Activity-Based Costing
Steampunk Corporation has the following predicted indirect costs and cost drivers for 2019 for the given activity cost pools:
| Fabrication Department |
Finishing Department |
Cost Driver | |
|---|---|---|---|
| Maintenance | $ 54,000 | 27,000 | Machine hours |
| Materials handling | 81,000 | 40,500 | Material moves |
| Machine | 189,000 | 13,500 | Machine setups |
| Inspections |
- |
67,500 |
Inspection hours |
| Total |
$ 324,000 |
$ 148,500 |
The following activity predictions were also made for the year:
| Fabrication Department |
Finishing Department |
|
|---|---|---|
| Machine hours | 5,000 | 2,500 |
| Material moves | 1,500 | 750 |
| Machine setups | 350 | 25 |
| Inspection hours | - | 500 |
It is assumed that the cost per unit of activity for a given activity does not vary between departments. Steampunk's president, Abner Punk, is trying to evaluate the company's product mix strategy regarding two of its product models, SW100 and SG150. The company has been using a company wide overhead rate based on machine hours but is considering switching to either department rates of activity-based rate. The production manager has provided the following data for the production of a batch of 100 units for each of these models:
| SW100 | SG150 | |
|---|---|---|
| Direct materials cost | $ 18,000 | $ 27,000 |
| Direct labor cost | $ 7,200 | $ 5,400 |
| Machine hours (Fabrication) | 250 | 350 |
| Machine hours (Finishing) | 100 | 50 |
| Materials moves | 20 | 40 |
| Machine setups | 5 | 10 |
| Inspection hours | 15 | 30 |
a. Determine the cost of one unit each of SW100 and SG150, assuming a company-wide overhead rate is used based on total machine hours.
Round rate to two decimal places.
Overhead rate based on total machine hours: $Answer per machine hour
Use rounded overhead rate calculated about for calculations below. Round cost answers to the nearest whole number. Round cost per unit to two decimal places.
| Product Costs per Unit | SW100 | SG150 |
|---|---|---|
| Direct materials | Answer | Answer |
| Direct labor | Answer | Answer |
| Manufacturing overhead | Answer | Answer |
| Total cost per batch | Answer | Answer |
| Number of units per batch | Answer | Answer |
| Cost per unit | Answer | Answer |
b. Determine the cost of one unit of SW100 and SG150, assuming department overhead rates are used. Overhead is assigned based on machine hours in both departments.
Round to two decimal places, if applicable.
Overhead rate based on machine hours for Fabrication Dept.: $Answer per machine hour.
Overhead rate based on machine hours for Finishing Dept.: $Answer per machine hour.
Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed. Round cost per unit to two decimal places, if needed.
| Product Costs per Unit | SW100 | SG150 |
|---|---|---|
| Direct materials | Answer | Answer |
| Direct labor | Answer | Answer |
| Manufacturing overhead: | ||
| Fabrication Dept. | Answer | Answer |
| Finishing Dept. |
Answer |
Answer |
| Total cost per batch |
Answer |
Answer |
| Number of units per batch | Answer | Answer |
| Cost per unit |
Answer |
Answer |
c. Determine the cost of one unit of SW100 and SG150, assuming activity-based overhead rates are used for maintenance, materials handling, machine setup, and inspection activities.
Round rate to two decimal places, if applicable.
| Activity-based overhead rates: | |
| Maintenance | Answer |
| Materials handling | Answer |
| Machine setup | Answer |
| Inspection activities | Answer |
Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed. Round cost per unit to two decimal places, if needed.
| Product Costs per Unit | SW100 | SG150 |
|---|---|---|
| Direct materials | Answer | Answer |
| Direct labor | Answer | Answer |
| Manufacturing overhead: | ||
| Maintenance activity | Answer | Answer |
| Maintenance handling activity | Answer | Answer |
| Machine setups activity | Answer | Answer |
| Inspections activity |
Answer |
Answer |
| Total cost per batch | Answer | Answer |
| Number of units per batch | Answer | Answer |
| Cost per unit |
Answer |
Answer |
In: Accounting
Activity-Based Costing
Steampunk Corporation has the following predicted indirect costs and cost drivers for 2019 for the given activity cost pools:
| Fabrication Department |
Finishing Department |
Cost Driver | |
|---|---|---|---|
| Maintenance | $ 54,000 | 27,000 | Machine hours |
| Materials handling | 81,000 | 40,500 | Material moves |
| Machine | 189,000 | 13,500 | Machine setups |
| Inspections |
- |
67,500 |
Inspection hours |
| Total |
$ 324,000 |
$ 148,500 |
The following activity predictions were also made for the year:
| Fabrication Department |
Finishing Department |
|
|---|---|---|
| Machine hours | 5,000 | 2,500 |
| Material moves | 1,500 | 750 |
| Machine setups | 350 | 25 |
| Inspection hours | - | 500 |
It is assumed that the cost per unit of activity for a given activity does not vary between departments. Steampunk's president, Abner Punk, is trying to evaluate the company's product mix strategy regarding two of its product models, SW100 and SG150. The company has been using a company wide overhead rate based on machine hours but is considering switching to either department rates of activity-based rate. The production manager has provided the following data for the production of a batch of 100 units for each of these models:
| SW100 | SG150 | |
|---|---|---|
| Direct materials cost | $ 18,000 | $ 27,000 |
| Direct labor cost | $ 7,200 | $ 5,400 |
| Machine hours (Fabrication) | 250 | 350 |
| Machine hours (Finishing) | 100 | 50 |
| Materials moves | 20 | 40 |
| Machine setups | 5 | 10 |
| Inspection hours | 15 | 30 |
a. Determine the cost of one unit each of SW100 and SG150, assuming a company-wide overhead rate is used based on total machine hours.
Round rate to two decimal places.
Overhead rate based on total machine hours: Answer
per machine hour
Use rounded overhead rate calculated about for calculations below. Round cost answers to the nearest whole number. Round cost per unit to two decimal places.
| Product Costs per Unit | SW100 | SG150 |
|---|---|---|
| Direct materials | Answer | Answer |
| Direct labor | Answer | Answer |
| Manufacturing overhead | Answer | Answer |
| Total cost per batch | Answer | Answer |
| Number of units per batch | Answer | Answer |
| Cost per unit | Answer | Answer |
b. Determine the cost of one unit of SW100 and SG150, assuming department overhead rates are used. Overhead is assigned based on machine hours in both departments.
Round to two decimal places, if applicable.
Overhead rate based on machine hours for Fabrication Dept.: Answer
per machine hour.
Overhead rate based on machine hours for Finishing Dept.: Answer
per machine hour.
Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed. Round cost per unit to two decimal places, if needed.
| Product Costs per Unit | SW100 | SG150 |
|---|---|---|
| Direct materials | Answer | Answer |
| Direct labor | Answer | Answer |
| Manufacturing overhead: | ||
| Fabrication Dept. | Answer | Answer |
| Finishing Dept. |
Answer |
Answer |
| Total cost per batch |
Answer |
Answer |
| Number of units per batch | Answer | Answer |
| Cost per unit |
Answer |
Answer |
c. Determine the cost of one unit of SW100 and SG150, assuming activity-based overhead rates are used for maintenance, materials handling, machine setup, and inspection activities.
Round rate to two decimal places, if applicable.
| Activity-based overhead rates: | |
| Maintenance | Answer |
| Materials handling | Answer |
| Machine setup | Answer |
| Inspection activities | Answer |
Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed. Round cost per unit to two decimal places, if needed.
| Product Costs per Unit | SW100 | SG150 |
|---|---|---|
| Direct materials | Answer | Answer |
| Direct labor | Answer | Answer |
| Manufacturing overhead: | ||
| Maintenance activity | Answer | Answer |
| Maintenance handling activity | Answer | Answer |
| Machine setups activity | Answer | Answer |
| Inspections activity |
Answer |
Answer |
| Total cost per batch | Answer | Answer |
| Number of units per batch | Answer | Answer |
| Cost per unit |
Answer |
Answer |
In: Accounting
Steampunk Corporation has the following predicted indirect costs and cost drivers for 2019 for the given activity cost pools:
| Fabrication Department |
Finishing Department |
Cost Driver | |
|---|---|---|---|
| Maintenance | $96 ,000 | 48,000 | Machine hours |
| Materials handling | 144,000 | 72,000 | Material moves |
| Machine | 336,000 | 24,000 | Machine setups |
| Inspections |
- |
120,000 |
Inspection hours |
| Total |
$ 576,000 |
$264 ,000 |
The following activity predictions were also made for the year:
| Fabrication Department |
Finishing Department |
|
|---|---|---|
| Machine hours | 5,000 | 2,500 |
| Material moves | 1,500 | 750 |
| Machine setups | 350 | 25 |
| Inspection hours | - | 500 |
It is assumed that the cost per unit of activity for a given activity does not vary between departments. Steampunk's president, Abner Punk, is trying to evaluate the company's product mix strategy regarding two of its product models, SW100 and SG150. The company has been using a company wide overhead rate based on machine hours but is considering switching to either department rates of activity-based rates. The production manager has provided the following data for the production of a batch of 100 units for each of these models:
| SW100 | SG150 | |
|---|---|---|
| Direct materials cost | $ 32,000 | $ 48,000 |
| Direct labor cost | $ 12,800 | $9,600 |
| Machine hours (Fabrication) | 250 | 350 |
| Machine hours (Finishing) | 100 | 50 |
| Materials moves | 20 | 40 |
| Machine setups | 5 | 10 |
| Inspection hours | 15 | 30 |
a. Determine the cost of one unit each of SW100 and SG150, assuming a company-wide overhead rate is used based on total machine hours.
Round rate to two decimal places.
Overhead rate based on total machine hours: $Answer
per machine hour
Use rounded overhead rate calculated about for calculations below. Round cost answers to the nearest whole number. Round cost per unit to two decimal places.
| Product Costs per Unit | SW100 | SG150 |
|---|---|---|
| Direct materials | Answer | Answer |
| Direct labor | Answer | Answer |
| Manufacturing overhead | Answer | Answer |
| Total cost per batch | Answer | Answer |
| Number of units per batch | Answer | Answer |
| Cost per unit | Answer | Answer |
b. Determine the cost of one unit of SW100 and SG150, assuming department overhead rates are used. Overhead is assigned based on machine hours in both departments.
Round to two decimal places, if applicable.
Overhead rate based on machine hours for Fabrication Dept.: $Answer
per machine hour.
Overhead rate based on machine hours for Finishing Dept.: $Answer
per machine hour.
Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed. Round cost per unit to two decimal places, if needed.
| Product Costs per Unit | SW100 | SG150 |
|---|---|---|
| Direct materials | Answer | Answer |
| Direct labor | Answer | Answer |
| Manufacturing overhead: | ||
| Fabrication Dept. | Answer | Answer |
| Finishing Dept. |
Answer |
Answer |
| Total cost per batch |
Answer |
Answer |
| Number of units per batch | Answer | Answer |
| Cost per unit |
Answer |
Answer |
c. Determine the cost of one unit of SW100 and SG150, assuming activity-based overhead rates are used for maintenance, materials handling, machine setup, and inspection activities.
Round rate to two decimal places, if applicable.
| Activity-based overhead rates: | |
| Maintenance | Answer |
| Materials handling | Answer |
| Machine setup | Answer |
| Inspection activities | Answer |
Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed. Round cost per unit to two decimal places, if needed.
| Product Costs per Unit | SW100 | SG150 |
|---|---|---|
| Direct materials | Answer | Answer |
| Direct labor | Answer | Answer |
| Manufacturing overhead: | ||
| Maintenance activity | Answer | Answer |
| Materials handling activity | Answer | Answer |
| Machine setups activity | Answer | Answer |
| Inspections activity |
Answer |
Answer |
| Total cost per batch | Answer | Answer |
| Number of units per batch | Answer | Answer |
| Cost per unit |
Answer |
Answer |
In: Accounting
Activity-Based Costing
Steampunk Corporation has the following predicted indirect costs and cost drivers for 2019 for the given activity cost pools:
| Fabrication Department |
Finishing Department |
Cost Driver | |
|---|---|---|---|
| Maintenance | $ 54,000 | 27,000 | Machine hours |
| Materials handling | 81,000 | 40,500 | Material moves |
| Machine | 189,000 | 13,500 | Machine setups |
| Inspections |
- |
67,500 |
Inspection hours |
| Total |
$ 324,000 |
$ 148,500 |
The following activity predictions were also made for the year:
| Fabrication Department |
Finishing Department |
|
|---|---|---|
| Machine hours | 5,000 | 2,500 |
| Material moves | 1,500 | 750 |
| Machine setups | 350 | 25 |
| Inspection hours | - | 500 |
It is assumed that the cost per unit of activity for a given activity does not vary between departments. Steampunk's president, Abner Punk, is trying to evaluate the company's product mix strategy regarding two of its product models, SW100 and SG150. The company has been using a company wide overhead rate based on machine hours but is considering switching to either department rates of activity-based rates. The production manager has provided the following data for the production of a batch of 100 units for each of these models:
| SW100 | SG150 | |
|---|---|---|
| Direct materials cost | $ 18,000 | $ 27,000 |
| Direct labor cost | $ 7,200 | $ 5,400 |
| Machine hours (Fabrication) | 250 | 350 |
| Machine hours (Finishing) | 100 | 50 |
| Materials moves | 20 | 40 |
| Machine setups | 5 | 10 |
| Inspection hours | 15 | 30 |
a. Determine the cost of one unit each of SW100 and SG150, assuming a company-wide overhead rate is used based on total machine hours.
Round rate to two decimal places.
Overhead rate based on total machine hours: $Answer per machine hour
Use rounded overhead rate calculated about for calculations below. Round cost answers to the nearest whole number. Round cost per unit to two decimal places.
| Product Costs per Unit | SW100 | SG150 |
|---|---|---|
| Direct materials | Answer | Answer |
| Direct labor | Answer | Answer |
| Manufacturing overhead | Answer | Answer |
| Total cost per batch | Answer | Answer |
| Number of units per batch | Answer | Answer |
| Cost per unit | Answer | Answer |
b. Determine the cost of one unit of SW100 and SG150, assuming department overhead rates are used. Overhead is assigned based on machine hours in both departments.
Round to two decimal places, if applicable.
Overhead rate based on machine hours for Fabrication Dept.: $Answer per machine hour.
Overhead rate based on machine hours for Finishing Dept.: $Answer per machine hour.
Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed. Round cost per unit to two decimal places, if needed.
| Product Costs per Unit | SW100 | SG150 |
|---|---|---|
| Direct materials | Answer | Answer |
| Direct labor | Answer | Answer |
| Manufacturing overhead: | ||
| Fabrication Dept. | Answer | Answer |
| Finishing Dept. |
Answer |
Answer |
| Total cost per batch |
Answer |
Answer |
| Number of units per batch | Answer | Answer |
| Cost per unit |
Answer |
Answer |
c. Determine the cost of one unit of SW100 and SG150, assuming activity-based overhead rates are used for maintenance, materials handling, machine setup, and inspection activities.
Round rate to two decimal places, if applicable.
| Activity-based overhead rates: | |
| Maintenance | Answer |
| Materials handling | Answer |
| Machine setup | Answer |
| Inspection activities | Answer |
Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed. Round cost per unit to two decimal places, if needed.
| Product Costs per Unit | SW100 | SG150 |
|---|---|---|
| Direct materials | Answer | Answer |
| Direct labor | Answer | Answer |
| Manufacturing overhead: | ||
| Maintenance activity | Answer | Answer |
| Materials handling activity | Answer | Answer |
| Machine setups activity | Answer | Answer |
| Inspections activity |
Answer |
Answer |
| Total cost per batch | Answer | Answer |
| Number of units per batch | Answer | Answer |
| Cost per unit |
Answer |
Answer |
In: Accounting
Activity-Based Costing
Steampunk Corporation has the following predicted indirect costs and cost drivers for 2019 for the given activity cost pools:
| Fabrication Department |
Finishing Department |
Cost Driver | |
|---|---|---|---|
| Maintenance | $ 60,000 | 30,000 | Machine hours |
| Materials handling | 90,000 | 45,000 | Material moves |
| Machine | 210,000 | 15,000 | Machine setups |
| Inspections |
- |
75,000 |
Inspection hours |
| Total |
$ 360,000 |
$165,000 |
The following activity predictions were also made for the year:
| Fabrication Department |
Finishing Department |
|
|---|---|---|
| Machine hours | 5,000 | 2,500 |
| Material moves | 1,500 | 750 |
| Machine setups | 350 | 25 |
| Inspection hours | - | 500 |
It is assumed that the cost per unit of activity for a given activity does not vary between departments. Steampunk's president, Abner Punk, is trying to evaluate the company's product mix strategy regarding two of its product models, SW100 and SG150. The company has been using a company wide overhead rate based on machine hours but is considering switching to either department rates of activity-based rates. The production manager has provided the following data for the production of a batch of 100 units for each of these models:
| SW100 | SG150 | |
|---|---|---|
| Direct materials cost | $ 20,000 | $ 30,000 |
| Direct labor cost | $ 8,000 | $ 6,000 |
| Machine hours (Fabrication) | 250 | 350 |
| Machine hours (Finishing) | 100 | 50 |
| Materials moves | 20 | 40 |
| Machine setups | 5 | 10 |
| Inspection hours | 15 | 30 |
a. Determine the cost of one unit each of SW100 and SG150, assuming a company-wide overhead rate is used based on total machine hours.
Round rate to two decimal places.
Overhead rate based on total machine hours: $Answer
per machine hour
Use rounded overhead rate calculated about for calculations below. Round cost answers to the nearest whole number. Round cost per unit to two decimal places.
| Product Costs per Unit | SW100 | SG150 |
|---|---|---|
| Direct materials | Answer
|
Answer
|
| Direct labor | Answer
|
Answer
|
| Manufacturing overhead | Answer
|
Answer
|
| Total cost per batch | Answer
|
Answer
|
| Number of units per batch | Answer
|
Answer
|
| Cost per unit | Answer
|
Answer
|
b. Determine the cost of one unit of SW100 and SG150, assuming department overhead rates are used. Overhead is assigned based on machine hours in both departments.
Round to two decimal places, if applicable.
Overhead rate based on machine hours for Fabrication Dept.: $Answer
per machine hour.
Overhead rate based on machine hours for Finishing Dept.: $Answer
per machine hour.
Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed. Round cost per unit to two decimal places, if needed.
| Product Costs per Unit | SW100 | SG150 |
|---|---|---|
| Direct materials | Answer
|
Answer
|
| Direct labor | Answer
|
Answer
|
| Manufacturing overhead: | ||
| Fabrication Dept. | Answer
|
Answer
|
| Finishing Dept. |
Answer |
Answer |
| Total cost per batch |
Answer |
Answer |
| Number of units per batch | Answer
|
Answer
|
| Cost per unit |
Answer |
Answer |
c. Determine the cost of one unit of SW100 and SG150, assuming activity-based overhead rates are used for maintenance, materials handling, machine setup, and inspection activities.
Round rate to two decimal places, if applicable.
| Activity-based overhead rates: | |
| Maintenance | Answer
|
| Materials handling | Answer
|
| Machine setup | Answer
|
| Inspection activities | Answer
|
Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed. Round cost per unit to two decimal places, if needed.
| Product Costs per Unit | SW100 | SG150 |
|---|---|---|
| Direct materials | Answer
|
Answer
|
| Direct labor | Answer
|
Answer
|
| Manufacturing overhead: | ||
| Maintenance activity | Answer
|
Answer
|
| Materials handling activity | Answer
|
Answer
|
| Machine setups activity | Answer
|
Answer
|
| Inspections activity |
Answer |
Answer |
| Total cost per batch | Answer
|
Answer
|
| Number of units per batch | Answer
|
Answer
|
| Cost per unit |
Answer |
Answer |
In: Accounting
Steampunk Corporation has the following predicted indirect costs and cost drivers for 2019 for the given activity cost pools:
| Fabrication Department |
Finishing Department |
Cost Driver | |
|---|---|---|---|
| Maintenance | $ 36,000 | 18,000 | Machine hours |
| Materials handling | 54,000 | 27,000 | Material moves |
| Machine | 126,000 | 9,000 | Machine setups |
| Inspections |
- |
45,000 |
Inspection hours |
| Total |
$ 216,000 |
$ 99,000 |
The following activity predictions were also made for the year:
| Fabrication Department |
Finishing Department |
|
|---|---|---|
| Machine hours | 5,000 | 2,500 |
| Material moves | 1,500 | 750 |
| Machine setups | 350 | 25 |
| Inspection hours | - | 500 |
It is assumed that the cost per unit of activity for a given activity does not vary between departments. Steampunk's president, Abner Punk, is trying to evaluate the company's product mix strategy regarding two of its product models, SW100 and SG150. The company has been using a company wide overhead rate based on machine hours but is considering switching to either department rates of activity-based rates. The production manager has provided the following data for the production of a batch of 100 units for each of these models:
| SW100 | SG150 | |
|---|---|---|
| Direct materials cost | $ 12,000 | $ 18,000 |
| Direct labor cost | $ 4,800 | $ 3,600 |
| Machine hours (Fabrication) | 250 | 350 |
| Machine hours (Finishing) | 100 | 50 |
| Materials moves | 20 | 40 |
| Machine setups | 5 | 10 |
| Inspection hours | 15 | 30 |
a. Determine the cost of one unit each of SW100 and SG150, assuming a company-wide overhead rate is used based on total machine hours.
Round rate to two decimal places.
Overhead rate based on total machine hours: $Answer per machine hour
Use rounded overhead rate calculated about for calculations below. Round cost answers to the nearest whole number. Round cost per unit to two decimal places.
| Product Costs per Unit | SW100 | SG150 |
|---|---|---|
| Direct materials | Answer | Answer |
| Direct labor | Answer | Answer |
| Manufacturing overhead | Answer | Answer |
| Total cost per batch | Answer | Answer |
| Number of units per batch | Answer | Answer |
| Cost per unit | Answer | Answer |
b. Determine the cost of one unit of SW100 and SG150, assuming department overhead rates are used. Overhead is assigned based on machine hours in both departments.
Round to two decimal places, if applicable.
Overhead rate based on machine hours for Fabrication Dept.: $Answer per machine hour.
Overhead rate based on machine hours for Finishing Dept.: $Answer per machine hour.
Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed. Round cost per unit to two decimal places, if needed.
| Product Costs per Unit | SW100 | SG150 |
|---|---|---|
| Direct materials | Answer | Answer |
| Direct labor | Answer | Answer |
| Manufacturing overhead: | ||
| Fabrication Dept. | Answer | Answer |
| Finishing Dept. |
Answer |
Answer |
| Total cost per batch |
Answer |
Answer |
| Number of units per batch | Answer | Answer |
| Cost per unit |
Answer |
Answer |
c. Determine the cost of one unit of SW100 and SG150, assuming activity-based overhead rates are used for maintenance, materials handling, machine setup, and inspection activities.
Round rate to two decimal places, if applicable.
| Activity-based overhead rates: | |
| Maintenance | Answer |
| Materials handling | Answer |
| Machine setup | Answer |
| Inspection activities | Answer |
Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed. Round cost per unit to two decimal places, if needed.
| Product Costs per Unit | SW100 | SG150 |
|---|---|---|
| Direct materials | Answer | Answer |
| Direct labor | Answer | Answer |
| Manufacturing overhead: | ||
| Maintenance activity | Answer | Answer |
| Materials handling activity | Answer | Answer |
| Machine setups activity | Answer | Answer |
| Inspections activity |
Answer |
Answer |
| Total cost per batch | Answer | Answer |
| Number of units per batch | Answer | Answer |
| Cost per unit |
Answer |
Answer |
In: Accounting
Activity-Based Costing
Steampunk Corporation has the following predicted indirect costs and cost drivers for 2019 for the given activity cost pools:
| Fabrication Department |
Finishing Department |
Cost Driver | |
|---|---|---|---|
| Maintenance | $ 60,000 | 30,000 | Machine hours |
| Materials handling | 90,000 | 45,000 | Material moves |
| Machine | 210,000 | 15,000 | Machine setups |
| Inspections |
- |
75,000 |
Inspection hours |
| Total |
$ 360,000 |
$165,000 |
The following activity predictions were also made for the year:
| Fabrication Department |
Finishing Department |
|
|---|---|---|
| Machine hours | 5,000 | 2,500 |
| Material moves | 1,500 | 750 |
| Machine setups | 350 | 25 |
| Inspection hours | - | 500 |
It is assumed that the cost per unit of activity for a given activity does not vary between departments. Steampunk's president, Abner Punk, is trying to evaluate the company's product mix strategy regarding two of its product models, SW100 and SG150. The company has been using a company wide overhead rate based on machine hours but is considering switching to either department rates of activity-based rates. The production manager has provided the following data for the production of a batch of 100 units for each of these models:
| SW100 | SG150 | |
|---|---|---|
| Direct materials cost | $ 20,000 | $ 30,000 |
| Direct labor cost | $ 8,000 | $ 6,000 |
| Machine hours (Fabrication) | 250 | 350 |
| Machine hours (Finishing) | 100 | 50 |
| Materials moves | 20 | 40 |
| Machine setups | 5 | 10 |
| Inspection hours | 15 | 30 |
a. Determine the cost of one unit each of SW100 and SG150, assuming a company-wide overhead rate is used based on total machine hours.
Round rate to two decimal places.
Overhead rate based on total machine hours: $Answer per machine hour
Use rounded overhead rate calculated about for calculations below. Round cost answers to the nearest whole number. Round cost per unit to two decimal places.
| Product Costs per Unit | SW100 | SG150 |
|---|---|---|
| Direct materials | Answer | Answer |
| Direct labor | Answer | Answer |
| Manufacturing overhead | Answer | Answer |
| Total cost per batch | Answer | Answer |
| Number of units per batch | Answer | Answer |
| Cost per unit | Answer | Answer |
b. Determine the cost of one unit of SW100 and SG150, assuming department overhead rates are used. Overhead is assigned based on machine hours in both departments.
Round to two decimal places, if applicable.
Overhead rate based on machine hours for Fabrication Dept.: $Answer per machine hour.
Overhead rate based on machine hours for Finishing Dept.: $Answer per machine hour.
Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed. Round cost per unit to two decimal places, if needed.
| Product Costs per Unit | SW100 | SG150 |
|---|---|---|
| Direct materials | Answer | Answer |
| Direct labor | Answer | Answer |
| Manufacturing overhead: | ||
| Fabrication Dept. | Answer | Answer |
| Finishing Dept. |
Answer |
Answer |
| Total cost per batch |
Answer |
Answer |
| Number of units per batch | Answer | Answer |
| Cost per unit |
Answer |
Answer |
c. Determine the cost of one unit of SW100 and SG150, assuming activity-based overhead rates are used for maintenance, materials handling, machine setup, and inspection activities.
Round rate to two decimal places, if applicable.
| Activity-based overhead rates: | |
| Maintenance | Answer |
| Materials handling | Answer |
| Machine setup | Answer |
| Inspection activities | Answer |
Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed. Round cost per unit to two decimal places, if needed.
| Product Costs per Unit | SW100 | SG150 |
|---|---|---|
| Direct materials | Answer | Answer |
| Direct labor | Answer | Answer |
| Manufacturing overhead: | ||
| Maintenance activity | Answer | Answer |
| Materials handling activity | Answer | Answer |
| Machine setups activity | Answer | Answer |
| Inspections activity |
Answer |
Answer |
| Total cost per batch | Answer | Answer |
| Number of units per batch | Answer | Answer |
| Cost per unit |
Answer |
Answer |
In: Accounting
Marvin’s Kitchen Supply delivers restaurant supplies throughout the city. The firm adds 10 percent to the cost of the supplies to cover the delivery cost. The delivery fee is meant to cover the cost of delivery. A consultant has analyzed the delivery service using activity-based costing methods and identified four activities. Data on these activities follow. Cost Driver Volume Activity Cost Driver Cost Driver Volume Processing order Number of orders $ 84,000 6,000 orders Loading truck Number of items 370,000 185,000 items Delivering merchandise Number of orders 102,000 6,000 orders Processing invoice Number of invoices 85,000 5,000 invoices Total overhead $ 641,000 Two of Marvin's customers are City Diner and Le Chien Chaud. Data for orders and deliveries to these two customers follow. City Diner Le Chien Chaud Order
value $ 86,000 $ 96,000 Number of orders 66 280 Number of items 900 1,600 Number of invoices 14 180
Required: a. What would the delivery charge for each customer be under the current policy of 10 percent of order value?
b. Calculate the cost of each activity for both restaurants to determine the total activity-based costing estimate of the cost of delivering to each customer.
In: Accounting
Jose Zorilla uses a perpetual inventory system. During April, he
sold 700 units, (270 units on April 20 and 430 units on April 28).
The following other information is available:
| Units | Unit Cost | Total Cost | ||||||
| April 1 inventory | 250 | $12.20 | $3,050.00 | |||||
| April 15 purchase | 400 | 17.20 | 6,880.00 | |||||
| April 23 purchase | 350 | 15.60 | 5,460.00 | |||||
| 1,000 | $15,390.00 | |||||||
1.Calculate the April 30 inventory and the April cost of goods sold using the weighted average cost formula. (Round the weighted average cost per unit to 3 decimal places, e.g. 5.275 and final answers to 2 decimal places, e.g. 5,275.25.)
2.Calculate the April 30 inventory and the April cost of goods sold using the FIFO cost formula. (Round answers to 0 decimal places, e.g. 5,275.)
3.Prepare the journal entry to record the April 15 purchase
assuming the company uses FIFO method of inventory. All purchases
are on credit.
4.Prepare the journal entries to record the sale of units on April
28, assuming the company uses the weighted average cost method. All
sales are credit sales, and total $10,208. (Round final answers to
2 decimal places, e.g. 5,275.25
In: Accounting
you will assume your MSRP is always $50.00.
Assumptions:
- Online Retail store
Retail Price:37.50
Your MSRP:50.00
Distributor Cut:20.00 (40%)
Production Cost:27.00
Promotion Cost:0.00
- Department Store
Retail Price:45.00
Your MSRP:50.00
Distributor Cut:22.50 (45%)
Production Cost:27.00
Promotion Cost:0.00
Profit Margin:0.50
- University Store
Retail Price:50.00
Your MSRP:50.00
Distributor Cut:15.00 (31%)
Production Cost:27.00
Promotion Cost:0.00
Profit Margin:8.00
Now assume we sell through all three channels and our total promotion expenses are $6,400. If we assume we consistently sell 50% of our total units sold through the University Store channel, and 25% through the Department Store channel, and 25% through the Online Discount Retailer, what is our Break-even volume, in units?
1,313
4,134
4,467
None of the above
In: Statistics and Probability