MANAG.ACCOUNTING-CONNECT ACCESS >CUSTOM<
17th Edition
ISBN: 9781266862434
Author: Garrison
Publisher: MCG CUSTOM
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 7.A, Problem 4P
PROBLEM 7A-4 Time-Driven Activity-Based Costing LO 7-6, LO 7-7
Stahl Company is conducting a time-driven activity-based costing study in its Shipping Department. To aid the study, the company provided the following data regarding its Shipping Department and the customers served by the department:
| Customer L | Customer M | Customer N | All Customers |
|
| Number of line items picked | .. 280 | 160 | 90 | 335,000 |
| Number of boxes packaged | .. 50 |
20 | 15 | 46,800 |
| Number of deliveries loaded | .. 6 | 2 | 10 | 12,100 |
Required:
- Using the customer cost analysis shown in Exhibit 7A-2 as your guide, compute the following:
- The cost per minute of the resource supplied in the Shipping Department.
- The time-driven activity rate for each of Stahl's three activities.
- The total labor costs consumed by Customer L. Customer M. and Customer N.
- Using the capacity analysis shown in Exhibit 7A-3 as your guide, compute the following:
- The used capacity in minutes.
- The unused capacity in minutes.
- The unused capacity in number of employees. (Do not round your answer to a whole number.)
- The impact on expenses of matching capacity with demand. (Be sure to round your potential adjustment in the number of employees to a whole number.)
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Question 10?
Part 3: Activity-Based Costing
Similarly, Mr. Suncat has a couple of questions for you regarding the activity-based costing method. He has
provided the following additional information:
Cost
Pools
Initial customer
meeting
Purchasing
ingredients
Cost
Drivers
Number of hours
spent with
customer
Number of
purchase
requisitions
Direct Labor
hours
Estimated
Overhead
$15,000
$15,000
$40,000
$70,000
3. Custom Wedding Cake
Expected
Use of Cost
Drivers
4.5 hours
$10,000
1000
requisitions
5.5 hours
9.5 hours
Expected
Use of Cost
Driver:
Basic
Wedding
Cake
0.75 hour
Making and
baking the
wedding cakes
Decorating the
wedding cakes
Final customer
Direct Labor
hours
Number of
meeting and cake wedding cakes
delivery
a. Explain the difference between a job-order costing system and an activity-based costing system.
4200
150
requisitions
1.25 hour
1.75 hours
Expected
Use of Cost
Driver
Multi-Layer
Wedding
Cake
1.25 hours
1500 cakes
300
requisitions
2 hours
3 hours
Expected
Use of Cost
1700 cakes
Driver…
Please do not give solution in image format thanku
Chapter 7 Solutions
MANAG.ACCOUNTING-CONNECT ACCESS >CUSTOM<
Ch. 7.A - EXERCISE 7A-1 Time-Driven Activity-Based Costing...Ch. 7.A -
EXERCISE 7A-2 Time-Driven Activity-Based Costing...Ch. 7.A - EXERCISE 7A-3 Time-Driven Activity-Based Costing...Ch. 7.A - PROBLEM 7A-4 Time-Driven Activity-Based Costing LO...Ch. 7.A - PROBLEM 7A-5 Time-Driven Activity-Based Costing LO...Ch. 7 - Prob. 1QCh. 7 - Prob. 2QCh. 7 - Prob. 3QCh. 7 - What are unit-level, batch-level, product-level,...Ch. 7 - What types of costs should not be assigned to...
Ch. 7 - What are the two stages off allocation in...Ch. 7 - Why is the first stage of the allocation process...Ch. 7 - When activity-based costing is used, why do...Ch. 7 - Prob. 9QCh. 7 - Why is the form of activity-based costing...Ch. 7 - The Excel worksheet form that appears below is to...Ch. 7 - Prob. 2AECh. 7 - The Excel worksheet form that appears below is to...Ch. 7 - Prob. 1F15Ch. 7 - Prob. 2F15Ch. 7 - Prob. 3F15Ch. 7 - Prob. 4F15Ch. 7 - Prob. 5F15Ch. 7 - Prob. 6F15Ch. 7 - Prob. 7F15Ch. 7 - Prob. 8F15Ch. 7 - Prob. 9F15Ch. 7 - Prob. 10F15Ch. 7 - Prob. 11F15Ch. 7 - Prob. 12F15Ch. 7 - Prob. 13F15Ch. 7 - Prob. 14F15Ch. 7 - Prob. 15F15Ch. 7 - Prob. 1ECh. 7 - Prob. 2ECh. 7 - Prob. 3ECh. 7 - Prob. 4ECh. 7 - Prob. 5ECh. 7 - Prob. 6ECh. 7 - EXERCISE 7-7 First-Stage Allocations LO7-2
The...Ch. 7 - Prob. 8ECh. 7 - Prob. 9ECh. 7 - Prob. 10ECh. 7 - Prob. 11ECh. 7 - Prob. 12ECh. 7 - EXERCISE 7-13 Computing ABC Product Costs LO7-3,...Ch. 7 - Prob. 14ECh. 7 - Prob. 15ECh. 7 - Prob. 16PCh. 7 - Prob. 17PCh. 7 - Prob. 18PCh. 7 - Prob. 19PCh. 7 -
PROBLEM 7-20 Evaluating the Profitability of...
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
- 7arrow_forwardMTI makes three types of lawn tractors: M3100, M4100, and M6100. In the past, it allocated overhead to products using machine-hours. Last year, the company produced 8,000 units of M3100, 17,500 units of M4100, and 10,000 units of M6100 and had the following revenues and costs: Sales revenue Direct costs Direct materials Direct labor Variable overhead Setting up machines Processing sales orders Warehousing Operating machines Shipping Contribution margin Plant administration Gross profit MTI Activity Setting up machines Processing sales orders Warehousing Operating machines. Income Statement M3100 $ 9,400,000 3,300,000 610,000 M4100 $ 15,700,000 Cost Driver Production runs 4, 800, 800 860, 000 M6100 $ 14,200,000 Sales orders received Units held in inventory Machine-hours 3,100,000 1,730, 000 MTI's controller has heard about activity-based costing and puts together an employee team to recommend cost allocation bases. The employee team recommends the following. M3100 9 170 90 6, 200 Total…arrow_forwardPlease answer all partsarrow_forward
- Problem 2 Milky Corporation has provided the following data from its activity-based costing accounting system: Activity Cost Pools Designing products Setting up batches Assembling products Total Cost P1,372,448 P33,300 P126,160 Total Activity 7,798 product design hours 740 batch set-ups 6,640 assembly hours The activity rate for the "designing products" activity cost pool is answer must be in nearest peso A The activity rate for the "setting up batches" activity cost pool is answer should be in nearest peso A The activity rate for the "assembling products" activity cost pool is answer must be in nearest peso Aarrow_forwardSolve general accounting questionarrow_forwardQuestion 4.1 For its overhead costs, the wholesale distributor Janz Company uses activity-based costing. In terms of the company's annual overhead costs and its activity-based costing system the following data has been provided: Overhead Costs: Wages and salaries $380,000 Non-wage expenses 90,000 Total $470,000 Distribution of Resource Consumption: Activity Cost Pools Filling Orders Product Support Other Total Wages and salaries 20% 65% 15% 100% Non-wage expenses 25% 15% 60% 100% The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs. Shown below is the amount of activity for the year: Activity Cost Pool Filling orders Product support Annual Activity 3,100 orders 32 products Not applicable Other Instructions: Compute the activity rates for the Filling Orders and Product Support activity cost pools.arrow_forward
- Please do not give solution in image format thankuarrow_forward1arrow_forwardAllacating Selling and Administrative Expenses using Activity-Based Costing Shrute Inc. manufactures office copiers, which are sold to retailers. The price and cost of goods sold for each copier are as follows: Price $650 per unit Cost of goods sold 390 Gross profit $260 per unit In addition, the company incurs selling and administrative expenses of $220,070. The company wishes to assign these costs to its three major retail customers, The Warehouse, Kosmo Co., and Supply Universe. These expenses are related to its three major nonmanufacturing activities: customer service, sales order processing, and advertising support. The advertising support is in the form of advertisements that are placed by Shrute Inc. to support the retailer's sale of Shrute copiers to consumers. The budgeted activity costs and activity bases associated with these activities are: Budgeted Activity Activity Activity Base Cost Customer service $41,850 Number of service requests Sales order processing 18,720 Number…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Survey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Cost Accounting - Definition, Purpose, Types, How it Works?; Author: WallStreetMojo;https://www.youtube.com/watch?v=AwrwUf8vYEY;License: Standard YouTube License, CC-BY