Question
In: Accounting
Smokey and the Bandit produces outdoor activity clothing. The product line consists of pants, jackets, tops,...
Smokey and the Bandit produces outdoor activity clothing. The product line consists of pants, jackets, tops, and accessories. Data has been collected related to direct materials and direct labor for the four product lines. Smokey and the Bandit has also collected information on four possible cost drivers (units, batches, machine hours, labor hours). All this information is listed below. Construct a spreadsheet that will allocate overhead for each of these alternative drivers and will calculate the total per unit cost for each product line. Use the VLOOKUP function (show them) when constructing the spreadsheet so that you can determine the effect of different cost drivers on the overhead allocated and the resulting cost per unit.
|
Product Line |
Units |
Average Sales Price per unit |
Total Material Cost |
Total Labor Cost |
|
|
Pants |
4,600 |
$73 |
$234,600 |
$20,115 |
|
|
Jackets |
2,500 |
$98 |
$145,000 |
$25,200 |
|
|
Tops |
9,800 |
$36 |
$156,800 |
$32,970 |
|
|
Accessories |
18,500 |
$12 |
$ 37,000 |
$15,210 |
|
Product Line |
Batches |
Machine Hours |
Labor Hours |
|||
|
Pants |
42 |
1,640 |
1,341 |
|||
|
Jackets |
26 |
1,730 |
1,400 |
|||
|
Tops |
78 |
2,600 |
2,198 |
|||
|
Accessories |
95 |
2,250 |
845 |
Total overhead cost to be allocated: $321,560
After constructing your spreadsheet answer the following questions?
- What is the total cost per unit of each product line when machine hours are used as the cost driver for overhead allocation?
- How much overhead is allocated to Jackets when direct labor hours are used as the cost driver for overhead allocation?
- What is the total cost of Tops when direct labor hours are used as the cost driver for overhead allocation?
- What is the total cost per unit of Accessories when the number of batches is used as the cost driver for overhead allocation?
- What is the allocation rate when units are used as the cost driver?
- If you are the manager of the Jackets product line which cost driver would you prefer? Why?
- Currently the OH cost are being allocated based on DL hours. If the company decides to use units as the cost driver how would you react if you are the Accessories product line manager?
Solutions
ekkarill92 answered 11 months agoRelated Solutions
Smokey and the Bandit produces outdoor activity clothing. The product line consists of pants, jackets, tops,...
Smokey and the Bandit produces outdoor activity clothing. The
product line consists of pants, jackets, tops, and accessories.
Data has been collected related to direct materials and direct
labor for the four product lines. Smokey and the Bandit has also
collected information on four possible cost
drivers (units, batches, machine hours, labor hours). All this
information is listed below. Construct a spreadsheet that will
allocate overhead for each of these alternative drivers and will
calculate the total per unit cost...
Task Smokey and the Bandit produces “sports towels.” These are towels that has the promotion of...
Task
Smokey and the Bandit produces “sports towels.” These are towels
that has the promotion of an event or a logo printed on it. These
towels come in five sizes: regular, mid-size, hand, large, special.
Data has been collected related to direct materials and direct
labor for the five types of towels. Smokey and the Bandit has also
collected information on four possible cost
drivers (units, orders, machine hours, labor hours). All this
information is listed below.
Towel
Units
Sales...
A clothing store sells shoes, pants, and tops. The store also allows a customer to buy...
A clothing store sells shoes, pants, and tops. The store also
allows a customer to buy an “outfit,” which consists of three
items: one pair of shoes, one pair of pants, and one top. Each
clothing item has a description and a price. The four type of
clothing items are represented by the four classes Shoes, Pants,
Top, and Outfit. All four classes implement the following
ClothingItem interface.
public interface ClothingItem
{
/** Return the description of the clothing...
4) A clothing store sells shoes, pants, and tops. The store also allows a customer to...
4) A clothing store sells shoes, pants, and tops. The store also
allows a customer to buy an “outfit,” which consists of three
items: one pair of shoes, one pair of pants, and one top. Each
clothing item has a description and a price. The four type of
clothing items are represented by the four classes Shoes, Pants,
Top, and Outfit. All four classes implement the following
ClothingItem interface.
public interface ClothingItem
{
/** Return the description of the...
Q/A manufacturer of outdoor clothing makes wax jackets and trousers. Each jacket requires 1 hour to...
Q/A
manufacturer of outdoor clothing makes wax jackets and trousers.
Each jacket requires 1 hour to make, whereas each pair of trousers
takes 40 minutes. The materials for a jacket cost $32 and those for
a pair of trousers cost $40. The company can devote only 34 hours
per week to the production of jackets and trousers, and the firm’s
total weekly cost for materials must not exceed $1200. The company
sells the jackets at a profit of $12 each...
Q- A manufacturer of outdoor clothing makes wax jackets and trousers. Each jacket requires 1 hour...
Q- A manufacturer of outdoor clothing makes wax
jackets and trousers. Each jacket requires 1 hour to make, whereas
each pair of trousers takes 40 minutes. The materials for a jacket
cost $32 and those for a pair of trousers cost $40. The company can
devote only 34 hours per week to the production of jackets and
trousers, and the firm’s total weekly cost for materials must not
exceed $1200. The company sells the jackets at a profit of $12...
Teddy Bower is an outdoor clothing and accessories chain that purchases a line of parkas at...
Teddy Bower is an outdoor clothing and accessories chain that
purchases a line of parkas at $10 each from its Asian supplier,
TeddySports. Unfortunately, at the time of order placement, demand
is still uncertain. Teddy Bower forecasts that its demand is
normally distributed with mean of 2,100 and standard deviation of
1,200. Teddy Bower sells these parkas at $22 each. Unsold parkas
have little salvage value; Teddy Bower simply gives them away to a
charity and receives a tax credit...
To ensure a full line of outdoor clothing and accessories, the marketing department at Teddy Bower...
To ensure a full line of outdoor clothing and accessories, the
marketing department at Teddy Bower insists that they also sell
waterproof hunting boots. Unfortunately, neither Teddy Bower nor
TeddySports has expertise in manufacturing those kinds of boots.
Therefore, Teddy Bower contacted several Taiwanese suppliers to
request quotes. Due to competition, Teddy Bower knows that it
cannot sell these boots for more than $54. However, $40 per boot
was the best quote from the suppliers. In addition, Teddy Bower
anticipates...
To ensure a full line of outdoor clothing and accessories, the marketing department at Teddy Bower...
To ensure a full line of outdoor clothing and accessories, the
marketing department at Teddy Bower insists that they also sell
waterproof hunting boots. Unfortunately, neither Teddy Bower nor
TeddySports has expertise in manufacturing those kinds of boots.
Therefore, Teddy Bower contacted several Taiwanese suppliers to
request quotes. Due to competition, Teddy Bower knows that it
cannot sell these boots for more than $54. However, $40 per boot
was the best quote from the suppliers. In addition, Teddy Bower
anticipates...
1. Valentine Clothing operates two product lines: Pants and Shirts. The following information is available for...
1. Valentine Clothing operates two product lines: Pants and
Shirts. The following information is available for your analysis of
the Pants line: Total Variable expenses = $30,000, contribution
margin ratio = 40%, traceable and controllable fixed expenses =
$6,000 and segment margin = $5,000. Compute traceable NOT
controllable fixed expenses.
2. Remember, Return on Investment (ROI) and Return on Assets
(ROA) are equivalent. If ROA = 25%, turnover = 1.25 and income =
$6,000, compute Total Sales.
3. Valentine has...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Describe the process of STP from implementation to convergence.
- Convert the following numbers as indicated. Use as few digits in the results as necessary or...
- Java program to implement the merge sort your own and test it to sort a list...
- CODE IN C++ PLEASE Write a program to implement the algorithm that you designed in Exercise...
- Show your work please What is the discount yield, bond equivalent yield, and effective annual return...
- Case 7 of the textbook examines the rise of Wal-Mart as a corporate bohemoth. One of...
- The type of listening that involves trying to understand a situation from the speaker’s perspective is...
ADVERTISEMENT