Question
In: Accounting
Part 1. New Firm uses an ABC system. The system includes 4 cost pools: mixing, machining...
Part 1. New Firm uses an ABC system. The system includes 4 cost pools: mixing, machining finishing and packing. Mixing is allocated on the basis of DM cost; machining is allocated on the basis of machine hours; finishing is allocated on the basis of DL hours and packing is allocated on the basis of product weight. At the beginning of this year, the following estimates were made
Direct Materials $734,000
Direct Labor 953,000
Mixing cost 377,000
Machining cost 721,000
Finishing cost 467,000
Packing cost 167,000
Units produced 800
Average weight per unit 89 ounces
DL hours 32,000
Machine hours 306,000
Job 491 was produced on June 16. It contained $3,890 in DM and $8,400 in DL. It weighed 52 ounces. Production required 416 DLH and 981 machine hours.
- Assuming the firm uses a traditional job costing system applied on the basis of DLH, what is the cost of Job 491?
- Assuming the firm uses an ABC system, what is the cost of Job 491?
Solutions
Expert Solution
| Calculation of total cost using absorption costing | |||||
| Particulars | Cost | ||||
| Mixing | 377000 | ||||
| Machining | 721000 | ||||
| Finishing | 467000 | ||||
| Packing | 167000 | ||||
| Total Overhead cost | 1732000 | ||||
| Total Direct labour hrs | 32000 | ||||
| Overhead absorption per hr | 54.125 | ||||
| Cost of Job 491 | |||||
| Particulars | Amt | ||||
| Direct material | 3,890 | ||||
| Direct labour | 8,400 | ||||
| Overhead cost | 22,516 | ||||
| 54.125/hr X 416labour hrs | |||||
| Total Cost | 34,806 | ||||
| Calculation of total cost using Activity Based costing | |||||
| Mixing | Machining | Finishing | Packing | ||
| A | Cost | 377000 | 721000 | 467000 | 167000 |
| B | Activity | DM Cost | Machine hrs | DL hrs | Weight of product |
| C | Total respectivie activity | 734000 | 306000 | 32000 | 71200 (800*89) |
| D | Per activity cost (A/C) | 0.514 | 2.356 | 14.594 | 2.346 |
| Particulars | Amt | Amt | |||
| Direct material | 3,890 | ||||
| Direct labour | 8,400 | ||||
| Overheads | |||||
| Mixing | |||||
| (3890 X 0.514) | 1,998 | ||||
| Machining | |||||
| (981*2.356) | 2,311 | ||||
| Finishing | |||||
| (416DL hrs X 14.594) | 6,071 | ||||
| Packing | |||||
| (52 ounces X 2.346/ounce) | 122 | ||||
| Total overheads | 10,502 | ||||
| Total cost | 22,792 |
ekkarill92 answered 2 years agoRelated Solutions
New Firm uses an ABC system. The system includes 4 cost pools: mixing, machining finishing and...
New Firm uses an ABC system. The system includes 4 cost pools:
mixing, machining finishing and packing. Mixing is allocated on the
basis of DM cost; machining is allocated on the basis of machine
hours; finishing is allocated on the basis of DL hours and packing
is allocated on the basis of product weight. At the beginning of
this year, the following estimates were made
Direct Materials $734,000
Direct Labor 953,000
Mixing cost 377,000
Machining cost 721,000
Finishing cost...
cost pools as follows: Machining $20,800 Order Filling &
cost pools as follows:
Machining
$20,800
Order
Filling
$30,400
Other
$48,800
Machining costs are allocated to products using machine hours
(mh) and Order Filling costs are assigned to products using the
number of orders (o). The costs of the Other activity pool are not
assigned to products. Activity data appears below.
Machining (mh)
Order Filling (o)
Product D7
6,600
800
Product U1
13,400
200
What is the total overhead cost assigned to Product
D7 under activity-based costing?
Meester Corporation has an activity-based costing system with three activity cost pools--Machining, Order Filling, and Other....
Meester Corporation has an activity-based costing system with three activity cost pools--Machining, Order Filling, and Other. In the first stage allocations, costs in the two overhead accounts, equipment depreciation and supervisory expense, are allocated to three activity cost pools based on resource consumption. Data used in the first stage allocations follow: Overhead costs: Equipment depreciation $87,000Supervisory expense $ 9,400 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost PoolsMachiningOrder FillingOtherEquipment expense0.600.200.20Supervisory expense0.600.100.30Machining costs are assigned to products using machine-hours (MHS) and Order Filling costs...
3. Musich Corporation has an activity-based costing system with three activity cost pools--Machining, Setting Up, and...
3.
Musich Corporation has an activity-based costing system with
three activity cost pools--Machining, Setting Up, and Other. The
company's overhead costs, which consist of equipment depreciation
and indirect labor, have been allocated to the cost pools already
and are provided in the table below.
Activity
Cost Pools
Machining
Setting Up
Other
Total
Equipment depreciation
$
8800
$
47,200
$
23,200
$
79,200
Indirect labor
3600
2600
3800
10,000
Total
$
12,400
$
49,800
$
27,000
$
89,200
Costs in the...
Meester Corporation has an activity-based costing system with three activity cost pools--Machining, Order Filling, and Other....
Meester Corporation has an activity-based costing system with
three activity cost pools--Machining, Order Filling, and Other. In
the first stage allocations, costs in the two overhead accounts,
equipment depreciation and supervisory expense, are allocated to
three activity cost pools based on resource consumption. Data used
in the first stage allocations follow: Overhead costs: Equipment
expense $ 83,000 Supervisory expense $ 6,700 Distribution of
Resource Consumption Across Activity Cost Pools: Activity Cost
Pools Machining Order Filling Other Equipment expense 0.50 0.30...
Goertz Corporation has an activity-based costing system with three activity cost pools--Machining, Order Filling, and Other....
Goertz Corporation has an activity-based costing system with
three activity cost pools--Machining, Order Filling, and Other. In
the first stage allocations, costs in the two overhead accounts,
equipment depreciation and supervisory expense, are allocated to
the three activity cost pools based on resource consumption. Data
used in the first stage allocations follow:
Overhead costs:
Equipment depreciation
$
51,000
Supervisory expense
$
3,000
Distribution of Resource Consumption Across Activity Cost
Pools:
Activity Cost Pools
Machining
Order Filling
Other
Equipment depreciation
0.40...
Meester Corporation has an activity-based costing system with three activity cost pools--Machining, Order Filling, and Other....
Meester Corporation has an activity-based costing system with
three activity cost pools--Machining, Order Filling, and Other. In
the first stage allocations, costs in the two overhead accounts,
equipment depreciation and supervisory expense, are allocated to
three activity cost pools based on resource consumption. Data used
in the first stage allocations follow:
Overhead costs:
Equipment depreciation
$
96,000
Supervisory expense
$
8,000
Distribution of Resource Consumption Across Activity Cost
Pools:
Activity Cost Pools
Machining
Order Filling
Other
Equipment depreciation
0.30
0.10...
Musich Corporation has an activity-based costing system with three activity cost pools--Machining, Setting Up, and Other....
Musich Corporation has an activity-based costing system with
three activity cost pools--Machining, Setting Up, and Other. The
company's overhead costs, which consist of equipment depreciation
and indirect labor, have been allocated to the cost pools already
and are provided in the table below.
Activity
Cost Pools
Machining
Setting Up
Other
Total
Equipment depreciation
$
9400
$
48,700
$
23,800
$
81,900
Indirect labor
4500
2900
4100
11,500
Total
$
13,900
$
51,600
$
27,900
$
93,400
Costs in the Machining...
Musich Corporation has an activity-based costing system with three activity cost pools--Machining, Setting Up, and Other....
Musich Corporation has an activity-based costing system with
three activity cost pools--Machining, Setting Up, and Other. The
company's overhead costs, which consist of equipment depreciation
and indirect labor, have been allocated to the cost pools already
and are provided in the table below.
Activity Cost Pools
Machining
Setting Up
Other
Total
Equipment depreciation
$
9400
$
48,700
$
23,800
$
81,900
Indirect labor
4500
2900
4100
11,500
Total
$
13,900
$
51,600
$
27,900
$
93,400
...
Mayeux Corporation uses an activity-based costing system with three activity cost pools.
Mayeux 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: Wages and salaries $ 320,000 Depreciation 160,000 Utilities 240,000 Total $720,000 Distribution of resource consumption: Activity Cost Pools How much cost, in total, would be allocated in the first-stage allocation to the Setting Up activity cost pool?A) $360,000 B) $336,000 C) $288,000 D) $348,000
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- THIS PROGRAM HAS TO BE WRITTEN IN C Single function to perform the parity computation on...
- Consider a buffer system consisting of Benzoic acid (pKa = 4.20) and sodium benzoate, a) Would...
- Decision Variables S T Minimize 1.8S + 2.20T Subject to: Potassium 5S + 8T >= 200...
- A neurologist needs to counsel a stroke victim and her husband about possible outcomes, treatment options,...
- Case Study: Personal Beliefs in the Workplace Don Shakow was a prominent professional who worked in...
- 1: Competency framework usage is the modern best practice in management. What is meant by competency...
- A 19.34 g mixture of sugar (C12H22O11) and table salt (NaCl) is dissolved in 231 g...
ADVERTISEMENT