FUND.ACCT.PRIN.-CONNECT ACCESS
25th Edition
ISBN: 9781264217021
Author: Wild
Publisher: MCG
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Chapter C, Problem 1PSA
Problem C-1A Applying activity-based costing P1 P2 A1
Craftmore Machining produces machine tools for the construction industry. The following details about
Production Activity
Indirect labour
Indirect material
Other overhead
Grinding.............................
$320,000
Polishing............................ $13S,000
Product modification.................. 600,000
Providi ng power...................... $255,000
System calibration.................... 500,000
Additional information on the drivers for its production activities follows.
Grinding...................... 13,000 machine hours Providing power............ 17,000 direct labor hours
Polishing..................... 13,000 machine hours System calibration........... 400 batches
Product modification........... 1.500 engineering hours
Required
1. Compute the activity overhead rates using ABC. Form cost pools as appropriate.
2. Determine overhead costs to assign to the following jobs using ABC.
Number of units............. 2O0 units 2,500 Units
Machine hours.............. 550 MH 5,00 MH
Engineering hours........... 26 eng. hours 32 eng. hours
Batches ................... 30 batches 90 batches
Direct labor hours ........... 500 DLH 4.375 DLH
3. What is the overhead cost per unit for Job 3175? What is the overhead cost per unit for Job 4286? Check (3) Job 3175, $373.25 per unit
4. If the company used a plantwide overhead rate based on direct labor hours, what would be the overhead cost for each unit of Job 3175? for Job 4286?
5. Compare the overhead costs per unit computed in requirements 3 and 4 for each job.
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Landen Corporation uses a job-order costing system. At the beginning of the year, the company made the following estimates:
Direct labor-hours required to support estimated production
Machine-hours required to support estimated production
Fixed manufacturing overhead cost
100,000
50,000
$ 280,000
$ 2.80
$ 5.60
Variable manufacturing overhead cost per direct labor-hour
Variable manufacturing overhead cost per machine-hour
During the year, Job 550 was started and completed. The following information is available with respect to this job:
Direct materials
Direct labor cost
Direct labor-hours
Machine-hours
$ 216
$ 327
15
5
Required:
1. Assume that Landen has historically used a plantwide predetermined overhead rate with direct labor-hours as the allocation base.
Under this approach:
a. Compute the plantwide predetermined overhead rate.
b. Compute the total manufacturing cost of Job 550.
c. If Landen uses a markup percentage of 200% of its total manufacturing cost, what selling price would…
Question 1:
Moody Corporation uses a job-order costing system with a plantwide overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates:
Machine-hours required to support estimated production . . . . . . 100,000
Fixed manufacturing overhead cost . . . . . . . . . . . . . . . . . . . . . . . . $650,000
Variable manufacturing overhead cost per machine-hour . . . . . . . $3.00
Required:
1. Compute the predetermined overhead rate.
2. During the year, Job 400 was started and completed. The following information was available with respect to this job:
Direct materials requisitioned . . . . . . . . . . . . . . . . . . . . . . . . . . . . $450
Direct labor cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $210
Machine-hours used . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Compute the total manufacturing cost assigned to Job 400.
3. During the year, the company worked a…
Using the attached chart The overhead cost per unit of Product A under activity-based costing is what?
Chapter C Solutions
FUND.ACCT.PRIN.-CONNECT ACCESS
Ch. C - Prob. 1QSCh. C - Computing plantwide overhead rates P1 Chan Company...Ch. C - Computing overhead rates under ABC P2 Refer to the...Ch. C - Prob. 4QSCh. C - Prob. 5QSCh. C - Prob. 6QSCh. C - Prob. 7QSCh. C - Prob. 8QSCh. C - Prob. 9QSCh. C - Prob. 10QS
Ch. C - Prob. 11QSCh. C - Prob. 1ECh. C - Prob. 2ECh. C - Prob. 3ECh. C - Prob. 4ECh. C - Prob. 5ECh. C - Exercise C-6 Activity-based costing P2 Northwest...Ch. C - Prob. 8ECh. C - Prob. 9ECh. C - Prob. 10ECh. C - Prob. 11ECh. C - Prob. 12ECh. C - Problem C-1A Applying activity-based costing P1 P2...Ch. C - Prob. 2PSACh. C - Prob. 3PSACh. C - Prob. 4PSACh. C - Prob. CSPCh. C - Prob. 1DQCh. C - Complete the following for a traditional two-stage...Ch. C - What is the difference between operating...Ch. C - What is activity-based costing? What is its goal?Ch. C - What is a cost object?
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