Managerial Accounting
3rd Edition
ISBN: 9780077826482
Author: Stacey M Whitecotton Associate Professor, Robert Libby, Fred Phillips Associate Professor
Publisher: McGraw-Hill Education
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Question
Chapter 1, Problem 8E
To determine
Concept introduction:
Calculation of direct material cost, direct labor cost, manufacturing
To calculate:
Direct material cost, direct labor cost, manufacturing overhead cost, Prime Cost, Conversion Cost, Total product Cost.
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2. Austin Electronics manufactures two large-screen television models: the
Royale, which sells for $1,600, and a new model, the Majestic, which sells for
$1,300. Few per unit cost data are given:
Traditional Costing
DM
Royale
$850
Majestic
$570
DL ($20 per hour)
MOH ($38 per DLH)
$140
$248
$100
$190
In 2017, Austin manufactured 25,000 units of the Royale and 10,000 units of the
Majestic. The overhead rate of $38 per direct labor hour was determined by
dividing total expected manufacturing overhead of $7,600,000 by the total direct
labor hours (200,000) for the two models.
Management is considering phasing out the Royale model (comparatively low
profit) and increasing the production of the Majestic model
Before finalizing its decision, management asks Austin's controller to prepare an
analysis using activity-based costing (ABC). The controller accumulates the
following information about overhead for the year ended December 31, 2017.
Est. Overhead Activity
| Level
40,000
18,000…
Ohno Company specializes in manufacturing a unique model of bicycle helmet. The model is well accepted by consumers, and the
company has enough orders to keep the factory production at 10,000 helmets per month (80% of its full capacity). Ohno's monthly
manufacturing cost and other expense data are as follows.
Rent on factory equipment
$1,600
Insurance on factory building
2,500
Raw materials (plastics, polystyrene, etc.)
79,700
Utility costs for factory
900
Supplies for general office
300
Wages for assembly line workers
63,700
Depreciation on office equipment
800
Miscellaneous materials (glue, thread, etc)
1,200
Factory manager's salary
6,400
Property taxes on factory building
500
Advertising for helmets
14,500
Sales commissions
10,600
Depreciation on factory building
1,600
(a)
What formula do we use in accounting to determine estimated total manufacturing overhead (MOH)?
Group of answer choices
Y= mX +b
Y = a + bX
(Estimated Total MOH/(Estimated Total Cost Driver)
(Actual Total MOH)/(Actual Total Cost Driver)
(Estimated Total MOHV(Actual Total Cost Driver)
Chapter 1 Solutions
Managerial Accounting
Ch. 1 - What is the primary difference between financial...Ch. 1 - Prob. 2QCh. 1 - Why are traditional, GAAP-based financial...Ch. 1 - Prob. 4QCh. 1 - consider the area within a 3-mile radius of your...Ch. 1 - What are the three basic functions of management?Ch. 1 - How are the three basic management functions...Ch. 1 - What are ethics and why is ethical behavior...Ch. 1 - Prob. 9QCh. 1 - Prob. 10Q
Ch. 1 - Prob. 11QCh. 1 - Prob. 12QCh. 1 - Why are businesses starting to incorporate...Ch. 1 - What factors does sustainability accounting...Ch. 1 - Think about your activities over the last week....Ch. 1 - Prob. 16QCh. 1 - Why is it important for managers to be able to...Ch. 1 - Prob. 18QCh. 1 - Prob. 19QCh. 1 - Explain the difference between relevant and...Ch. 1 - Prob. 21QCh. 1 - What are prime costs? Why have they decreased in...Ch. 1 - Prob. 23QCh. 1 - Why can't prime cost and conversion cost be added...Ch. 1 - Prob. 25QCh. 1 - Prob. 26QCh. 1 - Prob. 27QCh. 1 - Prob. 28QCh. 1 - Prob. 29QCh. 1 - Prob. 1MCCh. 1 - Prob. 2MCCh. 1 - Prob. 3MCCh. 1 - Prob. 4MCCh. 1 - Prob. 5MCCh. 1 - What is Garcia's total manufacturing cost? a....Ch. 1 - Prob. 7MCCh. 1 - What is Garcia's manufacturing overhead? a....Ch. 1 - Prob. 9MCCh. 1 - Which of the following would not be treated as a...Ch. 1 - MINI-EXERCISES Comparing Financial and Managerial...Ch. 1 - Prob. 4MECh. 1 - Prob. 5MECh. 1 - Prob. 6MECh. 1 - Prob. 8MECh. 1 - Prob. 9MECh. 1 - Prob. 10MECh. 1 - Identifying Direct and Indirect Costs for a...Ch. 1 - Prob. 12MECh. 1 - Identify sustainability issues affecting the...Ch. 1 - Classifying Costs Seth's Skateboard Company incurs...Ch. 1 - Calculation Costs Cotton White, Inc., makes...Ch. 1 - Prob. 7ECh. 1 - Prob. 8ECh. 1 - Classifying Costs Blockett Company makes...Ch. 1 - Prob. 10ECh. 1 - Prob. 12ECh. 1 - Prob. 13ECh. 1 - Explaining Effects of Cost Misclassification Donna...Ch. 1 - Prob. 4.1GAPCh. 1 - Prob. 4.2GAPCh. 1 - Prob. 4.3GAPCh. 1 - Prob. 3.1GBPCh. 1 - Prob. 3.2GBPCh. 1 - Classifying Costs, Calculating Total Costs, and...Ch. 1 - Prob. 4.2GBPCh. 1 - Classifying Costs, Calculating Total Costs, and...
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