Bundle: Accounting, Loose-Leaf Version, 26th + LMS Integrated for CengageNOW, 2 terms Printed Access Card
26th Edition
ISBN: 9781305715967
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 22, Problem 22.5APE
To determine
Budgeting is a process to prepare the financial statement by the manager to estimate the organization’s future actions. It is also helpful to satisfy the everyday activities.
Cost of goods sold indicates the costs involved for the inventory sold by the business in a specific period of time. Its mathematical representation is as below:
To Prepare: The cost of goods sold budget for Incorporation MLC.
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Activity Based Costing - practice problem
Fontillas Instrument, Inc. manufactures two products: missile range instruments and
space pressure gauges. During April, 50 range instruments and 300 pressure gauges
were produced, and overhead costs of $89,500 were estimated. An analysis of
estimated overhead costs reveals the following activities.
Activities
1. Materials handling
2. Machine setups
Cost Drivers
Number of requisitions
Number of setups
Total cost
$35,000
27,500
3. Quality inspections
Number of inspections
27,000
$89.500
The cost driver volume for each product was as follows:
Cost Drivers
Instruments
Gauge
Total
Number of requisitions
400
600
1,000
Number of setups
200
300
500
Number of inspections
200
400
600
Insructions
(a) Determine the overhead rate for each activity.
(b) Assign the manufacturing overhead costs for April to the two products using
activity-based costing.
Bodhi Company has three cost pools and two doggie products (leashes and collars). The activity cost pool
of ordering has the cost drive of purchase orders. The activity cost pool of assembly has a cost driver of
parts. The activity cost pool of supervising has the cost driver of labor hours. The accumulated data
relative to those cost drivers is as follows:
Expected Use of
Estimated
Cost Drivers by Product
Cost Drivers
Overhead
Leashes
Collars
Purchase orders
$260,000
70,000
60,000
Parts
400,000
300,000
500,000
Labor hours
300,000
15,000
10,000
$960,000
Instructions: (a) Compute the activity-based overhead rates. (b) Compute the costs assigned to leashes
and collars for each activity cost pool. (c) Compute the total costs assigned to each product.
Chapter 22 Solutions
Bundle: Accounting, Loose-Leaf Version, 26th + LMS Integrated for CengageNOW, 2 terms Printed Access Card
Ch. 22 - Prob. 22.1DQCh. 22 - Briefly describe the type of human behavior...Ch. 22 - What behavioral problems are associated with...Ch. 22 - What behavioral problems are associated with...Ch. 22 - Under what circumstances is a static budget...Ch. 22 - How do computerized budgeting systems aid firms in...Ch. 22 - Why should the production requirements set forth...Ch. 22 - Why should the timing of direct materials...Ch. 22 - a. Discuss the purpose of the cash budget. b. If...Ch. 22 - Prob. 22.10DQ
Ch. 22 - Prob. 22.1APECh. 22 - Flexible budgeting At the beginning of the period,...Ch. 22 - Prob. 22.2APECh. 22 - Production budget Magnolia Candle Inc. projected...Ch. 22 - Direct materials purchases budget MyLife...Ch. 22 - Direct materials purchases budget Magnolia Candle...Ch. 22 - Prob. 22.4APECh. 22 - Direct labor cost budget Magnolia Candle Inc....Ch. 22 - Prob. 22.5APECh. 22 - Cost of goods sold budget Prepare a cost of goods...Ch. 22 - Prob. 22.6APECh. 22 - Cash budget Magnolia Candle Inc. pays 10% of its...Ch. 22 - Personal budget At the beginning of the school...Ch. 22 - Flexible budget for selling and administrative...Ch. 22 - Static budget versus flexible budget The...Ch. 22 - Flexible budget for Assembly Department Steelcase...Ch. 22 - Production budget True Tab Inc. produces a small...Ch. 22 - Sales and production budgets SoundLab Inc....Ch. 22 - Professional fees earned budget for a service...Ch. 22 - Prob. 22.8EXCh. 22 - Direct materials purchases budget Romano's Frozen...Ch. 22 - Prob. 22.10EXCh. 22 - Prob. 22.11EXCh. 22 - Prob. 22.12EXCh. 22 - Direct labor budget for a service business...Ch. 22 - Production and direct labor cost budgets Levi...Ch. 22 - Factory overhead cost budget Sweet Tooth Candy...Ch. 22 - Cost of goods sold budget Delaware Chemical...Ch. 22 - Cost of goods sold budget The controller of...Ch. 22 - Schedule of cash collections of accounts...Ch. 22 - Schedule of cash collections of accounts...Ch. 22 - Schedule of cash payments for a service company...Ch. 22 - Schedule of cash payments for a service company...Ch. 22 - Capital expenditures budget On January 1, 2016,...Ch. 22 - Forecast sales volume and sales budget For 2016,...Ch. 22 - Sales, production, direct materials purchases, and...Ch. 22 - Budgeted income statement and supporting budgets...Ch. 22 - Cash budget The controller of Sonoma Housewares...Ch. 22 - Budgeted income statement and balance sheet As a...Ch. 22 - Forecast sales volume and sales budget Sentinel...Ch. 22 - Sales, production, direct materials purchases, and...Ch. 22 - Budgeted income statement and supporting budgets...Ch. 22 - Cash budget The controller of Mercury Shoes Inc....Ch. 22 - Budgeted income statement and balance sheet As a...Ch. 22 - Prob. 22.1CPCh. 22 - Prob. 22.2CPCh. 22 - Static budget for a service company A bank manager...Ch. 22 - Objectives of the master budget Dominos Pizza...Ch. 22 - Integrity and evaluating budgeting systems The...
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