Tioga Company manufactures sophisticated lenses and mirrors used in large optical telescopes. The company is now preparing its annual profit plan. As part of its analysis of the profitability individual products, the controller estimates the amount of overhead that should be allocated to the individual product lines from the following information. Items Units produced Lenses 30 21 160 Mirrors 30 11 160 Material moves per product line Direct-labor hours per unit The total budgeted material-handling cost is $111,600. Required: 1. Under a costing system that allocates overhead on the basis of direct-labor hours, the material-handling costs allocated to one lens would be what amount? 2. Under a costing system that allocates overhead on the basis of direct-labor hours, the material-handling costs allocated to one mirror would be what amount? 3. Under activity-based costing (ABC), the material-handling costs allocated to one lens would be what amount? The cost driver for the material-handling activity is the number of material moves. 4. Under activity-based costing (ABC), the material-handling costs allocated to one mirror would be what amount? The cost driver for the material-handling activity is the number of material moves.
Tioga Company manufactures sophisticated lenses and mirrors used in large optical telescopes. The company is now preparing its annual profit plan. As part of its analysis of the profitability individual products, the controller estimates the amount of overhead that should be allocated to the individual product lines from the following information. Items Units produced Lenses 30 21 160 Mirrors 30 11 160 Material moves per product line Direct-labor hours per unit The total budgeted material-handling cost is $111,600. Required: 1. Under a costing system that allocates overhead on the basis of direct-labor hours, the material-handling costs allocated to one lens would be what amount? 2. Under a costing system that allocates overhead on the basis of direct-labor hours, the material-handling costs allocated to one mirror would be what amount? 3. Under activity-based costing (ABC), the material-handling costs allocated to one lens would be what amount? The cost driver for the material-handling activity is the number of material moves. 4. Under activity-based costing (ABC), the material-handling costs allocated to one mirror would be what amount? The cost driver for the material-handling activity is the number of material moves.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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.
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Transcribed Image Text:Tioga Company manufactures sophisticated lenses and mirrors used in large optical telescopes. The company is now preparing its
annual profit plan. As part of its analysis of the profitability of individual products, the controller estimates the amount of overhead that
should be allocated to the individual product lines from the following information.
Items
Units produced
Lenses
30
21
160
Mirrors
30
11
160
Material moves per product line
Direct-labor hours per unit.
The total budgeted material-handling cost is $111,600.
Required:
1. Undera costing system that allocates overhead on the basis of direct-labor hours, the material-handling costs allocated to one lens
would be what amount?
1. Material-handling cost per lens
2. Under a costing system that allocates overhead on the basis of direct-labor hours, the material-handling costs allocated to one
mirror would be what amount?
3. Under activity-based costing (ABC), the material-handling costs allocated to one lens would be what amount? The cost driver for the
material-handling activity is the number of material moves.
4. Under activity-based costing (ABC), the material-handling costs allocated to one mirror would be what amount? The cost driver for
the material-handling activity is the number of material moves.
Note: For all requirements, do not round your intermediate calculations and round your final answers to the nearest whole
dollar.
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