Exercise 12-8A (Algo) Allocating costs among products LO 12-3 Rundle Construction Company expects to build three new homes during a specific accounting period. The estimated direct materials and labor costs are as follows. Expected Costs Direct labor Direct materials Home 1 $ 75,000 91,000 Home 2 $ 106,000 139,000 Home 3 $ 172,000 195,000 Assume Rundle needs to allocate two major overhead costs ($35,300 of employee fringe benefits and $21,250 of indirect materials costs) among the three jobs. Required Choose an appropriate cost driver for each of the overhead costs and determine the total cost of each house. Note: Round "Allocation rate" to 2 decimal places. Fringe Benefits: Home Allocation Rate x Weight of Base =Allocated Cost 1 = 2 x = 3 x = Total Indirect Materials: Home Allocation Rate x Weight of Base Allocated Cost 1 x = 2 x = 3 x Total The cost components to determine the total cost of each house: Expected Costs Direct labor Direct materials Fringe benefits Indirect materials Total cost Home 1 Home 2 Home 3 Total

Exercise 12-8A (Algo) Allocating costs among products LO 12-3 Rundle Construction Company expects to build three new homes during a specific accounting period. The estimated direct materials and labor costs are as follows. Expected Costs Direct labor Direct materials Home 1 $ 75,000 91,000 Home 2 $ 106,000 139,000 Home 3 $ 172,000 195,000 Assume Rundle needs to allocate two major overhead costs ($35,300 of employee fringe benefits and $21,250 of indirect materials costs) among the three jobs. Required Choose an appropriate cost driver for each of the overhead costs and determine the total cost of each house. Note: Round "Allocation rate" to 2 decimal places. Fringe Benefits: Home Allocation Rate x Weight of Base =Allocated Cost 1 = 2 x = 3 x = Total Indirect Materials: Home Allocation Rate x Weight of Base Allocated Cost 1 x = 2 x = 3 x Total The cost components to determine the total cost of each house: Expected Costs Direct labor Direct materials Fringe benefits Indirect materials Total cost Home 1 Home 2 Home 3 Total

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Question 1.2 Alejandro Kirk Manufacturing produces two types of entry doors: Deluxe and Standard. The assignment basis for support costs has been direct labour dollars. For 2021, Alejandro Kirk the following data for the two products: Deluxe Standard Sales units 50,000 400,000 Sales price per unit $650.00 $475.00 Direct material and labour costs per unit $180.00 $130.00 Manufacturing support costs per unit $80.00 $120.00 Last year, Alejandro Kirk Manufacturing purchased an expensive robotics system to allow for more decorative door products in the deluxe product line. The CFO suggested that an ABC analysis could be valuable to help evaluate a product mix and promotion strategy for the next sales campaign. She obtained the following ABC information: Activity Cost Driver Cost Total Deluxe Standard Setups # of setups $500,000 500 400 100 Machine related # of machine hours…
Question 4 Garland limited makes four components. A, B, C, and D, for which costs in the forthcoming years expected to be as follows. Production (units) Unit marginal cost Direct materials Direct labour Variable production overhead A 1,000 RM 4 8 2 14 B 2,000 RM 5 Incurred as a direct consequences of making A Incurred as a direct consequences of making B Incurred as a direct consequences of making C Incurred as a direct consequences of making D Other common fixed cost Total 9 3 17 с 4,000 RM 2 4 1 7 A total of RM50,000 fixed cost is expected to be incurred and the following shows the behavior of these fixed cost: RM D 3,000 RM 4 1,000 5,000 6,000 8,000 30,000 50,000 6 2 12 A sub-contractor has offered to supply A, B, C and D for RM12, RM21, RM10, and RM14 respectively. REQUIRED Decide whether Garland Ltd. should make or buy the components.
TB Problem Qu. 4-209 Daba Company manufactures two products, Product F ... Daba Company manufactures two products, Product F and Product G. The company expects to produce and sell 2,400 units of Product F and 2,800 units of Product G during the current year. The company uses activity-based costing to compute unit product costs for external reports. Data relating to the company's three activity cost pools are given below for the current year: Estimated Expected Activity Activity Cost Pool Overhead Cost Product F Product G Total Machine setups $ 16,720 132 setups 88 setups 220 setups Purchase orders $ 90,640 741 orders 1,319 orders 2,060 orders Order size $ 52,080 1,290 hours 1,190 hours 2,480 hours Required: Using the activity-based costing approach, determine the overhead cost per unit for each product. (Round your answers to 2 decimal places.) What is the overhead cost per unit for F and G.
Exercise 5-11A Allocating facility-level costs and a product elimination decision Blevins Boards produces two kinds of skateboards. Selected unit data for the two boards for the last quarter follow. Production costs Direct materials Direct labor Allocated overhead Total units produced and sold Total sales revenue Basco Boards Shimano Boards Required a. Compute the per-unit cost for each product. b. Compute the profit for each product. $25 $32 $15 5,000 $ 500,000 $38 $54 $18 10,000 $1,400,000 Blevins allocates production overhead using activity-based costing. It allocates delivery expense and sales commissions, which amount to $54,000 per quarter, to the two products equally.
Stage 2 ABC for Manufacturing: Reassigning Costs to Cost Objects Woodland Corporation has developed the following activity cost information for its manufacturing activities: Activity Activity cost Machine setup $ 70.00 per batch Movement 12.00 per batch move 0.12 per pound Drilling 5.00 per hole Welding 3.00 per inch Shaping 20.00 per hour Assembly 16.00 per hour Inspection 1.50 per unit Filling an order for a batch of 100 fireplace inserts (each insert weighing 50 pounds) required the following: • Three batch moves • Two sets of inspections • Drilling six holes in each unit Completing 90 inches of welds on each unit • Thirty minutes of shaping for each unit • One hour of assembly per unit Determine the activity cost of converting the raw materials into 100 fireplace inserts. $ 34,946
Exercise 6-50 (Algo) Two-Stage Cost Allocation and Predetermined Rates (LO 6-1, 2, 3) Tacoma Accessories makes two laptop cases, Plastic and Leather, that require direct materials, direct labor, and overhead. The following data refer to operations expected for next quarter: Revenue Direct material Direct labor Overhead: Material handling overhead Fabrication overhead Plastic $ 560,000 260,000 140,000 a. Material handling predetermined rate b. Fabrication predetermined rate Leather $ 580,000 340,000 120,000 c. Total overhead (Plastic) d. Total overhead (Leather) Total $ 1,140,000 Required: a. Compute the material handling overhead rate for next quarter. b. Compute the fabrication overhead rate for next quarter. c. What is the total overhead allocated to the Plastic case next quarter? d. What is the total overhead allocated to the Leather case next quarter? Tacoma uses a two-stage cost allocation system: It uses direct-material costs to allocate material handling overhead and direct-…
Question 2 Moon produces tow products the A and B. The direct costs of the two products are given below: Direct materials Direct Labour A £4.00 £3.00 Materials handling Production set up costs The budgeted production for 80,000 units of A and 30,000 units of B. The two main activities identified for the simple production process are material handling and production set ups. Product A requires large production runs and large transfers of materials from stores. However, product B is a more complex product with a number of different types of materials required and shorter and more frequent production runs. A Number Material Handling requisitions 100 Number of Production Set Ups 50 Required: B The budgeted fixed overheads of Caplan are £600,000 and they are made up as follows: £200,000 £400,000 £600,000 The use of these activities for each product is £4.20 £2.20 B 400 200 Total 500 250 Calculate the unit cost of each product using the costing method of Activity Based Costing.
QS 17-18 (Algo) Allocating costs using ABC for a service company LO P4 Qinto Company sells two types of products: basic and deluxe. The company provides technical support for its products at a budgeted overhead cost of $239,200 per year. The company allocates technical support cost based on 10,400 budgeted technical support calls per year. 1. Compute the activity rate for technical support using activity-based costing. 2. During January, Qinto received 630 calls on its deluxe model and 115 calls on its basic model. Allocate technical support costs to each model. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the activity rate for technical support using activity-based costing. Technical support activity rate Numerator Denominator Actual direct labor costs Actual direct materials Actual machine hours Actual manufacturing costs Required 2 >
Exercise 5-9A (Algo) Allocating costs with different cost drivers LO 5-2, 5-3 Sheridan Publishing identified the following overhead activities, their respective costs, and their cost drivers to produce the three types of textbooks the company publishes. Activity (Cost) Machine maintenance ($420,000) Setups ($690,000) Packing ($178,000) Photo development ($632,000) Cost Driver Number of machine hours Number of setups Number of cartons Number of pictures Moderate 180,000 a. Cost per book (volume-based allocation) b. Cost per book (activity-based costing) Deluxe textbooks are made with the finest-quality paper, six-color printing, and many photographs. Moderate texts are made with three colors and a few photographs spread throughout each chapter. Economy books are printed in black and white and include pictures only in chapter openings. Required a. Sheridan currently allocates all overhead costs based on machine hours. The company produced the following number of books during the prior…
Exercise 5-11A (Algo) Allocating facility-level costs and a product elimination decision LO 5-3 Baird Boards produces two kinds of skateboards. Selected unit data for the two boards for the last quarter follow: Production costs Direct materials Direct labor Allocated overhead Total units produced and sold Total sales revenue Basco Boards a. Cost per unit b. Profit $24.20 $ 30.20 $15.10 4, 200 $ 357,000 Basco Boards Baird allocates production overhead using activity-based costing. It allocates delivery expense and sales commissions, which amount to $55,000 per quarter, to the two products equally. Shimano Boards Required a. Compute the per-unit cost for each product. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. b. Compute the profit for each product. $36.40 $51.40 $18.40 8,200 $ 1,000,400 Shimano Boards
Question Content Area Prior to installing a JIT system, Grindstone Company used machine hours to assign maintenance costs to its three products of 4-inch, 6-inch, and 9-inch insulation. The maintenance costs totaled $432,000 per year. The machine hours used by each product and the quantity produced of each product are as follows: Machine Hours Quantity Produced 4-inch 5,000 15,000 rolls 6-inch 12,000 12,500 rolls 9-inch 7,000 11,200 rolls After installing JIT, three manufacturing cells were created, and the cell workers were trained to perform maintenance. Maintenance costs for the three cells still totaled $432,000; however, these costs are now traceable to each cell. Cell, 4-inch $125,000 Cell, 6-inch 175,000 Cell, 9-inch 165,000 The maintenance cost per roll of 9-inch insulation before JIT is installed would be a. $14.00. b. $11.25. c. $7.75. d. $30.00.
Question Two Pass-Well Company Limited produces a product that passes through two processes, Process 1 and Process 2. Details of activities for the month of December, 2020 is as follows; Process 1 @GH₵200.00 200hrs 3,500units GH₵20 per unit Process 2 GH₵25,000.00 600hrs 3,150units GH₵40 per unit a. You are required to prepare the relevant accounts b. You are required to prepare the relevant Accounts With practical example, differentiate between cost assignment and cost apportionment; product cost and period costs; direct Material introduced (4,000 units) Material added Labour Costs (@GH₵400 per hour) Output in units Scrap value of normal loss Note; i. Overhead is absorbed at 80% of labour costs. ii. Normal loss is estimated at 10% for both process. iii. No opening and closing stocks cost and indirect cost