Connect Access Card For Fundamental Accounting Principles
24th Edition
ISBN: 9781260158526
Author: John J Wild
Publisher: McGraw-Hill Education
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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.
Chapter C Solutions
Connect Access Card For Fundamental Accounting Principles
Ch. 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?Ch. C - What is an activity cost driver?Ch. C - What company circumstances especially encourage...Ch. C - Identify at least four typical cost pools for...Ch. C - In activity-based costing, costs in a cast pool...Ch. C - Prob. 10DQ
Ch. C - Prob. 11DQCh. 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. 1ECh. C - Prob. 2ECh. C - Prob. 3ECh. C - Prob. 4ECh. C - Prob. 5ECh. C - Exercise C-6 Activity-based costing P2 Northwest...Ch. C - Problem C-1A Applying activity-based costing P1 P2...Ch. C - Prob. 2APSACh. C - Prob. 3APSACh. C - Prob. 4APSACh. C - Prob. 5APSACh. C - Prob. 6APSACh. C - Prob. CSP
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