FUNDAMENTAL ACCOUNTING PRINCIPLES
25th Edition
ISBN: 9781264303236
Author: Wild
Publisher: MCG
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Chapter C, Problem 6E
Exercise C-6 Activity-based costing P2
Northwest Company produces two types of glass shelving, rounded edge and squared edge, on the same production line. For the current period, the company reports the following data.
Rounded edge squared edge
Total
Direct materials............................... $19,000 $43,200 $ 62,200
Direct labor................................... 12,200 23,800 36,000
Total cost.....................................
$67.800 $138,400 $206,200
Ouantity produced............................. 10,500 ft. 11,100 ft.
Average tost per ft (rounded).................... $ 6.46 $ 9.82
Northwest's controller wishes to apply activity-based costing (ABC) to allocate the $108,000 of overhead costs incurred by the two product lines to see whether cost per foot would change markedly from that reported above. She has collected the following information.
Overhead cost category (actually cost pool)costs
Supervision ................................................
$ 5,400
56,500
Assembly line preparation.....................................
46,000
Total overhead..............................................
$108,000
She has also collected the following information about the cost drivers for each category (cost pool) and the amount of each driver used by the two product lines.
Overhead cost category Driver Usege (actually cost pool) Rounded edge squared edge Total Supervision ........................ Direct labor cost ($$12,200 $23,800 36,000 Depreciation of machinery .....Machine hours 500 hours 1,500hours 2,000hours Assembly line preparation......Setups (number) 40 times 210 times 250 times
Required
1. Assign these three overhead cost pools to each of the two products using ABC.
2. Determine average cost per foot for each of the two products using ABC. Check (2: Rounded edge. 15.19: Squared edge. $10.76
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PROCESS COSTING I
Discussion Question
J&G Manufacturing makes a single product by way of three separate processes. Details of
production for the month ending June 30 were as follows:
Process
Process 1 Process 2 | Process 3
$390,000
Input material:
Material added
16,250 kg
$36,750
$92,200
$63,000
Direct Labour cost
$57.300
$61,000
$112,800
$97,080
Manufacturing Overhead
Normal losses
8%
6%
6%
Output
|Scrap value of losses
13,250 kg
12,000 kg
$16.00/kg| $32.00/kg
13,750 kg
The nature of the process requires equipment to be cleaned at the end of each month; hence
there is no opening or closing stock of product in process.
Required:
i) The process account for each process: and
ii)
The abnormal loss/gain account(s) showing J & G Manufacturing true loss/gain.
problem 5
Marites Company employs standard absorption system for product costing. The standard cost of this product is as follows: Raw Materials – P14.50; Direct Labor for 2 hours @ P8/hr is P16; Manufacturing overhead for 2 hours @ P11/hr is P22. The total cost/unit (14.50+16+22) = P52.50. The manufacturing overhead rate is based upon normal annual activity level of 600,000 direct labor hours. The company planned to produce 25,000 units each month during 2020. Budgeted factory overhead for 2020 is composed of P3,600,000 variable and P3,000,000 fixed. During April 2021, 26,000 units of product were produced using 53,500 direct labor hours at a cost of P433,350. Actual manufacturing overhead for the month was P260,000 fixed and P315,000 variable. The total manufacturing overhead applied during April was P572,000. The variable overhead spending variance must be:
Chapter C Solutions
FUNDAMENTAL ACCOUNTING PRINCIPLES
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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