Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Chapter 15, Problem 3CE
In 20x2, Choctaw Company implements a new process affecting labor and materials. The following reported data are provided to evaluate the effect on the company’s productivity:
Required:
- 1. Calculate the productivity profile for 20x1.
- 2. Calculate the productivity profile for 20x2, and comment on the effect of the new production and assembly process.
- 3. What if the labor hours used in 20x2 were 112,500? What does comparison of the 20x1 and 20x2 profiles now communicate?
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Apply the Concepts, Cost Reporting
Medco Inc., a manufacturing firm, has four activities: purchasing materials, molding, inspecting molds, and grinding imperfect molds. Purchasing
materials and molding are necessary activities; inspection and grinding are unnecessary. SQ provides the value-added quantity for each activity; AQ is
the actual activity output. The following data pertain to the four activities for the year ending (actual price per unit of the activity driver is assumed to
be equal to the standard price):
Activity Activity Driver
Purchasing Purchasing hours
Molding
Inspecting Inspection hours
Molding hours
Grinding. Number of units
Required:
SQ AQ SP
28,000 34,000 $20
42,000 47,600 121
0 8,400 15
0 6,000
6
1. Prepare a cost report for the year 1 ended that shows value-added costs, non-value-added costs, and total costs for each activity by completing
the following table:
Value-and Non-Value-Added Cost Report for the Year 1 Ended
Activity
Value-Added
Costs
Non-Value-Added…
Required information
[The following information applies to the questions displayed below.]
Rusties Company recently implemented an activity-based costing system. At the beginning of the year, management made
the following estimates of cost and activity in the company's five activity cost pools:
Activity Cost Pool
Labor-related
Purchase orders
Product testing
Template etching
General factory
Activity Cost Pool
Labor-related (DLHS)
Activity Measure
Product A
Product B
Product C
Product D
Direct labor-hours
Number of orders
Number of tests
Number of templates
Machine-hours
Total Overhead
Cost
Expected
Overhead
Cost
$ 30,115
$ 2,320
$ 6,930
$ 870
$ 65,100
2. The expected activity for the year was distributed among the company's four products as follows:
Product A
625
30
190
Expected Activity
1,585 DLHS
Product B
160
Purchase orders (orders)
190
Product testing (tests)
55
Template etching (templates)
17
3
General factory (MHS)
3,600
1,700
2,300
Using the ABC data, determine the total amount…
Amberjack Company is trying to decide on an allocation base to use to assign manufacturing overhead to jobs. The company has always used direct labor hours to assign manufacturing overhead to products, but it is trying to decide whether it should use a different allocation base such as direct labor dollars or machine hours.
Actual and estimated data for manufacturing overhead, direct labor cost, direct labor hours, and machine hours for the most recent fiscal year are summarized here:
Estimated Value
Actual Value
Manufacturing overhead cost
$ 597,000
$ 658,000
Direct labor cost
$ 399,000
$ 453,000
Direct labor hours
16,800
hours
18,300
hours
Machine hours
7,800
hours
8,800
hours
Required:
Based on the company’s current allocation base (direct labor hours), compute the following:Predetermined overhead rate.
Note: Round your answer to 2 decimal places.
Applied manufacturing overhead.
Note: Round your intermediate calculations to 2 decimal places and final answer…
Chapter 15 Solutions
Cornerstones of Cost Management (Cornerstones Series)
Ch. 15 - Prob. 1DQCh. 15 - What are the five principles of lean thinking?Ch. 15 - Prob. 3DQCh. 15 - Prob. 4DQCh. 15 - Explain how lean manufacturing is able to produce...Ch. 15 - What role does a demand-pull system have on lean...Ch. 15 - Prob. 7DQCh. 15 - Prob. 8DQCh. 15 - What is the purpose of assigning facility costs to...Ch. 15 - Why are units shipped used to calculate the...
Ch. 15 - When will the average unit cost be useful for...Ch. 15 - Explain why changes in value-stream profitability...Ch. 15 - Prob. 13DQCh. 15 - Prob. 14DQCh. 15 - What is productivity measurement?Ch. 15 - Prob. 16DQCh. 15 - Prob. 17DQCh. 15 - Discuss the advantages and disadvantages of...Ch. 15 - Prob. 19DQCh. 15 - Prob. 20DQCh. 15 - What is profit-linked productivity measurement and...Ch. 15 - Prob. 22DQCh. 15 - What is the price-recovery component?Ch. 15 - Anderson Company has the following departmental...Ch. 15 - During the week of June 12, Harrison Manufacturing...Ch. 15 - In 20x2, Choctaw Company implements a new process...Ch. 15 - Refer to Cornerstone Exercise 15.3. Choctaw...Ch. 15 - Prob. 5ECh. 15 - Bienestar Inc., has the following departmental...Ch. 15 - Bienestar, Inc., implemented cellular...Ch. 15 - Henderson, Inc., has just created five order...Ch. 15 - Prob. 9ECh. 15 - Shorts Manufacturing, Inc., has implemented lean...Ch. 15 - The following Box Scorecard was prepared for a...Ch. 15 - Prob. 12ECh. 15 - Carsen Company produces handcrafted pottery that...Ch. 15 - Helena Company needs to increase its profits and...Ch. 15 - Helena Company needs to increase its profits and...Ch. 15 - Prob. 16ECh. 15 - Lean manufacturing is characterized by all but one...Ch. 15 - Lean manufacturing uses value streams to produce a...Ch. 15 - A manufacturing cell within a value stream is...Ch. 15 - Total productive efficiency is achieved when both...Ch. 15 - The following information is given for a...Ch. 15 - Sixty employees (all CPAs) of a local public...Ch. 15 - Sixty employees (all CPAs) of a local public...Ch. 15 - Bradford Company, a manufacturer of small tools,...Ch. 15 - Continuous improvement is the governing principle...Ch. 15 - Prob. 26PCh. 15 - Jadlow Company produces handcrafted leather...Ch. 15 - Prob. 28P
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