Machine hours Receiving hours Required: Model Y 10,000 40 400 4,950 770 120 600 11,550 1,155
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Cost of the inspecting cost pool to products is
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Vanguard Corporation has provided the following data from its activity - based costing system: Activity Cost Pool Total Cost Total Activity Assembly $ 1,046, 880 72, 000 machine - hours Processing orders 95, 800 2,000 orders Inspection 144, 130 2,030 inspection - hours The company makes 380 units of product 037W a year, requiring a total of 610 machine - hours, 30 orders, and 15 inspection - hours per year. The product's direct materials cost is $36.76 per unit and its direct labor cost is $29.98 per unit. According to the activity - based costing system, the average cost of product 037W is closest to:
Zeus Industries manufactures two types of electrical power units, custom and standard, which involve four factory overhead activities—production setup, procurement, quality control, and materials management. An activity analysis of the overhead revealed the following estimated activity costs and activity bases for these activities: Activity Activity Cost Activity Base Production setup $ 42,000 Number of setups Procurement 137,500 Number of purchase orders (PO) Quality control 200,000 Number of inspections Materials management 168,000 Number of components Total $547,500 The activity-base usage quantities for each product are as follows: Setups Purchase Orders Inspections Components Unit Volume Custom 200 1,100 2,200 450 2,000 Standard 150 150 300 350 2,000 Total 350 1,250 2,500 800 4,000 a. Determine an activity rate for each activity. Activity Rates Production Setup Procurement Quality Control Materials…
Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below. Procurement Scheduling Materials handling Product development Production Activity Cost Activity Base $365,600 Number of purchase orders 245,100 Number of production orders 411,700 Number of moves 716,200 Number of engineering changes 1,470,000 Machine hours Disk drives Tape drives Wire drives Number of Number of Number Number of Production of Engineering Orders Moves Changes Purchase Orders 1,310 620 4,200 The activity rate for the scheduling activity cost pool is Oa. $20.55 per production order Ob. $61.00 per production order Oc. $238.18 per production order Od. $159.67 per production order 4,090 2,100 11,600 370 175 990 10 7 27 Machine Hours 2,500 9,600 12,000 Number of Units 2,200 3,800 2,700 Previous Next
Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below. Activity Cost Activity Base Procurement $368,000 Number of purchase orders Scheduling 228,000 Number of production orders Materials handling 490,000 Number of moves Product development 796,600 Number of engineering changes Production 1,512,100 Machine hours Number ofPurchaseOrders Number ofProductionOrders NumberofMoves Number ofEngineeringChanges MachineHours NumberofUnits Disk drives 4,150 340 1,270 11 1,600 1,900 Tape drives 2,400 215 550 5 9,800 4,000 Wire drives 11,500 840 4,200 22 10,000 2,200 The activity rate for the procurement activity cost pool is a.$263.80 per purchase order b.$163.44 per purchase…
Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below. Activity Cost Activity Base Procurement $340,000 Number of purchase orders Scheduling 221,900 Number of production orders Materials handling 423,400 Number of moves Product development 795,800 Number of engineering changes Production 1,555,800 Machine hours Number ofPurchaseOrders Number ofProductionOrders NumberofMoves Number ofEngineeringChanges MachineHours NumberofUnits Disk drives 4,040 420 1,210 11 2,500 1,900 Tape drives 2,200 185 680 7 9,600 3,500 Wire drives 12,500 790 4,400 30 10,700 2,000 The activity-based cost for each disk drive unit is a.$938.06 b.$302.37 c.$18.14 d.$253.22
Activity Cost Pool Supporting direct labor Machine processing Machine setups Production orders Shipments Product sustaining Activity data have been supplied for the following two products: Number of units produced per year Direct labor-hours Machine-hours Machine setups Production orders Shipments Product sustaining Activity Cost Pool Supporting direct labor Machine processing Machine setups Production orders Shipments Product sustaining Total overhead cost Activity Rates $9 per direct labor-hour $3 per machine-hour $45 per setup $150 per order $ 130 per shipment $ 875 per product K425 0 $ Total Expected Activity K425 M67 2,000 M67 200 1,000 2,800 Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system? 0 7 7 14 2 50 40 2 NNNN 2
Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to five separate activity pools. The budgeted activity cost and activity base data by product are as follows: Procurement Scheduling Materials handling Product development Production Disk drives Tape drives Wire drives Activity Cost Activity Base $370,000 Number of purchase orders 250,000 Number of production orders 500,000 Number of moves 730,000 Number of engineering changes 1,500,000 Machine hours Oc. $744.06 Od. $204.13 Machine Hours 1,400 2,000 800 8,000 4,000 10,000 The activity-based cost (rounded to the nearest cent) for each wire drive unit is Oa. $394,12 Ob. $173.51 Number of Number of Number Number of Purchase Production of Moves Orders Orders 4,000 Engineering Changes 10 300 4,000 12,000 150 800 10 25 Number of Units 2,000 4,000 2,500

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