Simplifying the ABC System: Equally Accurate Reduced ABC SystemsSelected activities and other information are provided for Patterson Company for its most recent year of operations.Expected ConsumptionActivity7. Inserting dies8. Purchasing materials1. Developing test programs3. Testing productsABC assignmentsTotal overhead costRequired:DriverNumber of diesNumber of purchaseordersEngineering hoursTest hoursWafer AWafer BQuantity1,900,000Xوالے1,9009,00019,0003. What if the two activities were 1 and 3? Repeat Requirements 1 and 2.Wafer A0.70.2Ratios0.250.6$165,0001. Form reduced system cost pools for activities 7 and 8. Do not round interim calculations. Round your final answers to the nearest dollar.Inserting dies cost poolPurchasing cost poolWafer B0.32. As the costs of the reduced system cost pools to Wafer A and Wafer B. Do not round interim calculations. Round your final answers to the nearest dollar.0.80.750.4$165,000$330,000

Activity-based costing (ABC) is a costing method that assigns overheads to different activities and…

1. Form reduced system cost pools for activities 7 and 8. Do not round interim calculations. Round your final answers to the nearest dollar. Inserting dies cost pool Purchasing cost pool 2. Assign the costs of the reduced system cost pools to Wafer A and Wafer B. Do not round interim calculations. Round your final answers to the nearest dollar. Wafer A Wafer B X 3. What if the two activities were 1 and 3? Repeat Requirements 1 and 2.

1. Form reduced system cost pools for activities 7 and 8. Do not round interim calculations. Round your final answers to the nearest dollar. Inserting dies cost pool Purchasing cost pool 2. Assign the costs of the reduced system cost pools to Wafer A and Wafer B. Do not round interim calculations. Round your final answers to the nearest dollar. Wafer A Wafer B X 3. What if the two activities were 1 and 3? Repeat Requirements 1 and 2.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 10CE: Selected activities and other information are provided for Patterson Company for its most recent...

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Simplifying the ABC System: Equally Accurate Reduced ABC Systems Selected activities and other information are provided for Patterson Company for its most recent year of operations. Expected ConsumptionRatios Activity         Driver         Quantity         Wafer A         Wafer B 7.   Inserting dies         Number of dies         2,200,000         0.7         0.3 8.  Purchasing materials         Number of purchase   orders         1,900         0.2         0.8 1.  Developing test programs         Engineering hours         11,500         0.25         0.75 3.  Testing products         Test hours         20,000         0.6         0.4      ABC assignments                                 $155,000         $155,000      Total overhead cost                                                         $310,000 Required: 1. Form reduced system cost pools for activities 7 and 8. Do not round interim calculations. Round your final answers to the nearest dollar. Inserting…
Simplifying the ABC System: Equally Accurate Reduced ABC Systems Selected activities and other information are provided for Patterson Company for its most recent year of operations. Activity Driver         Quantity         Wafer A         Wafer B 7.   Inserting dies         Number of dies         2,200,000         0.7         0.3 8.  Purchasing materials         Number of purchase   orders         1,900         0.2         0.8 1.  Developing test programs         Engineering hours         11,500         0.25         0.75 3.  Testing products         Test hours         20,000         0.6         0.4      ABC assignments                                 $155,000         $155,000      Total overhead cost                                                         $310,000 Required: 1. Form reduced system cost pools for activities 7 and 8. Do not round interim calculations. Round your final answers to the nearest dollar. Inserting dies cost pool $ 186,000…
Cost Accounting Need Help with question 1. Simplifying the ABC System: Equally Accurate Reduced ABC Systems Selected activities and other information are provided for Patterson Company for its most recent year of operations. Expected Consumption Ratios Activity         Driver         Quantity         Wafer A         Wafer B 7. Inserting dies         Number of dies         2,000,000         0.70         0.30 8. Purchasing materials         Number of purchase    orders         2,500         0.20         0.80 1. Developing test programs         Engineering hours         10,000         0.25         0.75 3. Testing products         Test hours         20,000         0.60         0.40 ABC assignments                                 $1,500,000         $1,500,000 Total overhead cost…
ngageNOWv2 | Online teachin X + om/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSession Locator=&inprogress... € Compute conversion costs given the following data: direct materials, $363,600; direct labor, $192,400; factory overhead, $204,500 and selling expenses, $35,600. Oa. $396,900 Ob. $568.100 Oc. $168,900 Od. $760,500 8 5/2
Smoky Mountain Corporation makes two types of hiking boots-the Xtreme and the Pathfinder. Data concerning these two product lines appear below: Xtreme $ 121.00 $ 64.70 $ 10.80 Pathfinder Selling price per unit Direct materials per unit Direct labor per unit Direct labor-hours per unit Estimated annual production and sales $ 88.00 $ 54.00 %24 9.00 1.0 DLHS 71,000 units 1.2 DLHS 25, 000 units The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below: Estimated total manufacturing overhead Estimated total direct labor-hours $ 2,020,000 101,000 DLH5 Required: 1. Compute the product margins for the Xtreme and the Pathfinder products under the company's traditional costing system. 2. The company is considering replacing its traditional costing system with an activity-based costing system that would assign its manufacturing…
Cost of quality report A. Using the information in Exercise 15, identify the cost of quality classification for each activity. B. Prepare a cost of quality report. Assume sales for the period were 4,000,000. Round percentages to one decimal place. C. Interpret the cost of quality report.
Using the data in P4-2 and Microsoft Excel: 1. Separate the variable and fixed elements. 2. Determine the cost to be charged to the product for the year. 3. Determine the cost to be charged to factory overhead for the year. 4. Determine the plotted data points using Chart Wizard. 5. Determine R2. 6. How do these solutions compare to the solutions in P4-2 and P4-3? 7. What does R2 tell you about this cost model?
Selected activities and other information are provided for Patterson Company for its most recent year of operations. Required: 1. Form reduced system cost pools for activities 7 and 8. 2. Assign the costs of the reduced system cost pools to Wafer A and Wafer B. 3. What if the two activities were 1 and 3? Repeat Requirements 1 and 2. What does this imply?
Scattergraph, High-Low Method, and Predicting Cost for a Different Time Period from the One Used to Develop a Cost Formula Refer to the information for Farnsworth Company on the previous page. Required: 1. Prepare a scattergraph based on the 10 months of data. Does the relationship appear to be linear? 2. Using the high-low method, prepare a cost formula for the receiving activity. Using this formula, what is the predicted cost of receiving for a month in which 1,450 receiving orders are processed? 3. Prepare a cost formula for the receiving activity for a quarter. Based on this formula, what is the predicted cost of receiving for a quarter in which 4,650 receiving orders are anticipated? Prepare a cost formula for the receiving activity for a year. Based on this formula, what is the predicted cost of receiving for a year in which 18,000 receiving orders are anticipated? Use the following information for Problems 3-60 and 3-61: Farnsworth Company has gathered data on its overhead activities and associated costs for the past 10 months. Tracy Heppler, a member of the controllers department, has convinced management that overhead costs can be better estimated and controlled if the fixed and variable components of each overhead activity are known. One such activity is receiving raw materials (unloading incoming goods, counting goods, and inspecting goods), which she believes is driven by the number of receiving orders. Ten months of data have been gathered for the receiving activity and are as follows:
Matching Cost Behavior Descriptions to Cost Behavior Graphs Select the graph (A through L) that best matches the numbered (1 through 7) italicized descriptions of various cost behavior. For each graph, the vertical (y) axis represents total dollars of cost, and the horizontal (x) axis represents output units during the period. The graphs may be used more than once. 1. The cost of depreciation. The asset being depreciated is a large piece of production machinery equipment where the straight-line depreciation method is used. letter _________ 2. The cost of operating a forklift. The forklift is used to move work-in-process inventory in groups of 100 units across the factory floor. letter _________ 3. The cost of direct materials. The first 2,000 pounds of direct materials are free because they are donated by the local city government. After that, the direct materials cost consists of a per-unit amount that decreases after a threshold of 2,500 total pounds is reached. letter _________ 4. The cost of inspecting finished goods inventory. Each unit is inspected by a quality expert who is paid the same amount for each unit inspected. letter _________ 5. The cost of product shipping for all output shipped in the period. The shipping cost per unit decreases with each unit shipped up to a certain number of units, at which time the shipping cost per unit remains constant. letter _________ 6. The cost of compliance with Environmental Protection Agency (EPA) regulations. An electric car plant manufactures car batteries. Part of the manufacturing process involves the emission of toxic chemicals into the environment, which is regulated by the EPA in the form of a fee assessed on a per-unit manufactured basis. The per-unit cost of complying with these regulations increases with every fifth battery produced. letter ______ 7. The cost of customer energy consumption. The local electric utility company uses a pricing system designed to encourage customers to conserve energy usage. Therefore, the rate per kilowatt-hour that is charged to customers increases with each hour the customer consumes. letter _______
Cost Report, Value-Added and Non-Value-Added Costs Sanford, Inc., has developed value-added standards for four activities: purchasing parts, receiving parts, moving parts, and setting up equipment. The activities, the activity drivers, the standard and actual quantities, and the price standards for 20x1 are as follows: Activities Activity Driver SQ AQ SP Purchasing parts Purchase orders 2,600 3,640 $300 Receiving parts Receiving orders 5,200 7,800 195 Moving parts Number of moves 2,600 390 Setting up equipment Setup hours O 10,400 117 The actual prices paid per unit of each activity driver were equal to the standard prices. Required: 1. Prepare a cost report that lists the value-added, non-value-added, and actual costs for each activity. If an amount is zero, enter "0". Sanford, Inc. Value- and Non-Value-Added Cost Report For the Year Ended December 31, 20x1 Non- Value- Value- Actual Added Added Purchasing parts Receiving parts Moving parts Setting up equipment Total $ 2. Which…
Consumption Ratios; Activity RatesSaludable Company produces two types of get-well cards: scented andregular. Drivers for the four activities are as follows: ScentedCards RegularCards Inspection hoursSetup hoursMachine hoursNumber of moves 1,0804209602.880 7201802,880720 The following activity data have been collected: Inspecting productsSetting up equipmentMachiningMoving materials $45,00028,50030,72016,200 Required:1. Calculate the consumption ratios for the four drivers (round totwo decimal places).2. CONCEPTUAL CONNECTION Is there evidence of productdiversity? Explain the significance of product diversity for decisionmaking if the company chooses to use machine hours to assign all overhead.3. Calculate the activity rates that would be used to assign costs toeach product (round to two decimal places).4. Suppose that the activity rate for inspecting products is $20 perinspection hour. How many hours of inspection are expected forthe coming year?