Weisman, Inc. uses activity-based costing as the basis for information to set prices for its six lines of seasonal coats.EstimatedEstimated Use ofActivity Cost PoolsCost Drivers per ActivityOverheadDesigning$443,95013,000 designer hoursSizing and cutting4,208,100 169,000 machine hoursStitching and trimming1,491,12575,500 labor hoursWrapping and packing332,80032,000 finished unitsCompute the activity-based overhead rates using the following budgeted data for each of the activity cost pools. (Round answers to 2 decimalplaces, e g. 12.25.)Activity-based overhead rates$per designer hourDesigning$per machine hourSizing and cuttingper labor hourStitching and trimmingper finished unitWrapping and packingeTextbook and Media9:2610/13hp

ABC (Activity based costing) framework was created to manage the drawbacks of customary costing…

Answered: Weisman, Inc. uses activity-based…

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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Heintz Products uses activity-based costing to account for product costs. The plant manager has estimated the following cost drivers and rates. Activity Centers Materials inspection Equipment maintenance Machine setups Packing and shipping Cost Drivers Direct materials cost Machine-hours Number of production runs Pounds of finished output Rate per Cost Driver Unit 15% of materials cost $ 19 per machine-hour $ 6,370 per setup $ 4.20 per pound Direct materials costs were $508,000 and direct labor costs were $348,000 during November, when the plant finished 7,000 pounds of product, had 20 setups, and ran the machines for 15,000 hours. There were no work-in-process inventories. Required: Use T-accounts to show the flow of materials, labor, and overhead costs from the four overhead activity centers through Work- in-Process Inventory and out to Finished Goods Inventory. Use the accounts Materials Inventory, Wages Payable, Work-in- Process Inventory, Finished Goods Inventory, and four…
O&G Company manufactures console tables and uses an activity-based costing system to allocate all manufacturing conversion costs. Each console table consists of 40 separate parts totaling $250 in direct materials and requires 5.0 hours of machine time to produce. Additional information follows: Activity Materials handling Allocation Base Number of parts Machine hours Number of parts Number of finished units Machining Assembling Packaging What is the number of finished console tables? OA 200 OB. 467 OC. 25 OD. Cannot be determined from the information given Cost Allocation Rate $3.00 per part $4.80 per machine hour $1.00 per part $4.00 per finished unit
Forner, Inc., manufactures and sells two products: Product Z1 and Product Z8. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Expected Activity Estimated Activity Overhead Activity Cost Pools Measures Cost Product Z1 Product Z8 Total Labor-related $ 124,400 6,000 DLHS 3,000 9,000 Machine setups setups 58,660 700 600 1,300 Order size MHs 917,480 3,800 3,000 6,800 $1,100,540 The activity rate for the Order Sıze activity cost pool under activity-based costing is closest to: Multiple Cholce $59.53 per MH $193.87 per MH $143.55 per MH $134.92 per MH
Data concerning three of Kilmon Corporation’s activity cost pools appear below: Activity Cost Pools Estimated Overhead Cost Expected Activity Assembling products $ 65,540 4,520 assembly hours Designing products $ 578,112 3,011 product design hours Setting up batches $ 41,820 820 batch set-ups Required: Compute the activity rates for each of the three cost pools. (Round your answers to 2 decimal places.) Activities Activity rate Assembly products Designing products Setting up batches
Maxey & Sons manufactures two types of storage cabinets—Type A and Type B—and applies manufacturing overhead to all units at the rate of $120 per machine hour. Production information follows. Type A Type BAnticipated volume (units) 24,000 45,000 Direct-material cost per unit $ 28 $ 42 Direct-labor cost per unit 33 33 The controller, who is studying the use of activity-based costing, has determined that the firm’s overhead can be identified with three activities: manufacturing setups, machine processing, and product shipping. Data on the number of setups, machine hours, and outgoing shipments, which are the activities’ three respective cost drivers, follow. Type A Type B TotalSetups 140 100 240 Machine hours 48,000 67,500 115,500 Outgoing shipments 200 150 350 The firm’s total…
Doles Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products. Activity Cost Pools Setting up batches Processing customer orders Assembling products Data concerning two products appear below: Number of batches Number of customer orders Number of assembly hours Total overhead cost Activity Rate $69.22 per batch $26.28 per customer order $ 12.11 per assembly hour Product K52W 65 45 418 Required: How much overhead cost would be assigned to each of the two products using the company's activity-based costing system? (Round your intermediate calculations and final answers to 2 decimal places.) Product K52W Product X94T Product X94T 52 30 161
Crane, Inc. uses activity-based costing as the basis for information to set prices for its six lines of seasonal coats. Activity Cost Pools Sizing and cutting Stitching and trimming Wrapping and packing Sizing and cutting Stitching and trimming Estimated Overhead Wrapping and packing $4,108,500 1,439,100 $ Compute the activity-based overhead rates using the following budgeted data for each of the activity cost pools. (Round answers to 2 decimal places, e.g. 12.25.) $ LA 325,500 $ Estimated Use of Cost Drivers per Activity 166,000 machine hours 78,000 labor hours 35,000 finished units Activity-based overhead rates per machine hour per labor hour per finished unit
Sultan Company uses an activity-based costing system. At the beginning of the year, the company made the following estimates of cost and activity for its five activity cost pools: Activity Cost Pool Activity Measure Expected Overhead Cost Expected Activity Labor-related Direct labor-hours $ 184,800 30,800 DLHs Purchase orders Number of orders $ 6,900 230 orders Parts management Number of part types $ 81,120 104 part types Board etching Number of boards $ 45,000 1,800 boards General factory Machine-hours $ 150,300 16,700 MHs Required: 1. Compute the activity rate for each of the activity cost pools. 2. The expected activity for the year was distributed among the company’s four products as follows: Activity Cost Pool Expected Activity Product A Product B Product C Product D Labor-related (DLHs) 7,000 14,300 4,400 5,100 Purchase orders (orders) 58 26 46 100 Parts management (part types) 30 18 37 19 Board etching (boards) 500 720 580 0 General factory…
XYZ has provided the following data from its activity-based costing system: Activity Cost Pool Total Cost Total Activity Assembly $228,060 18,000 machine-hours Processing orders $ 34,068 1,600 orders Inspection $125,560 1,700 inspection hours The company makes 420 units of product YBY a year, requiring a total of 460 machine-hours, 80 orders, and 20 inspection-hours per year. The product's direct materials cost is $48.96 per unit and its direct labor cost is $25.36 per unit. According to the activity-based costing system, the average cost of product YBY is closest to: O a. $93.99 per unit O b. None of the given answer is correct. O. $95.77 per unit O d. $94.00 per unit O e. $94.26 per unit CLEAR MY CHOICE MacBook Air 20 F3 F1 $ % & # 5 6. 7 8 1 2 3 4 T. Y Q W E と K F G تثبيت A (( S V alt الأوامر C. I R
Gable Company uses three activity pools. Each pool has a cost driver. Information for Gable Company follows: Total Cost of Pool $ 454,960 100,000 72,720 Estimated Cost Driver 96,800 10,000 505 Activity Pools Machining Designing costs Setup costs Suppose that Gable Company manufactures three products, A, B, and C. Information about these products follows: Product A Product B 38,000 4,000 40 Number of machine hours Number of design hours Number of batches Cost Driver Number of machine hours Number of design hours Number of batches Product A Product B Product C Total Overhead Assigned 48,000 2,200 170 Required: Using activity rates, determine the amount of overhead assigned to each product. Note: Do not round intermediate calculations. Round the final answer to nearest whole number. Product C 10,800 3,800 295
Genious Corporation implemented activity-based costing several years ago and uses it for its external financial reports. The company has four activity cost pools, which are listed below. Activity Cost Pool Activity Measure Estimated Overhead Cost Machine related Machine Hours $90,000 Purchase orders Number of orders $126,000 Machine setups Number of Setups $200,000 General factory Number of labor hrs $60,000 Expected Activity 5,000 Mhs 2,800 orders 10,000 setups 4,000 Dlhs Manufacturing overhead cost was applied to production. Actual activity during the year was as follows: Activity Cost Pool Machine related Purchase orders Machine setups General factory Actual Activity 10,500 Mhs 800 orders 1,500 setups 8,000 Dlhs It is expected that the company will produce 62,500 units. Compute the activity rate for each activity. Compute the per unit cost for overhead
Lakeside Inc. manufactures four lines of remote control boats and uses activity-based costing to calculate product cost. Activity Cost Pools EstimatedTotal Cost Estimated Cost Driver Machining $ 334,000 13,600 machine hours Setup 76,000 420 batches Quality control 103,000 830 inspections Compute the activity rates for each of the following activity cost pools: How do you find the activitiy costs???

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