Exercise 7-4 (Algo) Second-Stage Allocation [LO7-4]Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains thefollowing six activity cost pools and activity rates:Activity Cost PoolSupporting direct laborMachine processingMachine setupsNumber of units produced per yearDirect labor-hoursActivity Rate$ 11 per direct labor-hour$5 per machine-hour$ 45Production ordersShipments$ 120 per shipmentProduct sustaining$ 900 per productActivity data have been supplied for the following two products:Machine-hoursMachine setupsProduction ordersShipmentsProduct sustainingper setup$ 160 per orderTotal Expected ActivityK425M672,0002001,0252,6007714350403 3 3 3Required:How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system? Number of units produced per yearDirect labor-hoursMachine-hoursMachine setupsProduction ordersShipmentsProduct sustainingActivity Cost PoolSupporting direct laborMachine processingMachine setupsProduction ordersShipmentsProduct sustainingTotal overhead costTotal Expected ActivityK425M672,000K4252001,0252,60077143M67504033ImmRequired:How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system?33

Activity cost pools are commonly employed in activity-based costing (ABC) systems as a component for…

Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system following six activity cost pools and activity rates: Activity Rate $ 11 per direct labor-hour $5 per machine-hour $45 per setup Production orders. $ 160 per order Shipments $ 120 per shipment Product sustaining $ 900 per product Activity data have been supplied for the following two products: Activity Cost Pool Supporting direct labor Machine processing Machine setups Number of units produced per year Direct labor-hours. Machine-hours Machine setups Production orders Shipments Product sustaining Total Expected Activity K425 M67 2,000 200 1,025 2,600 7 7 14 3 50 40 3 3 3 3

Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system following six activity cost pools and activity rates: Activity Rate $ 11 per direct labor-hour $5 per machine-hour $45 per setup Production orders. $ 160 per order Shipments $ 120 per shipment Product sustaining $ 900 per product Activity data have been supplied for the following two products: Activity Cost Pool Supporting direct labor Machine processing Machine setups Number of units produced per year Direct labor-hours. Machine-hours Machine setups Production orders Shipments Product sustaining Total Expected Activity K425 M67 2,000 200 1,025 2,600 7 7 14 3 50 40 3 3 3 3

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 5PB: Wrappers Tape makes two products: Simple and Removable. It estimates it will produce 369,991 units...

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Wrappers Tape makes two products: Simple and Removable. It estimates it will produce 369,991 units of Simple and 146,100 of Removable, and the overhead for each of its cost pools is as follows: It has also estimated the activities for each cost driver as follows: Â How much is the overhead allocated to each unit of Simple and Removable?
Exercise 7-4 (Algo) Second-Stage Allocation [LO7-4] Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Machine processing Machine setups Production orders. Shipments Product sustaining Activity data have been supplied for the following two products: Number of units produced per year Direct labor-hours Machine-hours Machine setups Production orders Shipments Product sustaining Activity Rate $10 per direct labor-hour $3 per machine-hour $50 per setup $ 170 per order $115 per shipment $850 per product Activity Cost Pool Supporting direct labor Machine processing Machine setups Production orders Shipments Product sustaining Total overhead cost K425 Total Expected Activity K425 M67 2,000 200 1,075 2,600 19 19 38 Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing…
EXERCISE 1 LP Corporation uses an activity-based costing system with the following three activity cost pools: Total Activity Activity Cost Pool Fabrication 80,000 machine-hours 400 orders Order processing Other Not applicable The Other activity cost pool is used to accumulate costs of idle capacity and facility-sustaining costs. The company has provided the following data concerning its costs: Wages and salaries Depreciation P460,000 180,000 200,000 P840,000 Occupancy Total The distribution of resource consumptions across activity cost pools is given below: Activity Cost Pools Order Fabrication Other Total Processing Wages and salaries 5% 80% 15% 100% Depreciation 15% 40% 45% 100% Occupancy 15% 50% 35% 100% Required: 1. Determine the activity rate for the Fabrication activity cost pool. 2. Determine the activity rate for the Order Processing activity cost pool. ersity
Exercise 7-4 (Algo) Second-Stage Allocation [LO7-4] Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Machine processing Machine setups Activity Rates $ 11 per direct labor -hour 4 per machine-hour 50 per setup $ 150 per order $ 125 per shipment $ 850 per product Production orders Shipments Product sustaining Activity data have been supplied for the following two products: Total Expected Activity K425 Number of units produced per year Direct labor-hours Machine-hours Machine setups 200 2,000 975 40 3,000 30 13 2 Production orders Shipments Product sustaining 13 2 26 2 2 Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system? Activity Cost Pool K425 M67 Supporting direct labor Machine processing Machine setups Production orders Shipments Product sustaining…
Exercise 7-4 (Algo) Second-Stage Allocation [LO7-4] Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Machine processing Machine setups Production orders Shipments $ 115 per shipment Product sustaining $ 850 per product Activity data have been supplied for the following two products: Number of units produced per year Direct labor-hours Machine-hours Machine setups Production orders Shipments Product sustaining Activity Cost Pool Supporting direct labor Machine processing Machine setups Production orders Shipments Product sustaining Total overhead cost Activity Rate $ 8 per direct labor-hour $4 per machine-hour $ 40 per setup $170 per order $ K425 Total Expected Activity K425 M67 2,000 30 20 0 $ 200 1,150 3,000 Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing…
Exercise 7-4 (Algo) Second-Stage Allocation [LO7-4] Klumper Corporation is a diversified manufacturer of industrial goods. The company’s activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Activity Rates Supporting direct labor $ 11 per direct labor-hour Machine processing $ 3 per machine-hour Machine setups $ 40 per setup Production orders $ 160 per order Shipments $ 125 per shipment Product sustaining $ 900 per product Activity data have been supplied for the following two products: Total Expected Activity K425 M67 Number of units produced per year 200 2,000 Direct labor-hours 1,150 50 Machine-hours 2,400 40 Machine setups 11 3 Production orders 11 3 Shipments 22 3 Product sustaining 3 3 Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system?
Exercise 7-4 (Algo) Second-Stage Allocation [LO7-4] Klumper Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Machine processing Machine setups Production orders. Shipments Product sustaining Number of units produced per year Direct labor-hours Machine-hours Activity Rates. $10 per direct labor-hour $3 per machine-hour $ 125 per shipment $ 775 per product Activity data have been supplied for the following two products: Machine setups Production orders Shipments Product sustaining $ 35 per setup $160 per order. Total Expected Activity K425 M67 200 925 2,600 13 13. 26 3 ,000 40 30 3 3 3 Required: How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system?
Question No.5 Ivory Corporation manufactures two products (A and B). The overhead costs have been divided into four cost pools that use the following activity drivers: Product Number of Orders Number of Set-ups Number of Labor Transactions Labor Hours A B Cost per pool 20 5 Rs.15,000 35 70 Rs.8,400 1,000 1,500 Rs.120,000 75 125 Rs.40,000 Required: Compute the allocation rates for each of the activity drivers listed. Allocate the overhead cost to Product A and B using activity-based-costing. Compute the overhead rate using machine hours under the functional based costing system. Allocate the overhead cost to Product A and B using the functional-based costing system overhead rate calculated in part C.
Exercise 7-15 (Static) Comprehenslve Activity-Based Costing Exercise [LO7-2, LO7-3, LO7-4, LO7-5] Advanced Products Corporation has supplied the following data from its activity-based costing system: Overhead Costs Wages and salaries Other overhead costs $ 300,000 100,000 $ 400,000 Total overhead costs Total Activity for the Activity Cost Pool Supporting direct labor Order processing Customer support Other Activity Measure Number of direct labor-hours Number of customer orders Number of customers This is an organization- sustaining activity Year 20, 900 DLHS 400 orders 200 customers Not applicable Distribution of Resource Consumption Across Activities Supporting Direct Labor 40% Customer Support Orden Processing Other Total Wages and salaries Other overhead costs 30% 20% 10% 100% 100% 30% 10% 20% 40% During the year, Advanced Products completed one order for a new customer, Shenzhen Enterprises. This customer did not order any other products during the year. Data concerning that order…
Exercise 7-11 (Algo) Second-Stage Allocation and Margin Calculations [LO7-4, LO7-5] Foam Products, Incorporated, makes foam seat cushions for the automotive and aerospace Industries. The company's activity-based costing system has four activity cost pools, which are listed below along with their activity measures and activity rates: Activity Cost Pool Supporting direct labor Batch processing Order processing Customer service Activity Measure Number of direct labor-hours Number of batches Number of orders Number of customers The company Just completed a single order from Interstate Trucking for 1,700 custom seat cushions. The order was produced in three batches. Each seat cushion required 0.6 direct labor-hour. The selling price was $141.80 per unit, the direct materials cost was $107 per unit, and the direct labor cost was $13.80 per unit. This was Interstate Trucking's only order during the year. Required: Calculate the customer margin for Interstate Trucking. Costs: Interstate…
Exercise 7-15 (Static) Comprehensive Activity-Based Costing Exercise [LO7-2, LO7-3, LO7-4, LO7-5] Advanced Products Corporation has supplied the following data from its activity-based costing system: Overhead CostsWages and salaries$ 300,000Other overhead costs100,000Total overhead costs$ 400,000 Activity Cost PoolActivity MeasureTotal Activity for the YearSupporting direct laborNumber of direct labor-hours20,000DLHs Order processingNumber of customer orders400orders Customer supportNumber of customers200customers OtherThis is an organization- sustaining activityNot applicable Distribution of Resource Consumption Across Activities Supporting Direct LaborOrder ProcessingCustomer SupportOtherTotal Wages and salaries40%30%20%10%100% Other overhead costs30%10%20%40%100% During the year, Advanced Products completed one order for a new customer, Shenzhen Enterprises. This customer did not order any other products during the year. Data concerning that order follow: Data Concerning the…
Exercise 7-11 (Algo) Second-Stage Allocation and Margin Calculations [LO7-4, LO7-5] Foam Products, Incorporated, makes foam seat cushions for the automotive and aerospace industries. The company's activity-based costing system has four activity cost pools, which are listed below along with their activity measures and activity rates: Activity Cost Pool Supporting direct labor Batch processing Order processing Customer service Activity Measure Number of direct labor-hours Number of batches Number of orders Number of customers Activity Rate $9 per direct labor-hour $95 per batch $ 279 per order $ 2,616 per customer The company just completed a single order from Interstate Trucking for 2.400 custom seat cushions. The order was produced in four batches. Each seat cushion required 0.6 direct labor-hours. The selling price was $142.00 per unit, the direct materials cost was $108 per unit, and the direct labor cost was $14.00 per unit. This was Interstate Trucking's only order during the year.…