1.
Cost driver:
Cost driver is a method of costing to assign the
Activity Based Costing:
Activity based costing is one of the methods of costing to identify the activities performed to manufacture a product and to allocate the overhead cost of resources or indirect cost to the related products.
Cost driver for each overhead and to calculate the manufacturing overhead cost per unit for each product.
Given information:
Machine hours for product M is 25,000 hours
Machine hours for product F is 50,000 hours
Total machining cost is $375,000.
Total machine hours are 75,000 hours.
Production runs for product M is 50.
Production runs for product F is 50.
Total setup costs are $120,000.
Inspection hours for product M are 1,000 hours.
Inspection hours for product F are 500 hours.
Total inspection cost is $105,000.
2.
To calculate: The
Given information:
Direct cost per unit of product M is $4 per unit.
Overhead cost per unit of product is $5.10 per unit.
Direct cost per unit of product F is $4 per unit.
Overhead cost per unit of product is $3.17 per unit.
Direct material cost of product M is $150,000.
Direct manufacturing labor cost of product M is $50,000.
Direct material cost of product F is $300,000.
Direct manufacturing labor cost of product F is $100,000.
Total direct cost of product F is $400,000
Annual production of product F is 100,000 units
3.
To define: The use of new cost information from its activity based costing system to manage its business.
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Chapter 5 Solutions
Cost Accounting, Student Value Edition (15th Edition)
- Jasee Corp estimated manufacturing overhead costs for the year to be $600,000. Jasee also estimated 10,000 machine hours and 2,500 direct labor hours for the year. It bases the predetermined overhead allocation rate on machine hours. On February 28, Job 42 was completed. It required 8 machine hours and 2 direct labor hours. What is the amount of manufacturing overhead allocated to the completed job?arrow_forwardMarston Ltd. purchased equipment for $310,500 on July 1, 2018. It is estimated that the equipment will have a useful life of 10 years and a salvage value of $18,000. The estimated total working hours for the equipment is 24,500 hours. During 2018, Marston uses the equipment for 640 hours. Compute the depreciation expense under the Activity Method (Working Hours) for 2018. Marston follows a calendar-year basis ending December 31.answerarrow_forwardNeed this general account subject solutionarrow_forward
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