Question
In: Accounting
Tioga Company manufactures sophisticated lenses and mirrors used in large optical telescopes. The company is now...
Tioga Company manufactures sophisticated lenses and mirrors used in large optical telescopes. The company is now preparing its annual profit plan. As part of its analysis of the profitability of individual products, the controller estimates the amount of overhead that should be allocated to the individual product lines from the following information.
| Lenses | Mirrors | |||
| Units produced | 24 | 24 | ||
| Material moves per product line | 22 | 12 | ||
| Direct-labor hours per unit | 240 | 240 | ||
The total budgeted material-handling cost is $61,440.
Required:
- Under a costing system that allocates overhead on the basis of direct-labor hours, the material-handling costs allocated to one lens would be what amount?
- Under a costing system that allocates overhead on the basis of direct-labor hours, the material-handling costs allocated to one mirror would be what amount?
- Under activity-based costing (ABC), the material-handling costs allocated to one lens would be what amount? The cost driver for the material-handling activity is the number of material moves.
- Under activity-based costing (ABC), the material-handling costs allocated to one mirror would be what amount? The cost driver for the material-handling activity is the number of material moves.
(For all requirements, Do not round your intermediate calculations.)
Solutions
Expert Solution
| Plantwide overhead rate = Total Budgeted material handling cost / Direct labor hours |
Total Budgeted material handling cost = $61,440
Direct labor hours = (240 hours * 24 units) + (240 hours * 24 units) = 11,520
Planwide overhead rate = $61,440 / 11,520 direct labor hours = $5.3333 per direct labor hour
Requirement 1:
Material-handling costs allocated to one lens
Material-handling cost allocated to lens = 24 lens * 240 direct labor hours * $5.3333 per direct labor hours = $30,720
Material-handling costs allocated to one lens = $30,720 / 24 units = $1,280 per lens
Requirement 2:
Material-handling costs allocated to one mirror
Material-handling cost allocated to mirrors = 24 mirrors * 240 direct labor hours * $5.3333 per direct labor hours = $30,720
Material-handling costs allocated to one mirror = $30,720 / 24 units = $1,280 per mirror
| Activity rate = Total Material handling costs / Total number of material moves |
Total Material handling costs = $61,440
Total number of material moves = 22 + 12 = 34
Activity rate = $61,440 / 34 moves = $1,807.0588
Requirement 3:
Material-handling costs allocated to one lens under Activity based costing
Material-handling cost allocated to lens = 22 material moves * $1,807.0588 per material move = $39,755
Material-handling costs allocated to one lens = $39,755 / 24 units = $1,656 per lens
Requirement 4:
Material-handling cost allocated to mirrors = 12 material moves * $1,807.0588 per material move = $21,685
Material-handling costs allocated to one mirror = $21,685 / 24 units = $904 per mirror
All the best...
ekkarill92 answered 9 months agoRelated Solutions
Tioga Company manufactures sophisticated lenses and mirrors used in large optical telescopes. The company is now...
Tioga Company manufactures sophisticated lenses and mirrors used
in large optical telescopes. The company is now preparing its
annual profit plan. As part of its analysis of the profitability of
individual products, the controller estimates the amount of
overhead that should be allocated to the individual product lines
from the following information.
Lenses
Mirrors
Units produced
22
22
Material moves per product line
17
7
Direct-labor hours per unit
230
230
The total budgeted material-handling cost is
$71,720.
Required:
Under...
Absorption- and Variable-Costing Income Statements San Mateo Optics, Inc., specializes in manufacturing lenses for large telescopes...
Absorption- and Variable-Costing Income Statements
San Mateo Optics, Inc., specializes in manufacturing lenses for
large telescopes and cameras used in space exploration. As the
specifications for the lenses are determined by the customer and
vary considerably, the company uses a job-order costing system.
Manufacturing overhead is applied to jobs on
the basis of direct labor hours, utilizing the absorption- or
full-costing method. San Mateo’s predetermined overhead rates for
20x1 and 20x2 were based on the following estimates.
20x1
20x2
Direct...
43.) Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models...
43.) Lens Care Inc. (LCI) manufactures specialized equipment for
polishing optical lenses. There are two models - one mainly used
for fine eyewear (F-32) and another for lenses used in binoculars,
cameras, and similar equipment (B-13).
The manufacturing cost of each unit is calculated using
activity-based costing, using the following manufacturing cost
pools:
Cost Pools
Allocation Base
Costing Rate
Materials handling
Number of parts
$
2.90
per part
Manufacturing supervision
Hours of machine time
$
14.85
per hour
Assembly
Number...
Bowman Specialists Inc. (BSI) manufactures specialized equipment for polishing optical lenses. There are two models—one (A–25)...
Bowman Specialists Inc. (BSI) manufactures specialized equipment
for polishing optical lenses. There are two models—one (A–25)
principally used for fine eyewear and the other (A–10) for lenses
used in binoculars, cameras, and similar equipment.
The following table shows the manufacturing cost of each unit is
calculated, using activity-based costing, for these manufacturing
cost pools.
Cost Pools
Allocation Base
Costing Rate
Materials handling
Number of parts
$
3.45
per part
Manufacturing supervision
Hours of machine time
$
24.30
per hour
Assembly...
Bowman Specialists Inc. (BSI) manufactures specialized equipment for polishing optical lenses. There are two models—one (A–25)...
Bowman Specialists Inc. (BSI) manufactures specialized equipment
for polishing optical lenses. There are two models—one (A–25)
principally used for fine eyewear and the other (A–10) for lenses
used in binoculars, cameras, and similar equipment.
The following table shows the manufacturing cost of each unit is
calculated, using activity-based costing, for these manufacturing
cost pools.
Cost Pools
Allocation Base
Costing Rate
Materials handling
Number of parts
$
3.45
per part
Manufacturing supervision
Hours of machine time
$
24.30
per hour
Assembly...
Bowman Specialists Inc. (BSI) manufactures specialized equipment for polishing optical lenses. There are two models—one (A–25)...
Bowman Specialists Inc. (BSI) manufactures specialized equipment
for polishing optical lenses. There are two models—one (A–25)
principally used for fine eyewear and the other (A–10) for lenses
used in binoculars, cameras, and similar equipment.
The following table shows the manufacturing cost of each unit is
calculated, using activity-based costing, for these manufacturing
cost pools.
Cost Pools
Allocation Base
Costing Rate
Materials handling
Number of parts
$
3.80
per part
Manufacturing supervision
Hours of machine time
$
24.40
per hour
Assembly...
Bowman Specialists Inc. (BSI) manufactures specialized equipment for polishing optical lenses. There are two models—one (A–25)...
Bowman Specialists Inc. (BSI) manufactures specialized equipment
for polishing optical lenses. There are two models—one (A–25)
principally used for fine eyewear and the other (A–10) for lenses
used in binoculars, cameras, and similar equipment. The following
table shows the manufacturing cost of each unit is calculated,
using activity-based costing, for these manufacturing cost pools.
Cost Pools Allocation Base Costing Rate Materials handling Number
of parts $ 3.30 per part Manufacturing supervision Hours of machine
time $ 23.40 per hour Assembly...
Bowman Specialists Inc. (BSI) manufactures specialized equipment for polishing optical lenses. There are two models—one (A–25)...
Bowman Specialists Inc. (BSI) manufactures specialized equipment
for polishing optical lenses. There are two models—one (A–25)
principally used for fine eyewear and the other (A–10) for lenses
used in binoculars, cameras, and similar equipment.
The following table shows the manufacturing cost of each unit is
calculated, using activity-based costing, for these manufacturing
cost pools.
Cost Pools
Allocation Base
Costing Rate
Materials handling
Number of parts
$
3.70
per part
Manufacturing supervision
Hours of machine time
$
24.20
per hour
Assembly...
Bowman Specialists Inc. (BSI) manufactures specialized equipment for polishing optical lenses. There are two models—one (A–25)...
Bowman Specialists Inc. (BSI) manufactures specialized equipment
for polishing optical lenses. There are two models—one (A–25)
principally used for fine eyewear and the other (A–10) for lenses
used in binoculars, cameras, and similar equipment.
The following table shows the manufacturing cost of each unit is
calculated, using activity-based costing, for these manufacturing
cost pools.
Cost Pools
Allocation Base
Costing Rate
Materials handling
Number of parts
$
3.40
per part
Manufacturing supervision
Hours of machine time
$
23.60
per hour
Assembly...
Bowman Specialists Inc. (BSI) manufactures specialized equipment for polishing optical lenses. There are two models—one (A–25)...
Bowman Specialists
Inc. (BSI) manufactures specialized equipment for polishing optical
lenses. There are two models—one (A–25) principally used for fine
eyewear and the other (A–10) for lenses used in binoculars,
cameras, and similar equipment.
The following table
shows the manufacturing cost of each unit is calculated, using
activity-based costing, for these manufacturing cost pools.
Cost Pools
Allocation Base
Costing Rate
Materials handling
Number of parts
$
3.40
per part
Manufacturing supervision
Hours of machine time
$
23.60
per hour
Assembly...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Toady and Froggy were running a vegan cafe together. The business was having financial difficulties.Betelguese, who...
- 1. The following questions concern Jesse Gelsinger who suffered from partial OTC. a. In the...
- Pittman Company is a small but growing manufacturer of telecommunications equipment. The company has no sales...
- TzeMay was one of the first women engineering students at ABC University. She graduated in 1995...
- Use the following information to calculate these various solvency measures: a) NWC, B) WCR, c) Current...
- The files SpeedControl.java and SpeedControlPanel.java contain a program (and its associated panel) with a circle that...
- Calculate the ideal age of a spouse. Enter either m or f from the keyboard in...
ADVERTISEMENT