Question
In: Accounting
Wellington Chocolate Company uses activity-based costing. The controller identified two activities and budgeted overhead costs based...
Wellington Chocolate Company uses activity-based costing. The controller identified two activities and budgeted overhead costs based on these activities:
Setting up equipment $280,000
Baking $5,800,000
Setting up equipment is based on setup hours, and baking is based on oven hours. Wellington produces two products, fudge, and cookies. Information on each product is as follows
| fudge | cookies | |
| Units produced | 8,000 | 445,000 |
| Setup hours | 4,000 | 1,000 |
| Oven hours | 5,000 | 35,000 |
Required (round your answers to the nearest whole dollar, unless otherwise directed):
1. Calculate the activity rate for setting up equipment
2. Calculate the activity rate for baking
3. How much total overhead is assigned to Fudge?
Solutions
Expert Solution
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| Part 1 and 2 | ||||
| Activity | Overhead cost | Total Activities | Activity Rate | |
| a | b | a/b | ||
| Setting up | $ 280,000 | 5,000 | $ 56 | |
| Baking | $ 5,800,000 | 40,000 | $ 145 | |
| Part 3 | ||||
| Activity rate | Activities | Overhead assigned | ||
| a | b | a*b | ||
| Settin up | $ 56 | 4,000 | $ 224,000 | |
| Bakint | $ 145 | 5,000 | $ 725,000 | |
| Overhead is assigned to fudge | $ 949,000 | |||
ekkarill92 answered 1 year agoRelated Solutions
Wellington Chocolate Company uses activity-based costing (ABC). The controller identified two activities and their budgeted costs:...
Wellington Chocolate Company uses activity-based costing (ABC).
The controller identified two activities and their budgeted
costs:
Setting up equipment
$598,000
Other overheard
$6,400,000
Setting up equipment is based on setup hours, and other overhead
is based on oven hours.
Wellington produces two products, Fudge and Cookies. Information on
each product is as follows:
Fudge
Cookies
Units produced
8,000
445,000
Setup hours
10,400
2,600
Oven hours
5,000
35,000
Required:
Round your answers to the nearest whole dollar, unless otherwise
directed.
1....
Comparing ABC and Plantwide Overhead Cost Assignments Wellington Chocolate Company uses activity-based costing (ABC). The controller...
Comparing ABC and
Plantwide Overhead Cost Assignments
Wellington Chocolate
Company uses activity-based costing (ABC). The controller
identified two activities and their budgeted costs:
Setting up equipment
$270,000
Other overheard
$2,304,000
Setting up equipment
is based on setup hours, and other overhead is based on oven
hours.
Wellington produces two products, Fudge and Cookies. Information on
each product is as follows:
Fudge
Cookies
Units produced
8,000
445,000
Setup hours
4,000
1,000
Oven hours
1,800
12,600
Required:
Round your answers to
the...
Comparing ABC and Plantwide Overhead Cost Assignments Wellington Chocolate Company uses activity-based costing (ABC). The controller...
Comparing ABC and Plantwide Overhead Cost Assignments
Wellington Chocolate Company uses activity-based costing (ABC).
The controller identified two activities and their budgeted
costs:
Setting up equipment
$322,000
Other overheard
$5,800,000
Setting up equipment is based on setup hours, and other overhead
is based on oven hours.
Wellington produces two products, Fudge and Cookies. Information on
each product is as follows:
Fudge
Cookies
Units produced
8,000
445,000
Setup hours
5,600
1,400
Oven hours
5,000
35,000
Required:
Round your answers to the...
Comparing ABC and Plantwide Overhead Cost Assignments Wellington Chocolate Company uses activity-based costing (ABC). The controller...
Comparing ABC and Plantwide Overhead Cost Assignments
Wellington Chocolate Company uses activity-based costing (ABC).
The controller identified two activities and their budgeted
costs:
Setting up equipment
$420,000
Other overheard
$5,208,000
Setting up equipment is based on setup hours, and other overhead
is based on oven hours.
Wellington produces two products, Fudge and Cookies. Information on
each product is as follows:
Fudge
Cookies
Units produced
8,000
445,000
Setup hours
5,600
1,400
Oven hours
4,200
29,400
Required:
Round your answers to the...
Comparing ABC and Plantwide Overhead Cost Assignments Wellington Chocolate Company uses activity-based costing (ABC). The controller...
Comparing ABC and Plantwide Overhead Cost Assignments
Wellington Chocolate Company uses activity-based costing (ABC).
The controller identified two activities and their budgeted
costs:
Setting up equipment
$720,000
Other overheard
$2,160,000
Setting up equipment is based on setup hours, and other overhead
is based on oven hours.
Wellington produces two products, Fudge and Cookies. Information on
each product is as follows:
Fudge
Cookies
Units produced
8,000
445,000
Setup hours
12,000
3,000
Oven hours
1,800
12,600
Required:
Round your answers to the...
Comparing ABC and Plantwide Overhead Cost Assignments Wellington Chocolate Company uses activity-based costing (ABC). The controller...
Comparing ABC and Plantwide Overhead Cost Assignments
Wellington Chocolate Company uses activity-based costing (ABC).
The controller identified two activities and their budgeted
costs:
Setting up equipment
$870,000
Other overheard
$5,800,000
Setting up equipment is based on setup hours, and other overhead
is based on oven hours.
Wellington produces two products, Fudge and Cookies. Information on
each product is as follows:
Fudge
Cookies
Units produced
8,000
445,000
Setup hours
12,000
3,000
Oven hours
5,000
35,000
Required:
Round your answers to the...
Comparing ABC and Plantwide Overhead Cost Assignments Wellington Chocolate Company uses activity-based costing (ABC). The controller...
Comparing ABC and Plantwide Overhead Cost Assignments
Wellington Chocolate Company uses activity-based costing (ABC).
The controller identified two activities and their budgeted
costs:
Setting up equipment
$230,000
Other overheard
$1,160,000
Setting up equipment is based on setup hours, and other overhead
is based on oven hours.
Wellington produces two products, Fudge and Cookies. Information on
each product is as follows:
Fudge
Cookies
Units produced
8,000
445,000
Setup hours
4,000
1,000
Oven hours
1,000
7,000
Required:
Round your answers to the...
Comparing ABC and Plantwide Overhead Cost Assignments Wellington Chocolate Company uses activity-based costing (ABC). The controller...
Comparing ABC and Plantwide Overhead Cost Assignments
Wellington Chocolate Company uses activity-based costing (ABC).
The controller identified two activities and their budgeted
costs:
Setting up equipment
$270,000
Other overheard
$2,160,000
Setting up equipment is based on setup hours, and other overhead
is based on oven hours.
Wellington produces two products, Fudge and Cookies. Information on
each product is as follows:
Fudge
Cookies
Units produced
8,000
445,000
Setup hours
4,000
1,000
Oven hours
1,800
12,600
Required:
Round your answers to the...
Company uses activity-based costing to determine product cost. The accounting department identified the following overhead activities,...
Company uses activity-based costing to determine product cost.
The accounting department identified the following overhead
activities, costs, and activity drivers for the coming year.
Activity Estimated cost Activity driver Activity capacity Setting
up equipment $120,000 Number of setups 300 Ordering materials
90,000 Number of orders 9,000 Maintaining machines 210,000 Machine
hours 21,000 Total overhead $420,000 The following actual results
were collected for the production of Model X and Model Y during the
year. Model X Model Y Units produced 8,000...
5)X Company uses an activity-based costing overhead allocation system. It has identified three activities - Material...
5)X Company uses an activity-based costing overhead allocation
system. It has identified three activities - Material handling,
Product testing, Packaging - and their respective cost drivers -
pounds of material, tests, packages. Budgeted activity costs in
2018 were as follows:
Activity
Budgeted Cost
Material handling
$104,700
Product testing
58,700
Packaging
53,000
The following 2018 cost driver information is available for one
of its products, Product A, and for all of its products (including
Product A):
Product A
All Products
pounds...
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