Acoma Co. has identified one of its cost pools to be quality control and has assigned $53,998 to that pool. Number of inspections has been chosen as the cost driver for this pool; Acoma performs 26,600 inspections annually. Suppose Acoma manufactures two products that consume 8,512 (Product 1) and 18,088 (Product 2) inspections each. Using activity rates, determine the amount of quality control cost to be assigned to each of Acoma’s product lines. (Do not round intermediate calculation. Round your final answers to 2 decimal places. How would i find the amount of quality control cost to be assigned?

Acoma Co. has identified one of its cost pools to be quality control and has assigned $53,998 to that pool. Number of inspections has been chosen as the cost driver for this pool; Acoma performs 26,600 inspections annually. Suppose Acoma manufactures two products that consume 8,512 (Product 1) and 18,088 (Product 2) inspections each. Using activity rates, determine the amount of quality control cost to be assigned to each of Acoma’s product lines. (Do not round intermediate calculation. Round your final answers to 2 decimal places. How would i find the amount of quality control cost to be assigned?

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 22E: Silven Company has identified the following overhead activities, costs, and activity drivers for the...

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Silven Company has identified the following overhead activities, costs, and activity drivers for the coming year: Silven produces two models of cell phones with the following expected activity demands: 1. Determine the total overhead assigned to each product using the four activity drivers. 2. Determine the total overhead assigned to each model using the two most expensive activities. The costs of the two relatively inexpensive activities are allocated to the two expensive activities in proportion to their costs. 3. Using ABC as the benchmark, calculate the percentage error and comment on the accuracy of the reduced system. Explain why this approach may be desirable.
Nabors Company had actual quality costs for the year ended June 30, 20x5, as given below. At the zero-defect state, Nabors expects to spend 375,000 on quality engineering, 75,000 on vendor certification, and 50,000 on packaging inspection. Assume sales to be 25,000,000. Required: 1. Prepare a long-range performance report for 20x5. What does this report tell the management of Nabors? 2. Explain why quality costs still are present for the zero-defect state. 3. What if Nabors achieves the zero-defect state reflected in the report? What are some of the implications of this achievement?
Medical Tape makes two products: Generic and Label. It estimates it will produce 423,694 units of Generic and 652,200 of Label, and the overhead for each of its cost pools is as follows: It has also estimated the activities for each cost driver as follows: How much is the overhead allocated to each unit of Generic and Label?
Halsted Corp. has identified three cost pools in its manufacturing process: equipment maintenance, setups, and quality control. Total cost assigned to the three pools is $183,540, $85,760, and $87,400, respectively. Cost driver estimates for the pools are 11,400 machine hours, 160 setups, and 444 quality inspections, respectively. Calculate the activity rate for each of Halsted’s cost pools How would I find the activity rate for each of these?
Acoma Co. has identified one of its cost pools to be quality control and has assigned $58,473 to that pool. Number of inspections has been chosen as the cost driver for this pool; Acoma performs 26,700 inspections annually. Suppose Acoma manufactures two products that consume 10,146 (Product 1) and 16,554 (Product 2) inspections each.Assume that Acoma manufacturers only the two products mentioned and they consume 100 percent of the company’s quality inspections. Using activity proportions, determine how much quality control cost will be assigned to each of Acoma’s product lines. I can not figure out the problem above.?
Required information Acoma Co. has identified one of its cost pools to be quality control and has assigned $239,400 to that pool. Number of inspections has been chosen as the cost driver for this pool; Acoma performs 34,500 inspections annually. Suppose Acoma manufactures two products that consume 20,700 (Product 1) and 13,800 (Product 2) inspections each. Using activity rates, determine the amount of quality control cost to be assigned to each of Acoma's product lines. (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.) Product 1 Product 2 Quality Control Costs
Casey Company has five activity cost pools and two products. It expects to produce 200,000 units of its automobile scissors jack and 80,000 units of its truck hydraulic jack. Having identified its activity cost pools and the cost drivers for each cost pool, Casey Company accumulated the following data relative to those activity cost pools and cost drivers. Expected Use of Cost Drivers per Product Hydraulic Jacks Annual Overhead Data Expected Use of Cost Drivers per Activity Estimated Scissors Activity Cost Pools Ordering and receiving Machine setup Machining Assembling Inspecting and testing Cost Drivers Overhead Jacks $ 200,000 600,000 2,000,000 1,800,000 700,000 2,500 orders 1,200 setups 800,000 hours 1,500 700 500,000 1,200,000 15,000 Purchase orders 1,000 Setups Machine hours 500 Parts Tests 3,000,000 parts 35,000 tests 300,000 1,800,000 20,000 $5,300,000 Required: Using ABC Calculate Per Unit and Total cost of Both Products also Comment?
Required information Acoma Co. has identified one of its cost pools to be quality control and has assigned $239,400 to that pool. Number of inspections has been chosen as the cost driver for this pool; Acoma performs 34,500 inspections annually. Suppose Acoma manufactures two products that consume 20,700 (Product 1) and 13,800 (Product 2) inspections each. Assume that Acoma manufacturers only the two products mentioned and they consume 100 percent of the company's quality inspections. Using activity proportions, determine how much quality control cost will be assigned to each of Acoma's product lines. Product 1 Product 2 Quality Control Costs
Medical Tape makes two products: Generic and Label. It estimates it will produce 404,444 units of Generic and 656,000 of Label, and the overhead for each of its cost pools is as follows: Estimated Cost Pool Overhead Material Receipts $126,000 Machine Setups 325,000 Assembly 585,000 Inspection 330,000 Total $1,366,000 It has also estimated the activities for each cost driver as follows: Driver Generic Label Inspections 450 650 Requisitions 400 1,000 Parts 250 400 Setups 300 350 How much is the overhead allocated to each unit of Generic and Label? Do not round intermediate computations and round your answers to two decimal places. Generic Label Cost per unit $
Sabby Industries has three activity cost pools and two products. It expects to produce 2,900 units of Product S209 and 1.200 of Product NZ16. Having identified its activity cost pools and the cost drivers for each pool, Sabby accumulated the following data relative to those activity cost pools and cost drivers. Activity Cost Pool Machine set-ups Assembling Inspection (a) Cost Driver Assembling Set-ups Machine hours Calculate the overhead rates. Inspection Inspections Machine set-ups $ $ Estimated Overhead $78,660 323,000 6,400 Estimated Use of Cost Drivers per set-up 190 per inspection 17,000 100 per machine hour 5709 NZ16 130 10,100 60 60 6,900 40
Mission Company is preparing its annual profit plan. As part of its analysis of the profitability of individual products, the controller estimates the amount of overhead that should be allocated to the individual product lines from the information provided below. (CMA adapted) Multiple Choice Units produced Material moves per product line Direct labor-hours per product line Budgeted material handling costs: $279,500 Under an activity-based costing (ABC) system, the materials handling costs allocated to one unit of Specialty Windows would be: $6,450.00. $2,170.68. $12,900.00. Wall Mirrors 220 5 1,100 $10,320.00. Specialty Windows 20 60 1,200
Muning Corporation has a used a traditional accounting system to apply quality control costs uniformly to all products at a rate of P20 per direct labor hour. The average monthly direct labor hours for its main products are 9,600 hours. Muning wants to shift to ABC system in order to allocate quality control costs to its product in a more equitable manner. To start with, the process value analysis was conducted. Quality control activities were determined, as well as the appropriate cost drivers and cost driver rates. The analysis yielded the following: Activity Cost Driver Rate Quantity for Main Product Inspection of materials deliveries Inspections of goods in process Classes of materials P500 per class 10 per unit 20 classes Number of units 12,000 units Final inspection before delivery of finished goods Number of orders 200 per order 100 orders The quality control cost that would be assigned to the main products using traditional costing system a. 120,000 b. 150,000 c. 192,000 d.…