Activity cost pool Machine setup Materials handling Machine depreciation Activity cost driver Number of setups Number...

Activity cost pool Machine setup Materials handling Machine depreciation Activity cost driver Number of setups Number of parts Machine hours (mh) Cost assigned to pool 260000 580000 600000 Standard product 60 setups 14000 parts 2 mh per product Custom product 40 setups 12000 parts 4mh per product the company produced 14 000 basic products and 10000 custom product. compute the activity overhead rate for each cost pool using ABC.

Expert Solution

(A) Cost statement:			No. of activity cost driver				Total no. of activity cost driver
			Standard Product		Custom Product
Activity cost pool	Activity cost driver	Cost assigned to pool
Machine setups	Number of setups	$ 2,60,000	60	Setups	40	Setups		100	Setups
Material handling	Nmber of parts	$ 5,80,000	14,000	parts	12,000	parts		26,000	parts
Machine depreciation	Machine hours(mh)	$ 6,00,000	2	mh	4	mh		6	mh


(B)
Activity overhead rate	=	Cost assigned to pool/Total no. of actiivty cost driver

Activity cost pool:
Machine setups	$ 2,60,000	/	100	Setups	=	$ 2,600.00	per	Setup
Material handling	$ 5,80,000	/	26,000	parts	=	$ 22.31	per	part
Machine depreciation	$ 6,00,000	/	6	mh	=	$1,00,000.00	per	mh


Thus, activity overhead rate for each cost pool using ABC:

Machine setups	$ 2,600.00	per	Setup
Material handling	$ 22.31	per	part
Machine depreciation	$ 1,00,000.00	per	mh

ekkarill92 answered 1 year ago

Assuming activity-cost pools are used, what are the activity-cost driver rates for design changes, setups, and...

Assuming activity-cost pools are used, what are the activity-cost driver rates for design changes, setups, and inspections cost pools? a. $200 per change, $64 per setup, $5 per inspection b. $180 per change, $76 per setup, $4 per inspection c. $150 per change, $64 per setup, $4 per inspection d. $180 per change, $76 per setup, $5 per inspection e. $200 per change, $5 per setup, $64 per inspection Short Answer The following costs are attributed to the Quilt Company:...

A local manufacturer has budgeted these overhead costs: Purchasing $88,000 Handling Materials 33,500 Machine Setups 75,200...

A local manufacturer has budgeted these overhead costs: Purchasing $88,000 Handling Materials 33,500 Machine Setups 75,200 Inspections 30,000 Utilities 42,500 They are considering adapting ABC costing and have estimated the cost drivers for each pool as shown: Cost Driver Activity Orders 800 Material Moves 1,340 Machine Setups 16,000 Number of Inspections 6,000 Square Feet 170,000 Recent success has yielded an order for 1,100 tables. Assume direct labor costs per hour of $15. Activity Order, Units 1,100 Direct Materials 112,600 Machine...

Fellar Corp. has identified the following information: Activity cost pools Materials handling $39,200 Machine maintenance 32,560...

Fellar Corp. has identified the following information: Activity cost pools Materials handling $39,200 Machine maintenance 32,560 Cost drivers Number of material moves 700 Number of machine hours 74,000 Required: 1. Calculate the activity rate for each cost pool. (Round your answers to 2 decimal places.) 2. Determine the amount of overhead assigned to Fellar’s products if they have the following activity demands: (Round your intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) Product...

Activity of Activity Allocation Base Allocation Rate Materials handling. . $310,000 Number of parts $0.60 Assembling....

Activity of Activity Allocation Base Allocation Rate Materials handling. . $310,000 Number of parts $0.60 Assembling. . . . . . . $2,200,000 Direct labor hours $13.00 Painting. . . . . . . . . . . . . $150,000 Number of painted desks $4.90 McKnightMcKnight produced two styles of desks in? March: the Standard desk and Unpainted desk. Data for each? follow: Total Total Direct Total Total Assembling Units Materials Number Direct Labor Product Produced Costs of Parts...

2) Gable Company uses three activity cost pools. Each pool has a cost driver. Information for...

2) Gable Company uses three activity cost pools. Each pool has a cost driver. Information for Gable Company follows: Activity Cost Pools Total Cost of Pool Cost Driver Estimated Cost Driver Machining $ 380,120 Number of machine hours 88,400 Designing costs 86,400 Number of design hours 9,000 Setup costs 74,672 Number of batches 525 Suppose that Gable Company manufactures three products, A, B, and C. Information about these products follows: Product A Product B Product C Number of machine hours...

Gable Company uses three activity cost pools. Each pool has a cost driver. Information for Gable...

Gable Company uses three activity cost pools. Each pool has a cost driver. Information for Gable Company follows: Activity Cost Pools Total Cost of Pool Cost Driver Estimated Cost Driver Machining $ 259,000 Number of machine hours 85,600 Designing costs 59,000 Number of design hours 7,800 Setup costs 72,000 Number of batches 370 Required: 1. Compute the activity rate for each activity. (Round your answers to 2 decimal places.) Activity Activity Rate Machining per Machine Hrs Design Costs per Design...

1) Required information Gable Company uses three activity cost pools. Each pool has a cost driver....

1) Required information Gable Company uses three activity cost pools. Each pool has a cost driver. Information for Gable Company follows: Activity Cost Pools Total Cost of Pool Cost Driver Estimated Cost Driver Machining $ 236,300 Number of machine hours 69,500 Designing costs 58,725 Number of design hours 6,750 Setup costs 71,350 Number of batches 500 Required: 1. Compute the activity rate for each activity. 2. Classify each activity as facility, product, batch, or unit level. 2) Required information Gable...

Activity rate = Estimated overhead costs/Expected activity Machine Setup: $20000/50 = $400 per setup Special Processing:...

Activity rate = Estimated overhead costs/Expected activity Machine Setup: $20000/50 = $400 per setup Special Processing: $200000/8000 = $25 per machine hour General Factory: $250000/12500 = $20 per direct labor hour 2. Product A Product B Product C Direct labor costs 40000 190000 50000 Direct materials 100000 120000 60000 Overheads: Machine setup 12000 4000 6000 Special processing 125000 70000 75000 General factory 50000 237500 40000 Total overheads 187000 311500 121000 Total costs 327000 621500 231000 3. Actual manufacturing overhead 625500...

Which item would a shipping department cost pool use as a cost driver?

Which item would a shipping department cost pool use as a cost driver? Number of sales orders Number of containers Number of units Number of machine hours

an activity-cost pool a. a measure of the activity performed serves as the cost allocation base....

an activity-cost pool a. a measure of the activity performed serves as the cost allocation base. b. the costs have a cause-and-effect relationship with the cost-allocation base for that activity. c. the cost pools are homogeneous over time. d. costs in a cost pool can always be traced directly to products. e. each pool pertains to a narrow and focused set of costs. Answer the following question(s) using the information below. Peter’s Printers has contracts to complete weekly supplements required...

Question