Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Chapter 4, Problem 27E
Plata Company has identified the following
Plata produces two models of microwave ovens with the following activity demands:
The company’s normal activity is 21,000 machine hours.
Calculate the total overhead cost that would be assigned to Model X using an activity-based costing system:
- a. $230,000
- b. $240,000
- c. $280,000
- d. $190,000
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Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year.
Activity
Expected Cost
Activity Driver
Activity Capacity
Setting up equipment
$480,000
Number of setups
600
Ordering costs
360,000
Number of orders
18,000
Machine costs
840,000
Machine hours
42,000
Receiving
400,000
Receiving hours
10,000
Deoro produces two models of dishwashers with the following expected prime costs and activity demands:
Model A
Model B
Direct materials
$600,000
$800,000
Direct labor
$480,000
$480,000
Units completed
16,000
8,000
Direct labor hours
6,000
2,000
Number of setups
400
200
Number of orders
6,000
12,000
Machine hours
24,000
18,000
Receiving hours
3,000
7,000
The company's normal activity is 8,000 direct labor hours.
Required:
Determine the unit cost for each model using direct labor hours to…
Silven Company has identified the following overhead activities, costs, and activity drivers for the
coming year:
Expected
Cost
Activity
Driver
Activity
Activity
Capacity
Setting up
equipment
$147,000
Number of
setups
120
Ordering
materials
Number of
orders
26,400
1,200
Machining
Machine
hours
101,500
10,150
Receiving
23,100
Receiving
hours
1,155
Silven produces two models of cell phones with the following expected activity demands:
Model
Model
Y
Units
completed
5,400
10,800
Number
80
40
of setups
Number
of orders
400
800
Machine
hours
5,800
4,350
770
Receiving
hours
385
Required:
1. Determine the total overhead assigned to each product using the four activity drivers.
2. Determine the total overhead assigned to each model using the two most expensive activities.
The costs of the two relatively inexpensive activities are allocated to the two expensive activities in
proportion to their costs. Round interim calculations to two decimal places and round your final
answers to the nearest…
Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year:
Activity
Expected Cost
Activity Driver
Activity Capacity
Setting up equipment
$458,780
Number of setups
580
Ordering costs
354,900
Number of orders
16,900
Machine costs
710,600
Machine hours
41,800
Receiving
417,100
Receiving hours
9,700
Deoro produces two models of dishwashers with the following expected prime costs and activity demands:
Model A
Model B
Direct materials
$578,000
$772,000
Direct labor
$470,000
$459,000
Units completed
15,500
8,500
Direct labor hours
5,300
2,100
Number of setups
370
210
Number of orders
5,000
11,900
Machine hours
24,000
17,800
Receiving hours
2,800
6,900
The company's normal activity is 7,400 direct labor hours.
Required:
1. Determine the unit cost for each model using direct labor hours to apply overhead. Round intermediate calculations and final answers to nearest cent.
Unit Cost
Model A
$fill in…
Chapter 4 Solutions
Cornerstones of Cost Management (Cornerstones Series)
Ch. 4 - What is a predetermined overhead rate? Explain why...Ch. 4 - Describe what is meant by under- and overapplied...Ch. 4 - Explain how a plantwide overhead rate, using a...Ch. 4 - What are non-unit-related overhead activities?...Ch. 4 - What is an overhead consumption ratio?Ch. 4 - Overhead costs are the source of product cost...Ch. 4 - What is activity-based product costing?Ch. 4 - What are the six steps that define the design of...Ch. 4 - Explain how the cost of resources is assigned to...Ch. 4 - Prob. 10DQ
Ch. 4 - Identify and define two types of activity drivers.Ch. 4 - What are unit-level activities? Batch-level...Ch. 4 - Prob. 13DQCh. 4 - Prob. 14DQCh. 4 - Prob. 15DQCh. 4 - Prob. 1CECh. 4 - Warner Company has the following data for the past...Ch. 4 - Lansing. Inc., provided the following data for its...Ch. 4 - Larsen, Inc., produces two types of electronic...Ch. 4 - Roberts Company produces two weed eaters: basic...Ch. 4 - Golding Bank provided the following data about its...Ch. 4 - Golding Bank provided the following data about its...Ch. 4 - Electan Company produces two types of printers....Ch. 4 - Patterson Company produces wafers for integrated...Ch. 4 - Selected activities and other information are...Ch. 4 - Ripley, Inc., costs products using a normal...Ch. 4 - Predetermined Overhead Rate, Application of...Ch. 4 - Craig Company uses a predetermined overhead rate...Ch. 4 - Departmental Overhead Rates Mariposa, Inc.,...Ch. 4 - McCourt Company produces two types of leather...Ch. 4 - Deoro Company has identified the following...Ch. 4 - Prob. 17ECh. 4 - Secondary Activities Refer to the interview in...Ch. 4 - Bob Randall, cost accounting manager for Hemple...Ch. 4 - Prob. 20ECh. 4 - Bob Randall, cost accounting manager for Hemple...Ch. 4 - Silven Company has identified the following...Ch. 4 - Silven Company has identified the following...Ch. 4 - Gee Manufacturing produces two models of camshafts...Ch. 4 - Cushing, Inc., costs products using a normal...Ch. 4 - Nonunit-level drivers are prominent in...Ch. 4 - Plata Company has identified the following...Ch. 4 - Assume that the inspection activity has an...Ch. 4 - Consider the information given on two products and...Ch. 4 - Primera Company produces two products and uses a...Ch. 4 - Fisico Company produces exercise bikes. One of its...Ch. 4 - Prob. 32PCh. 4 - Glencoe First National Bank operated for years...Ch. 4 - Autotech Manufacturing is engaged in the...Ch. 4 - The Bienestar Cardiology Clinic has two major...Ch. 4 - Reducir, Inc., produces two different types of...Ch. 4 - Refer to the data given in Problem 4.36 and...Ch. 4 - Escuha Company produces two type of calculators:...
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