Two-Stage ABC for ManufacturingMerlot Company has determined its activity cost pools and cost drivers to be the following: Cost Pools Setup $59,500 Material handling 16,000 Machine operation 300,000 Packing 60,000 Total indirect manufacturing costs $435,500 Cost drivers Setups 350 Material moves 640 Machine hours 20,000 Packing orders 1,000 One product made by Merlot, metal casements, used the following activities during the period to produce 500 units: Setups 20 Material moves 80 Machine hours 1,900 Packing orders 150 a. Calculate the cost per unit of activity for each activity cost pool for Merlot Company. Setup costs Materials handling costs Machine operating costs Packing costs b. Calculate the manufacturing overhead cost per metal casement manufactured during the period.Round cost per unit to two decimal places, if needed. Manufacturing Overhead Cost per Metal Casement Setups Material moves Machine hours Packing orders Total manufacturing overhead Casements produced Cost per casement
Two-Stage ABC for ManufacturingMerlot Company has determined its activity cost pools and cost drivers to be the following: Cost Pools Setup $59,500 Material handling 16,000 Machine operation 300,000 Packing 60,000 Total indirect manufacturing costs $435,500 Cost drivers Setups 350 Material moves 640 Machine hours 20,000 Packing orders 1,000 One product made by Merlot, metal casements, used the following activities during the period to produce 500 units: Setups 20 Material moves 80 Machine hours 1,900 Packing orders 150 a. Calculate the cost per unit of activity for each activity cost pool for Merlot Company. Setup costs Materials handling costs Machine operating costs Packing costs b. Calculate the manufacturing overhead cost per metal casement manufactured during the period.Round cost per unit to two decimal places, if needed. Manufacturing Overhead Cost per Metal Casement Setups Material moves Machine hours Packing orders Total manufacturing overhead Casements produced Cost per casement
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 16E
Related questions
Question
Two-Stage ABC for Manufacturing
Merlot Company has determined its activity cost pools and cost drivers to be the following:
| Cost Pools | |
|---|---|
| Setup | $59,500 |
| Material handling | 16,000 |
| Machine operation | 300,000 |
| Packing | 60,000 |
| Total indirect |
$435,500 |
| Cost drivers | |
|---|---|
| Setups | 350 |
| Material moves | 640 |
| Machine hours | 20,000 |
| Packing orders | 1,000 |
One product made by Merlot, metal casements, used the following activities during the period to produce 500 units:
| Setups | 20 |
| Material moves | 80 |
| Machine hours | 1,900 |
| Packing orders | 150 |
a. Calculate the cost per unit of activity for each activity cost pool for Merlot Company.
| Setup costs |
|
| Materials handling costs |
|
| Machine operating costs |
|
| Packing costs |
|
b. Calculate the manufacturing
Round cost per unit to two decimal places, if needed.
| Manufacturing Overhead Cost per Metal Casement | |
| Setups |
|
| Material moves |
|
| Machine hours |
|
| Packing orders |
|
| Total manufacturing overhead |
|
| Casements produced |
|
| Cost per casement |
|
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning