Question
In: Accounting
Randel Manufacturing has five activity cost pools and two products (a budget tape vacuum and a...
Randel Manufacturing has five activity cost pools and two products (a budget tape vacuum and a deluxe tape vacuum). Information is presented below:
Cost Drivers by Product
Activity Cost Pool Cost Driver Est. Overhead Budget Deluxe
Ordering and Receiving Orders $ 130,000 600 400
Machine Setup Setups 297,000 500 400
Machining Machine hours 1,000,000 150,000 100,000
Assembly Parts 1,600,000 1,200,000 800,000
Inspection Inspections 300,000 550 450
Instructions
Compute the overhead cost per unit for each product. Production is 700,000 units of Budget and 200,000 units of Deluxe. Round your answer to the nearest cent.
Solutions
Expert Solution
| Solution: A | ||||||||
| Calculation of the Cost Driver Rate | ||||||||
| Cost Driver Rate = Activity Cost / Cost Driver | ||||||||
| Activity Cost / Cost Driver = | ||||||||
| Activity | Cost Driver | Activity Cost | "/" | Cost Driver | " = " To | Cost Driver Rate | ||
| Ordering and Receiving | No. of Orders | $ 130,000 | "/" | 1,000 | " = " To | $ 130.00 | Per Direct Labor Hrs | |
| Machine Set-ups | Set-ups | $ 297,000 | "/" | 900 | " = " To | $ 330.00 | Per Direct Labor Hrs | |
| Machining | No. Machining Hrs | $ 1,000,000 | "/" | 250,000 | " = " To | $ 4.00 | Per Set-up | |
| Assembly Parts | No. of Assembly | $ 1,600,000 | "/" | 2,000,000 | " = " To | $ 0.80 | Per Inspection | |
| Inspection Parts | No. of Inspection | $ 300,000 | "/" | 1,000 | " = " To | $ 300.00 | Per Inspection | |
| Total | $ 3,327,000 | |||||||
| Solution: B | ||||||||
| Calculation of the Overhead Cost Per unit of Budget | ||||||||
| Activity | Activity Used | "X " By | Cost Driver rate | Cost | ||||
| Overhead Cost: | ||||||||
| Ordering and Receiving | 600 | "X " By | $ 130.00 | $ 78,000 | ||||
| Machine Set-ups | 500 | "X " By | $ 330.00 | $ 165,000 | ||||
| Machining | 150,000 | "X " By | $ 4.00 | $ 600,000 | ||||
| Assembly Parts | 1,200,000 | "X " By | $ 0.80 | $ 960,000 | ||||
| Inspection Parts | 550 | "X " By | $ 300.00 | $ 165,000 | ||||
| Total Cost | $ 1,968,000 | |||||||
| Divide By | "/" By | |||||||
| Total Units Produced | 700,000 | |||||||
| Cost Per Unit | $ 2.81 | |||||||
| Calculation of the Overhead Cost Per unit of Deluxe | ||||||||
| Activity | Activity Used | "X " By | Cost Driver rate | Cost | ||||
| Overhead Cost: | ||||||||
| Ordering and Receiving | 400 | "X " By | $ 130.00 | $ 52,000 | ||||
| Machine Set-ups | 400 | "X " By | $ 330.00 | $ 132,000 | ||||
| Machining | 100,000 | "X " By | $ 4.00 | $ 400,000 | ||||
| Assembly Parts | 800,000 | "X " By | $ 0.80 | $ 640,000 | ||||
| Inspection Parts | 450 | "X " By | $ 300.00 | $ 135,000 | ||||
| Total Cost | $ 1,359,000 | |||||||
| Divide By | "/" By | |||||||
| Total Units Produced | 200,000 | |||||||
| Cost Per Unit | $ 6.80 | |||||||
| Answer = |
 ekkarill92 answered 1 year agoRelated SolutionsSonoma Manufacturing has five activity cost pools and two products (a budget tape vacuum and a...Sonoma Manufacturing has five activity cost pools and two
products (a budget tape vacuum and a deluxe tape vacuum).
Information is presented below:
Cost
Drivers by Product
Activity Cost
Pool Cost
Driver Est.
Overhead Budget
Deluxe
Ordering and
Receiving Orders $ 120,000 600 400
Machine
Setup Setups 297,000 500 400
Machining Machine
hours 1,000,000 150,000 100,000
Assembly Number
of
Parts 1,600,000 1,400,000 800,000
Inspection Inspections 300,000 550 450
Instructions
Compute the estimated overhead cost per unit for each product.
Production is 700,000 units of Budget and 200,000 units of Deluxe.
Round your answer to the nearest cent.
Assume Sonoma used a more traditional OH...
Sonoma Manufacturing has five activity cost pools and two products (a budget tape vacuum and a...
Sonoma Manufacturing has five activity cost pools and two
products (a budget tape vacuum and a deluxe tape vacuum).
Production is 700,000 units of Budget and 200,000 units of Deluxe.
Information is presented below:
Cost Drivers by Product
Activity Cost Pool
Cost Driver
Estimated Overhead
Budget
Deluxe
Ordering and Receiving
Orders
$120,000
600
400
Machine Setup
Setups
$297,000
500
400
Machining
Machine hours
$1,000,000
150,000
100,000
Assembly
Parts
$1,400,000
1,200,000...
Flynn Industries has three activity cost pools and two products. It expects to produce 2,560 units...Flynn Industries has three activity cost pools and two products.
It expects to produce 2,560 units of Product BC113 and 1,220 of
Product AD908. Having identified its activity cost pools and the
cost drivers for each pool, Flynn accumulated the following data
relative to those activity cost pools and cost drivers. Annual
Overhead Data Expected Use of Cost Drivers per Product Activity
Cost Pools Cost Drivers Estimated Overhead Expected Use of Cost
Drivers per Activity Product BC113 Product AD908 Machine...
Rocky Biking Company has four activity cost pools and two different models of bike: Standard and...Rocky Biking Company has four activity cost pools and two
different models of bike: Standard and Adventure. Below is the cost
information:
Cost Drivers by Model
Activity Cost
Pool
Cost Driver Est.
Overhead Standard
Adventure
Ordering and
Receiving
Orders
$210,000
750
300
Machine
Setup
Setups
135,000
150
300
Assembly
Parts
1,125,000
225,000
375,000
Inspection
Inspections
720,000
1,050
750
Instructions
Calculate the overhead cost per unit for each product.
Production is 5,000 units of Standard and 3,000 units of...
The controller for Vitrina Inc. has established the following activity cost pools and cost drivers. ...The controller for Vitrina Inc. has established the following
activity cost pools and cost drivers.
Budgeted
Budgeted
Overhead
Level for
Activity Cost Pool Cost Cost
Driver
Cost Driver
Machine setups
$200,000
Number of
setups 160
Material handling
100,000
Weight of
material 50,000 kilograms
Waste
control
50,000
Weight of
chemicals
10,000 kilograms
Quality control
75,000
Number of
inspections 300
Other overhead costs
200,000
Machine
hours 20,000...
Assigning manufacturing overhead cost to activity pools is referred to as first-stage allocation because costs are...Assigning manufacturing overhead cost to activity pools is
referred to as first-stage allocation because costs are assigned
first to the activity pools before being assigned to
a.
cost objects.
b.
activity objects.
c.
activity drivers.
d.
cost drivers.
Omer Limited produces and sells electronic sound equipment. The
company has production capacity of 20,000 units and currently
production schedule is for 18,000 units. Each unit has a selling
price of $25, variable product cost of $15, and variable selling
cost of...
The controller for Tulsa Medical Supply Company has established the following activity cost pools and cost...The controller for Tulsa Medical Supply Company has established
the following activity cost pools and cost drivers.
Activity Cost Pool
Budgeted Overhead Cost
Cost Driver
Budgeted
Level for Cost
Driver
Pool Rate
Machine setups
$
440,000
Number of setups
110
$
4,000
per setup
Material handling
105,000
Weight of raw material
35,000
lb.
$
3
per pound
Hazardous waste control
60,000
Weight of hazardous chemicals used
6,000
lb.
$
10
per pound
Quality control
225,000
Number of inspections
3,000
$...
The Blossum Company has an activity –based costing system with three activity cost pools-Design, Marketing, and...
The Blossum Company has an activity –based costing
system with three activity cost pools-Design, Marketing, and Other.
The company’s overhead costs, which consist of equipment
depreciation and indirect labor, have been allocated to the cost
pools already.
Costs in the Design cost pool are assigned to products
based on Direct Labor Hours (DLH’s) and the costs in the Marketing
cost pool are assigned to products based on the number of cases.
Costs in the other cost pool are not assigned...
Corporation has an activity-based costing system with three activity cost pools—Processing, Supervising, and Other. In the...Corporation has an activity-based costing system with three
activity cost pools—Processing, Supervising, and Other. In the
first stage allocations, costs in the two overhead accounts,
equipment expense and indirect labor, are allocated to the three
activity cost pools based on resource consumption. Data used in the
first stage allocations follow:
Overhead costs:
Equipment expense
$73,000
Indirect labor
$1,000
Distribution of Resource Consumption Across Activity Cost
Pools:
Processing
Supervising
Other
Equipment expense
20%
10%
70%
Indirect labor
20%
20%
60%
In...
Diehl Corporation uses an activity-based costing system with three activity cost pools. The company has provided...
Diehl Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity based costing system: Costs: Manufacturing overhead $ 480,000 Selling and administrative expenses 100,000 Total $ 580,000 Distribution of resource consumption: Activity Cost Pools Order Size Customer Support Other Total Manufacturing overhead 5% 85% 10% 100% Selling and administrative expenses 60% 20% 20% 100% The "Other" activity cost pool consists of the costs of idle capacity...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
ADVERTISEMENT
|