Tri-bikes manufactures two different levels of bicycles: the Standard and theExtreme. The total overhead of $300,000 has traditionally been allocated by directlabor hours, with 150,000 hours for the Standard and 50,000 hours for theExtreme. After analyzing and assigning costs to two cost pools, it was determinedthat machine hours is estimated to have $200,000 of overhead, with 4,000 hoursused on the Standard product and 1,000 hours used on the Extreme product. It wasalso estimated that the setup cost pool would have $100,000 of overhead, with1,000 hours for the Standard and 1,500 hours for the Extreme. What is theoverhead rate per product, under traditional and under ABC costing?• Overhead for the Standard product under traditional costingOverhead for the Extreme product under traditional costing• Overhead for the Standard product under ABC costing.Overhead for the Extreme product under ABC costing

Tri-bikes manufactures two different levels of bicycles: the Standard and the Extreme. The total overhead of $300,000 has traditionally been allocated by di labor hours, with 150,000 hours for the Standard and 50,000 hours for the Extreme. After analyzing and assigning costs to two cost pools, it was determin that machine hours is estimated to have $200,000 of overhead, with 4,000 ho used on the Standard product and 1,000 hours used on the Extreme product. I also estimated that the setup cost pool would have $100,000 of overhead, wit 1,000 hours for the Standard and 1,500 hours for the Extreme. What is the overhead rate per product, under traditional and under ABC costing? • Overhead for the Standard product under traditional costing . Overhead for the Extreme product under traditional costing Overhead for the Standard product under ABC costing Overhead for the Extreme product under ABC costing

Tri-bikes manufactures two different levels of bicycles: the Standard and the Extreme. The total overhead of $300,000 has traditionally been allocated by di labor hours, with 150,000 hours for the Standard and 50,000 hours for the Extreme. After analyzing and assigning costs to two cost pools, it was determin that machine hours is estimated to have $200,000 of overhead, with 4,000 ho used on the Standard product and 1,000 hours used on the Extreme product. I also estimated that the setup cost pool would have $100,000 of overhead, wit 1,000 hours for the Standard and 1,500 hours for the Extreme. What is the overhead rate per product, under traditional and under ABC costing? • Overhead for the Standard product under traditional costing . Overhead for the Extreme product under traditional costing Overhead for the Standard product under ABC costing Overhead for the Extreme product under ABC costing

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Gelb Company currently makes a key part for its main product. Making this part incurs per unit variable costs of $1.80 for direct materials and $1.35 for direct labor. Incremental overhead to make this part is $1.64 per unit. The company can buy the part for $5.06 per unit. (a) Prepare a make or buy analysis of costs for this part. (Enter your answers rounded to 2 decimal places.) (b) Should Gelb make or buy the part? (a) Make or Buy Analysis Direct materials Direct labor Overhead Cost to buy Cost per unit Cost difference (b) Company should: Make Buy
Carlise Corp., which manufactures ceiling fans, currently has two product lines, the Indoor and the Outdoor. Carlise has to overhead of $132,720. Carlise has identified the following information about its overhead activity cost pools and the two product lines: Quantity/Amount Consumed by Indoor Line Quantity/Amount Consumed by Outdoor Line Activity Cost Pools Cost Driver Materials handling Number of moves Quality control Number of inspections Machine maintenance Number of machine hours Required: 1. Suppose Carlise used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount.) Indoor Model Outdoor Model Total Cost Assigned to Pool $21, 120 $71,760 4,600 inspections $39,840 29,000 machine hours 19,000 machine hours 600 moves 500 moves 5,800 inspections Overhead Assigned
Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.)
Waterway Engine Incorporated produces engines for the watercraft industry. An outside manufacturer has offered to supply several component parts used in the engine assemblies, which are currently being produced by Waterway. The supplier will charge Waterway $315 per engine for the set of parts. Waterway's current costs for those part sets are direct materials, $140; direct labor, $80; and manufacturing overhead applied at 100% of direct labor. Variable manufacturing overhead is considered to be 20% of the total, and fixed overhead will not change if the part sets are acquired from the outside supplier. Required: a. What would be the net cost advantage or disadvantage if Waterway decided to purchase the parts? b. Should Waterway Engine continue to make the part sets or accept the offer to purchase them for $315? a. b. Waterway Engine Incorporated should
8. Tri-Bikes manufactures two different levels of bicycles – the Standard and the Extreme. The total overhead of $300,000 has traditionally been allocated by direct labor hours, with 150,000 hours for the Standard and 50,000 hours for the Extreme. After analyzing and assigning costs to two cost pools, it was determined that machine hours is estimated to have $180,000 of overhead, with 4,000 hours used on the Standard product and 1,000 hours used on the Extreme product. It was also estimated that the setup cost pool would have $120,000 of overhead, with 1,000 hours for the Standard and 1,500 hours for the Extreme. PLEASE NOTE: Predetermined overhead rates will be rounded to two decimal places and shown with "$" and commas as needed (i.e. $1,234.56). The rates will include their proper label according to the textbook examples (no abbreviations). All dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345). What is the overhead cost per product,…
Fogerty Company makes two products—titanium Hubs and Sprockets. Data regarding the two products follow: DirectLabor-Hours per Unit AnnualProduction Hubs 0.70 19,000 units Sprockets 0.30 47,000 units Additional information about the company follows: Hubs require $35 in direct materials per unit, and Sprockets require $12. The direct labor wage rate is $11 per hour. Hubs require special equipment and are more complex to manufacture than Sprockets. The ABC system has the following activity cost pools: Estimated Activity Activity Cost Pool (Activity Measure) Overhead Cost Hubs Sprockets Total Machine setups (number of setups) $ 12,825 75 60 135 Special processing (machine-hours) $ 220,000 4,400 0 4,400 General factory (organization-sustaining) $ 238,900 NA NA NA Required: 1. Compute the activity rate for each activity cost pool. 2. Determine the unit product cost of each product according to the ABC system.
Vikram
Haver Company currently pays an outside supplier $15 per unit for a part for one of its products. Haver is considering two alternative methods of making the part. Method 1 for making the part would require direct materials of $5 per unit, direct labor of $8 per unit, and ncremental overhead of $3 per unit. Method 2 for making the part would require direct materials of $5 per unit, direct labor of $2 per unit, and incremental overhead of $7 per unit. Required: 1. Compute the cost per unit for each alternative method of making the part. 2. Should Haver make or buy the part? If Haver makes the part, which production method should it use? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the cost per unit for each alternative method of making the part. Make with Method Make with 1 Method 2 Cost per unit Cost per unit Required t Buy Required 2 >
Digital cameras and video cameras are two goods that are manufactured by Everlasting Company. Activity-based costing system is utilized by the firm. The annual production and sales volume of video cameras is 8,000 units and of digital cameras is 10,000 units. Direct costs for the video cameras are $153; for the digital cameras, direct costs are $122. For overhead costs, there are 3 activity cost pools attached with the given expected activities as well as estimated total costs: Activity Cost Estimated Expected Expected Total Рool Cost Activity iPods Activity MP3 players Activity 1 $30,000 100 500 600 Activity 2 $45,000 600 300 900 Activity 3 $96,600 400 2,000 2,400 Using ABC, determine the following: • Total cost per video camera • Total cost per digital camera
Marvel Parts, Incorporated, manufactures auto accessories. One of the company's products is a set of seat covers that can be adjusted to fit nearly any small car. The company has a standard cost system in use for all of its products. According to the standards that have been set for the seat covers, the factory should work 1,015 hours each month to produce 2,030 sets of covers. The standard costs associated with this level of production are: Direct materials Direct labor Variable manufacturing overhead (based on direct labor-hours) Direct materials (8,400 yards) Direct labor Variable manufacturing overhead Total $ 59,276 $ 8,120 $ 3,857 During August, the factory worked only 700 direct labor-hours and produced 1,500 sets of covers. The following actual costs were recorded during the month: Per Set of Covers $ 29.20 4.00 1.90 $ 35.10 Total $ 42,000 $ 6,300 $ 3,150 1. Materials price variance 1. Materials quantity variance 2. Labor rate variance 2. Labor efficiency variance 3. Variable…
Beto Company pays $7.30 per unit to buy a part for one of the products it manufactures. With excess capacity, the company is considering making the part. Making the part would cost $8.40 per unit for direct materials and $1.00 per unit for direct labor. The company normally applies overhead at the predetermined rate of 200% of direct labor cost. Incremental overhead to make the part would be 80% of direct labor cost. (a) Prepare a make or buy analysis of costs for this part. (Enter your answers rounded to 2 decimal places.) (b) Should Beto make or buy the part? (a) Make or Buy Analysis Direct materials Direct labor Overhead Cost to buy Cost per unit Cost difference (b) Company should: Make Buy
Drippin' in Heat manufactures the finest formal wear west of the Mississippi. The company produces two main products: Suit Jackets and Sport Coats. Currently the company uses a traditional overhead rate in which Manufacturing Overhead is allocated to products based on direct labor hours logged. The projected production levels for the period are 1,200 Suit Jackets and 400 Sport Coats. Due to profitability concerns, management is considering switching to Activity-Based Costing (ABC). Management has divided manufacturing overhead costs into three activities and cost pools: Assembly $30,000; Machine Setup $20,000; and Product Movement $102,400. Management has identified the following cost drivers for each overhead activity: direct labor hours for assembly, number of setups for machine setup, and number of moves for product movement. The following information has been compiled for each product line: Direct Labor Requirements Machine Setup Requirements Product Movement Requirements Suit…