Homework Help is Here – Start Your Trial Now!
Business
Accounting
Two-Stage ABC for Manufacturing with ABC Variances Meade Manufacturing developed the following activity cost pool information for its current year manufacturing activities: Setup Machine operations First unit inspection Packaging Purchasing and materials handling $665,000 950,000 kilograms 315,000 1,500 setups 2,156,000 14,000 machine hours 392,000 1,600 batches 140,000 200,000 units Units Batches Setups* Machine hours Kilograms of raw materials Direct materials costs Budgeted Activity Cost Actual production information for three of Meade's products during the year is as follows: Required Activity Cost Driver at Practical Capacity Standard Standard Specialty Product A Product B Products 35,000 15,000 10,000 400 800 800 140 150 Unit cost $ 1,200 175,000 $81,200 95,000 $37,800 Direct labor costs $133,700 $90,860 $63,000 *Some products require setups on two or more machines. 50 45 650 65,000 $62,090 a. Determine the unit cost of each product for Meade Manufacturing under activity-based costing. Product A Product B Specialty Product 0 $ 0 $ 0 b. The unit cost of the specialty products is much higher than the unit cost of Standard Product A or Standard Product B due to: number of machine hours per unit for specialty products number of setups per batch for specialty products Please answer all parts of the question.

Two-Stage ABC for Manufacturing with ABC Variances Meade Manufacturing developed the following activity cost pool information for its current year manufacturing activities: Setup Machine operations First unit inspection Packaging Purchasing and materials handling $665,000 950,000 kilograms 315,000 1,500 setups 2,156,000 14,000 machine hours 392,000 1,600 batches 140,000 200,000 units Units Batches Setups* Machine hours Kilograms of raw materials Direct materials costs Budgeted Activity Cost Actual production information for three of Meade's products during the year is as follows: Required Activity Cost Driver at Practical Capacity Standard Standard Specialty Product A Product B Products 35,000 15,000 10,000 400 800 800 140 150 Unit cost $ 1,200 175,000 $81,200 95,000 $37,800 Direct labor costs $133,700 $90,860 $63,000 *Some products require setups on two or more machines. 50 45 650 65,000 $62,090 a. Determine the unit cost of each product for Meade Manufacturing under activity-based costing. Product A Product B Specialty Product 0 $ 0 $ 0 b. The unit cost of the specialty products is much higher than the unit cost of Standard Product A or Standard Product B due to: number of machine hours per unit for specialty products number of setups per batch for specialty products Please answer all parts of the question.

Managerial Accounting
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 11E: Lonsdale Inc. manufactures entry and dining room lighting fixtures. Five activities are used in...
See similar textbooks
icon
Related questions
Question
Two-Stage ABC for Manufacturing with ABC Variances Meade Manufacturing developed the following activity cost pool information for its current year manufacturing activities: Budgeted Activity Cost Purchasing and materials handling $665,000 950,000 kilograms 315,000 1.500 setups 14,000 machine hours 2,156,000 392,000 1,600 batches 140,000 Setup Machine operations First unit inspection Packaging Actual production information for three of Meade's products during the year is as follows: Required Standard Standard Specialty Product A Product B Products Units 35,000 15,000 10,000 Batches 140 50 400 Setups* 150 45 800 1,200 650 800 Machine hours Kilograms of raw materials 175,000 65,000 95,000 Direct materials costs $81,200 $62,090 $37,800 Direct labor costs $133,700 $90,860 $63,000 *Some products require setups on two or more machines. Activity Cost Driver at Practical Capacity Product A 0 $ 200,000 units a. Determine the unit cost of each product for Meade Manufacturing under activity-based costing. Unit cost $ Product B Specialty Product 0 $ 0 Please answer all parts of the question. b. The unit cost of the specialty products is much higher than the unit cost of Standard Product A or Standard Product B due to: * number of machine hours per unit for specialty products number of setups per batch for specialty products
Transcribed Image Text:Two-Stage ABC for Manufacturing with ABC Variances Meade Manufacturing developed the following activity cost pool information for its current year manufacturing activities: Budgeted Activity Cost Purchasing and materials handling $665,000 950,000 kilograms 315,000 1.500 setups 14,000 machine hours 2,156,000 392,000 1,600 batches 140,000 Setup Machine operations First unit inspection Packaging Actual production information for three of Meade's products during the year is as follows: Required Standard Standard Specialty Product A Product B Products Units 35,000 15,000 10,000 Batches 140 50 400 Setups* 150 45 800 1,200 650 800 Machine hours Kilograms of raw materials 175,000 65,000 95,000 Direct materials costs $81,200 $62,090 $37,800 Direct labor costs $133,700 $90,860 $63,000 *Some products require setups on two or more machines. Activity Cost Driver at Practical Capacity Product A 0 $ 200,000 units a. Determine the unit cost of each product for Meade Manufacturing under activity-based costing. Unit cost $ Product B Specialty Product 0 $ 0 Please answer all parts of the question. b. The unit cost of the specialty products is much higher than the unit cost of Standard Product A or Standard Product B due to: * number of machine hours per unit for specialty products number of setups per batch for specialty products
Expert Solution
steps

Step by step

Solved in 5 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Cost allocation
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Managerial Accounting
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Essentials of Business Analytics (MindTap Course …
Essentials of Business Analytics (MindTap Course …
Statistics
ISBN:
9781305627734
Author:
Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
SEE MORE TEXTBOOKS