Question
In: Accounting
Two-Stage ABC for Manufacturing Vollrath Manufacturing, a division of The Vollrath Company, manufactures restaurant equipment. Assume...
Two-Stage ABC for Manufacturing
Vollrath Manufacturing, a division of The Vollrath Company,
manufactures restaurant equipment. Assume the company has
determined the following activity cost pools and cost driver levels
for the year:
| Activity Cost Pool | Activity Cost | Activity Cost Driver | |
|---|---|---|---|
| Machine setup | $ 750,000 | 18,750 | setup hours |
| Material handling | 121,600 | 3,800 | tons of materials |
| Machine operation | 552,500 | 16,250 | machine hours |
The following data are for the production of single batches of two
products, Equipment Stands and Charbroilers during the month of
August:
|
Equipment Stands |
Charbroilers | |
|---|---|---|
| Units produced | 100 | 50 |
| Machine hours | 8 | 25 |
| Direct labor hours | 400 | 1,200 |
| Direct labor cost | $ 10,000 | $ 30,000 |
| Direct materials cost | $ 48,000 | $ 125,000 |
| Tons of materials | 4 | 14 |
| Setup hours | 6 | 36 |
Determine the unit costs of Equipment Stands and Charbroilers using
ABC. (Round answers to the nearest cent.)
Equipment Stands
$Answer
Charbroilers
$Answer
Solutions
Expert Solution
1. Activity rate
| Activity | Cost Pool | / | Cost Driver | = | Activity Rate |
| Machine Setup | $750,000 | / | 18,750 setup hours | = | $40 per setup hour |
| Material handling | $121.600 | / | 3,800 tons | = | $32 per ton |
| Machine operations | $552,500 | / | 16,250 machine hours | = | $34 per machine hour |
2. Allocation of overhead cost
Equipment Stands
| Activity | Cost Driver | x | Activity Rate | = | Overhead cost |
| Machine Setup | 6 setup hours | x | $40 per setup hour | = | $240 |
| Material handling | 4 tons | x | $32 per ton | = | $128 |
| Machine operations | 8 machine hours | x | $34 per machine hour | = | $272 |
| Overhead cost | = | $640 |
Charbroilers
| Activity | Cost Driver | x | Activity Rate | = | Overhead cost |
| Machine Setup | 36 setup hours | x | $40 per setup hour | = | $1,440 |
| Material handling | 14 tons | x | $32 per ton | = | $448 |
| Machine operations | 25 machine hours | x | $34 per machine hour | = | $850 |
| Overhead cost | = | $2,738 |
3. Unit Cost
| Particulars | Equipment Stands | Charbroilers |
| Direct Materials | $48,000 | $125,000 |
| Direct Labor | $10,000 | $30,000 |
| Overhead cost | $640 | $2,738 |
| Total Product Cost | $58,640 | $157,738 |
| Number of Units | 100 | 50 |
| Unit Cost | $586.40 | $3,154.76 |
All the best...
ekkarill92 answered 1 year agoRelated Solutions
Two-Stage ABC for Manufacturing Assume Sherwin-Williams Company, a large paint manufacturer, has determined the following activity...
Two-Stage ABC for Manufacturing
Assume Sherwin-Williams Company, a large paint manufacturer, has
determined the following activity cost pools and cost driver levels
for the latest period:
Activity Cost Pool
Activity Cost
Activity Cost Driver
Machine setup
$900,000
2,500 setup hours
Material handling
820,000
4,000 material moves
Machine operation
400,000
20,000 machine hours
The following data are for the production of single batches of
two products, Mirlite and Subdue:
Mirlite
Subdue
Gallons produced
60,000
25,000
Direct labor hours
400
250
Machine...
Two-Stage ABC for Manufacturing Assume Sherwin-Williams Company, a large paint manufacturer, has determined the following activity...
Two-Stage ABC for Manufacturing
Assume Sherwin-Williams Company, a large paint manufacturer, has
determined the following activity cost pools and cost driver levels
for the latest period:
Activity Cost Pool
Activity Cost
Activity Cost Driver
Machine setup
$990,000
2,500 setup hours
Material handling
860,000
5,000 material moves
Machine operation
200,000
20,000 machine hours
The following data are for the production of single batches of
two products, Mirlite and Subdue:
Mirlite
Subdue
Gallons produced
50,000
30,000
Direct labor hours
400
250...
Two-Stage ABC for Manufacturing Assume Sherwin-Williams Company, a large paint manufacturer, has determined the following activity...
Two-Stage ABC for Manufacturing
Assume Sherwin-Williams Company, a large paint manufacturer, has
determined the following activity cost pools and cost driver levels
for the latest period:
Activity cost pool
Activity cost
Activity cost driver
Machine setup
$950,000
2,500 setup hours
Material handling
620,000
5,000 material moves
Machine operation
200,000
20,000 machine hours
The following data are for the production of single batches of
two products, Mirlite and Subdue:
Mirlite
Subdue
Gallons produced
60,000
10,000
Direct labor hours
500
350
Machine...
Two-Stage ABC for Manufacturing Detroit Foundry, a large manufacturer of heavy equipment components, has determined the...
Two-Stage ABC for Manufacturing
Detroit Foundry, a large manufacturer of heavy equipment
components, has determined the following activity cost pools and
cost driver levels for the year:
Activity Cost Pool
Activity Cost
Activity Cost Driver
Machine setup
$588,000
12,000 setup hours
Material handling
108,000
2,000 material moves
Machine operation
500,000
10,000 machine hours
The following data are for the production of single batches of
two products, C23 Cams and U2 Shafts during the month of
August:
C23 Cams
U2 Shafts...
Two-Stage ABC for Manufacturing with Variances Montreat Manufacturing has developed the following activity cost pool information...
Two-Stage ABC for Manufacturing with Variances
Montreat Manufacturing has developed the following activity cost
pool information for its 2016 manufacturing activities:
Budgeted Activity Cost
Activity Cost Driver at Practical Capacity
Purchasing and materials handling
$2,700,000
900,000 kilograms
Setup
2,800,000
1,120 setups
Machine operations
3,816,000
12,000 hours
First unit inspection
200,000
1,000 batches
Packaging
1,000,000
312,500 units
Actual 2016 production information is as follows:
Standard Product A
Standard Product B
Specialty Products
Units
150,000
100,000
50,000
Batches
100
80
600
Setups*...
The New York Division of MVP Sports Equipment Company manufactures baseball gloves. Two production departments are...
The New York Division of MVP Sports Equipment Company
manufactures baseball
gloves. Two production departments are used in sequence:
the Cutting Department
and the Stitching Department. In the Cutting Department,
direct material, consisting
of imitation leather is placed into production at the
beginning of the process. Direct
labor and manufacturing overhead costs are incurred
uniformly throughout the
process. The material is rolled to make it softer, and
is then cut into the pieces
needed to produce baseball gloves. The predetermined...
Transfer pricing company is a two division firm, consisting of a manufacturing division and a distribution...
Transfer pricing company is a two division firm, consisting of a
manufacturing division and a distribution division. Manufacturing
division produces a single product, called product X. The cost of
producing product X consists of a variable cost of $50 per unit,
and a fixed cost of $100 per unit. This fixed cost per unit is
calculated assuming that Manufacturing runs at its capacity of
10,000 units. Assume there is an external customer that contracts
with Manufacturing to buy up to...
VI. ABC Manufacturing Company is considering two new projects, each requiring an equipment investment of $22,000....
VI.
ABC Manufacturing Company is considering two new projects, each
requiring an equipment investment of $22,000. Each project will
last for 3 years and produce the following annual net cash
inflows.
Year
BB
CC
1
$ 10,000
$14,000
2
10,000
10,000
3
10,000
6,000
Total
$30,000
$30,000
The equipment's salvage value is zero for each machine. Cepeda
uses straight-line depreciation. Cepeda's minimum required rate of
return is 12%.
Instructions
(a) Compute each project's payback period. (Round to...
ABC Corporation is a listed company in the business of manufacturing industrial equipment, and is domiciled...
ABC Corporation is a listed company in the business of
manufacturing industrial equipment, and is domiciled in Zambia. The
Financial Manager of ABC Corporation has identified two projects to
finance for the next five years. One project is in Australia and
the other project is in Zambia. The total funding required for the
Australian and Zambian Project is AUD5 Million, and K35 Million
Kwacha respectively. Based on the above information, answer the
following questions:
A. Discuss the primary funding sources...
1. The New York Division of MVP Sports Equipment Company manufactures baseball gloves. Two production departments are...
1.
The New York Division of MVP Sports Equipment
Company manufactures baseball
gloves. Two production departments are
used in sequense: the Cutting Department
and the Stitching Department. In the
Cutting Department, direct material, consisting
of imitation leather is placed into production at
the beginning of the process. Direct
labor and manufacturing overhead costs are incurred
uniformly throughout the
process. The material is rolled to make
it softer, and is then cut into the pieces
needed to produce baseball gloves. The
predetermined overhead rate is 150%...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- What are the benefits of doing a pilot program before a full scale rollout of a...
- It is a calm summer day in southeast Iowa at the Ottumwa air traffic control radar...
- 1. Write a detailed article on Evolution of attacks on the internet & web [your article...
- Analyze the role of the contingency plan coordinator (CPC) in the scope of preparing a BIA....
- Amazing Manufacturing, Inc., has been considering the purchase of a new manufacturing facility for $500,000. The...
- LANGUAGE: JAVA Create a New Project called YourLastNameDomainName. Write a DomainName class that encapsulates the concept...
- On January 1, 2015 $20,000,000 of 20 year bonds were issued with a coupon rate of...
ADVERTISEMENT