Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 12, Problem 22E
The activity of moving materials uses four forklifts, each leased for $18,000 per year. A forklift is capable of making 5,000 moves per year, where a move is defined as a round trip from the plant to the warehouse and back. During the year, a total of 18,000 moves were made. What is the cost of the unused capacity for the moving goods activity?
- a. $5,400
- b. $1,800
- c. $7,200
- d. $3,600
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Assigning Costs to Activities, Resource Drivers
The Receiving Department has three activities: unloading, counting goods, and inspecting. Unloading uses a forklift that is leased for $16,000 per year. The forklift is used only for unloading. The fuel for the forklift is $4,900 per year. Other operating costs (maintenance) for the forklift total $1,500 per year. Inspection uses some special testing equipment that has depreciation of $2,000 per year and an operating cost of $750. Receiving has three employees who have an average salary of $45,000 per year. The work distribution matrix for the receiving personnel is as follows:
Activity
Percentage of Time on Each Activity
Unloading
40%
Counting
25%
Inspecting
35%
No other resources are used for these activities.
Required:
1. Calculate the cost of each activity.
Line Item Description
Amount
Unloading
$fill in the blank 1
Counting
$fill in the blank 2
Inspecting
$fill in the blank 3
2. Explain the two methods used to…
Assigning Costs to Activities, Resource Drivers
The receiving department has three activities: unloading, counting goods, and inspecting. Unloading uses a forklift that is leased for $15,000 per year. The forklift is used only for unloading. The fuel for the forklift is $3,600 per year. Other operating costs (maintenance) for the forklift total $1,500 per year. Inspection uses some special testing equipment that has depreciation of $1,200 per year and an operating cost of $750. Receiving has three employees who have an average salary of $50,000 per year. The work distribution matrix for the receiving personnel is as follows:
Activity
Percentage of Time on Each Activity
Unloading
40%
Counting
25
Inspecting
35
No other resources are used for these activities.
Required:
1. Calculate the cost of each activity.
Unloading
$fill in the blank 1
Counting
$fill in the blank 2
Inspecting
$fill in the blank 3
2. Explain the two methods used to assign costs to activities.
Assigning Costs to Activities, Resource Drivers
The Receiving Department has three activities: unloading, counting goods, and inspecting. Unloading uses a forklift that is leased for $21,000 per year. The forklift is used only for unloading. The fuel for the forklift is $3,700 per year. Other operating costs (maintenance) for the forklift total $1,500 per year. Inspection uses some special testing equipment that has depreciation of $1,750 per year and an operating cost of $1,750. Receiving has three employees who have an average salary of $50,000 per year. The work distribution matrix for the receiving personnel is as follows:
Activity
Percentage of Time on Each Activity
Unloading
40%
Counting
25%
Inspecting
35%
No other resources are used for these activities.
Required:
1. Calculate the cost of each activity.
Unloading
$fill in the blank 1
Counting
$fill in the blank 2
Inspecting
$fill in the blank 3
2. Explain the two methods used to assign costs to activities.…
Chapter 12 Solutions
Cornerstones of Cost Management (Cornerstones Series)
Ch. 12 - What are the two dimensions of the activity-based...Ch. 12 - What is driver analysis? What role does it play in...Ch. 12 - What is activity analysis? Why is this approach...Ch. 12 - What are value-added activities? Value-added...Ch. 12 - What are non-value-added activities?...Ch. 12 - Identify and define four different ways to manage...Ch. 12 - What is a kaizen standard? Describe the kaizen and...Ch. 12 - Prob. 8DQCh. 12 - Prob. 9DQCh. 12 - Prob. 10DQ
Ch. 12 - Prob. 11DQCh. 12 - Prob. 12DQCh. 12 - Prob. 13DQCh. 12 - Describe a financial-based responsibility...Ch. 12 - Describe an activity-based responsibility...Ch. 12 - Cicleta Manufacturing has four activities:...Ch. 12 - Assume that at the beginning of 20x2, Cicleta...Ch. 12 - Gordon Company produces custom-made machine parts....Ch. 12 - Foy Company has a welding activity and wants to...Ch. 12 - Uchdorf Manufacturing just completed a study of...Ch. 12 - Harvey Company produces two models of blenders:...Ch. 12 - Prob. 7ECh. 12 - Thayne Company has 30 clerks that work in its...Ch. 12 - Suppose that clerical erroreither Thaynes or the...Ch. 12 - Refer to Exercise 12.8. Suppose that clerical...Ch. 12 - Prob. 11ECh. 12 - For Situations 1 through 6, provide the following...Ch. 12 - Maquina Company produces custom-made machine...Ch. 12 - Sanford, Inc., has developed value-added standards...Ch. 12 - Refer to Exercise 12.14. Suppose that for 20x2,...Ch. 12 - Jane Erickson, manager of an electronics division,...Ch. 12 - For each of the following situations, two...Ch. 12 - Which of the following are examples of...Ch. 12 - A company is spending 70,000 per year for...Ch. 12 - Which of the following is likely to be used to...Ch. 12 - Activity-based management includes both process...Ch. 12 - The activity of moving materials uses four...Ch. 12 - Joseph Fox, controller of Thorpe Company, has been...Ch. 12 - Baker, Inc., supplies wheels for a large bicycle...Ch. 12 - Novo, Inc., wants to develop an activity flexible...Ch. 12 - Prob. 26PCh. 12 - Tom Young, vice president of Dunn Company (a...Ch. 12 - Bienestar, Inc., has two plants that manufacture a...Ch. 12 - Kelly Gray, production manager, was upset with the...Ch. 12 - Douglas Davis, controller for Marston, Inc.,...
Knowledge Booster
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
- A granary purchases a conveyor used in the manufacture of grain for transporting, filling, or emptying. It is purchased and installed for $72,000 with a market value for salvage purposes that decreases at a rate of 20% per year with a minimum of value $2,350. Operation and maintenance is expected to cost $14,400 in the first year, increasing $1,200 per year thereafter. The granary uses a MARR of 15%. What is the optimum replacement interval for the conveyor? ___________ years.arrow_forwardsolve all partsarrow_forwardThe receiving department of a firm performs 12,000 hours of uploading work and costs $60,000 per year. What is the activity rate for the receiving department? a.$4.50 per hour b.$14 per hour c.$4 per hour d.$5 per hour e.Cannot be determined from this information.arrow_forward
- An asphalt and aggregate mixing plant having a capacity of 50 cu.m every hour costs P2,500,000. It is estimated to process 800,000 cu.m during its life. During a certain year, it processed 60,000 cu.m. If its scrap value is P100,000, Determine the total depreciation during the year.Determine the depreciation cost chargeable to each batch of 50 cu.m produced.arrow_forwardConcrete mixing plant having a capacity of 40m3 every hour costs P1,000,000. It is estimated to process P700,000m3 during its life. During a certain year it processed 50,000m3. If its scrap value is P90,000, determined the total depreciation during the year and the depreciation cost chargeable to each batch of 40m3 using production unit method.arrow_forwardThe following activity rates are associated with moving rail cars by train: $4 per gross ton mile; $50 per rail car switch; $200 per rail car. A train with 20 rail cars traveled 100 miles. Each rail car carried 10 tons of product. Each rail car was switched two times. What is the total cost of moving this train? a. $16,000 b. $10,000 c. $86,000 d. $44,100arrow_forward
- A company is going to buy a new equipment for manufacturing itsproduct. Four different equipment’s are available; costs, operating and otherexpenses are as follows:Equipment A B C DFirst Cost Php 24,000 Php 30,000 Php 49,600 Php 52,000Power per year Php 1300 Php 1360 Php 2400 Php 2520Labor per year Php 10,600 Php 9320 Php 4200 Php 2700Maintenance/year Php 2800 Php 1900 Php1300 Php 700Taxes & Insurance 2% 2% 2% 2%Life; years 5 5 5 5 Money is worth 10% before taxes to the company. Which equipment shouldbe purchased ? Choose which method is applicable.arrow_forwardIn 20 minutes pleasearrow_forwardi need the answer quicklyarrow_forward
- Requireu iIONiation Use the following information for the Exercises below. [The following information applies to the questions displayed below.] Ramirez Company installs a computerized manufacturing machine in its factory at the beginning of the year at a cost of $47,500. The machine's useful life is estimated at 10 years, or 405,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 34,500 units of product. Exercise 8-5 Units-of-production depreciation LO P1 Determine the machine's second-year depreciation using the units-of-production method. Units-of-production Depreciation Choose Numerator: Choose Denominator: Annual Depreciation Expense %3D Depreciation expense per unit Year Annual Production (units) Depreciation Expensearrow_forwardi need the answer quicklyarrow_forwardPROBLEM NO. 3: A mixing plant having a capacity of 50 cu. m. every hour costs P2,500,000. It is estimated to process 800,000 cu. m. during its life. During a certain year it processed 60,000 cu. m. If its scrap value is P100,000, determine the total depreciation cost chargeable to each batch of 50 cu. m. using Service-Output-Method.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage LearningSurvey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning
Fixed Asset Replacement Decision 1235; Author: Accounting Instruction, Help, & How To;https://www.youtube.com/watch?v=LJRzn9K8Nwk;License: Standard Youtube License