Question
In: Accounting
Stage 2 ABC for Manufacturing: Reassigning Costs to Cost Objects Woodland Corporation has developed the following...
Stage 2 ABC for Manufacturing: Reassigning Costs to Cost
Objects
Woodland Corporation has developed the following activity cost
information for its manufacturing activities:
| Activity | Activity cost | |
|---|---|---|
| Machine setup | $ 70.00 | per batch |
| Movement | 12.00 | per batch move |
| 0.12 | per pound | |
| Drilling | 5.00 | per hole |
| Welding | 3.00 | per inch |
| Shaping | 20.00 | per hour |
| Assembly | 16.00 | per hour |
| Inspection | 1.50 | per unit |
Filling an order for a batch of 100 fireplace inserts (each insert
weighing 50 pounds) required the following:
- Three batch moves
- Two sets of inspections
- Drilling six holes in each unit
- Completing 90 inches of welds on each unit
- Thirty minutes of shaping for each unit
- One hour of assembly per unit
Determine the activity cost of converting the raw materials into 100 fireplace inserts.
Solutions
Expert Solution
| Activity | Activity Costs | Measure | Unit | Requirments for a batch of 100 fireplace | Measure | Total Unit for Costing | Measure | Total Costs |
| Machine Set Up | 70 | per batch | 100 | 1 | batch | 1 | batch | $ 70.00 |
| Movement | 12 | per batch move | 100 | 3 | batch moves | 3 | batch moves | $ 36.00 |
| Movement | 0.12 | per pound | 100 | 50 | pounds | 5000 | pounds | $ 600.00 |
| Drilling | 5 | per hole | 100 | 6 | holes per unit | 600 | holes | $ 3,000.00 |
| Welding | 3 | per inch | 100 | 90 | inches per unit | 9000 | inches | $ 27,000.00 |
| Shaping | 20 | per hour | 100 | 30 | minutes per unit | 50 | hours | $ 1,000.00 |
| Assembly | 16 | per hour | 100 | 1 | hour per unit | 100 | hours | $ 1,600.00 |
| Inspection | 1.5 | per unit | 100 | 2 | Inspection | 200 | units | $ 300.00 |
| Total | $ 33,606.00 |
ekkarill92 answered 3 years agoRelated Solutions
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