MANAGERIAL ACCOUNTING FOR MANAGERS EBOOK
6th Edition
ISBN: 9781264445615
Author: Noreen
Publisher: MCG
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Chapter 5A, Problem 5A.3E
1.
To determine
Introduction:
To compute: The cost per minute of the resource supplied in the shipping department, time driven activity rate for all three activities, and the total labor cost consumed by customers L, M, and N.
2.
To determine
Introduction: Job costing is a technique of determining the cost of a manufacturing job rather than the process of the job. Manufacturing overhead is applied to product or job order and is determined as predetermined overhead.
To compute: The used capacity in minutes, unused capacity in minutes, unused capacity in the number of employees, impact on expenses of matching capacity with demand.
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Consider a company facing a demand pattern and costs as follows:
Sequential Requirements
Number
(units)
1
20
2
40
3
110
4
120
60
30
20
30
80
120
130
40
800
Month
January
February
March
April
May
June
July
August
September
October
November
December
At
ht
5
6
7
8
9
10
11
12
Total
$25.00
$ 0.20
a. Construct a replenishment schedule and calculate the associated costs using the Lot for
Lot method.
b. Repeat using the Fixed Economic Order Quantity method.
c. Repeat using the Periodic Order Quantity method.
d. Repeat using the Wagner-Whitin Algorithm. (Note: Students are required to solve this
An allocation base:
a.
can be units of output if the company has a single
product
O b. is determined before the period begins.
O c. All the given answers are correct.
O d. can be direct labor cost
e. is a measure used to assign manufacturing overhead
costs to products and services
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- Activity-based costing systems: A. use a single predetermined overhead rate based on machine hours instead of on direct labor B. frequently increase the overhead allocation to at least one product while decreasing the overhead allocation to at least one other product C. limit the number of cost pools D. always result in an increase of at least one products selling pricearrow_forwardThe management of Hartman Company is trying to determine the amount of each of two products to produce over the coming planning period. The following information concerns labor availability, labor utilization, and product profitability: a. Develop a linear programming model of the Hartman Company problem. Solve the model to determine the optimal production quantities of products 1 and 2. b. In computing the profit contribution per unit, management does not deduct labor costs because they are considered fixed for the upcoming planning period. However, suppose that overtime can be scheduled in some of the departments. Which departments would you recommend scheduling for overtime? How much would you be willing to pay per hour of overtime in each department? c. Suppose that 10, 6, and 8 hours of overtime may be scheduled in departments A, B, and C, respectively. The cost per hour of overtime is 18 in department A, 22.50 in department B, and 12 in department C. Formulate a linear programming model that can be used to determine the optimal production quantities if overtime is made available. What are the optimal production quantities, and what is the revised total contribution to profit? How much overtime do you recommend using in each department? What is the increase in the total contribution to profit if overtime is used?arrow_forwardPlease do not give solution in image format thankuarrow_forward
- Hi-Tek Manufacturing, Incorporated, makes two types of industrial component parts-the B300 and the T500. An absorption costing income statement for the most recent period is shown: Hi-Tek Manufacturing Incorporated Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses $ 1,651,600 1,245,644 405,956 630,000 Net operating loss $ (224,044) Hi-Tek produced and sold 60,400 units of B300 at a price of $19 per unit and 12,600 units of T500 at a price of $40 per unit. The company's traditional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labor dollars as the allocation base. Additional information relating to the company's two product lines is shown below: Direct materials Direct labor Manufacturing overhead Cost of goods sold B300 $ 400,800 $ 120,300 T500 $ 162,400 $ 42,100 Total $ 563,200 162,400 520,044 $ 1,245,644 The company has created an activity-based costing system to evaluate the profitability…arrow_forwardPlease Solve In 10mins I will Thumbs-up promisearrow_forward/takeAssignment/takeAssignmentMain.do?invoker=Dassignments&takeAssignmentSessionLocator%3Dassignment-take&inprogress%-false ☆ ロ eBook Job Costs Using Activity-Based Costing Heitger Company is a job-order costing firm that uses activity-based costing to apply overhead to jobs. Heitger identified three overhead activities and related drivers. Budgeted information for the year is as follows: Activity Cost Driver Amount of Driver Materials handling $110,700 Number of moves 4,500 Engineering 153,900 Number of change orders 9,000 Other overhead 310,000 Direct labor hours 50,000 Heitger worked on four jobs in July. Data are as follows: Job 13-43 Job 13-44 Job 13-45 Job 13-46 Beginning balance $24,900 $19,800 $2,900 $0 Direct materials $5,800 $9,900 $13,200 $9,500 Direct labor cost $810 $1,080 $1,560 $130 Job 13-43 Job 13-44 Job 13-45 Job 13-46 Number of moves 45 48 33 4 Number of change orders 27 40 23 18 Direct labor hours 810 1,080 1,560 130 By July 31, Jobs 13-43 and 13-44 were completed…arrow_forward
- Refer to CASE 2 (Company B), If activity-based costing is used, what would be the activity rate for the Setups activity ?cost pool None of the amounts given a O $50 b O $25 .c O $5 d Oarrow_forwardWhat is the answer is correct?!!arrow_forward2. What is the variable costing net operating income in Year 1 and in Year 2?arrow_forward
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