Homework Answers
1) Activity based Costing
2) Cost Drivers
3) Value Added Activities
4) Non Value added Activity
5) Facility-Level Activity
6) Product-Level Activity
7) Batch-Level Activity
8) Unit-Level Activity
9) Just-in-time processing
10) Pull Approach
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Question 9 Match the following statements to the appropriate terms. Allocates overhead to multiple activity cost...
c. assigns activity cost pools to products and services, then allocates overhead back to the activity...
c. assigns activity cost pools to products and services, then allocates overhead back to the activity cost pools. d. allocates overhead directly to products and services based on activity levels e. none of these answers are correct. 21. Which of the following has the weakest linkage between activity and cost driver? Activity Machine setup Machine maintenance Lighting on shop floor Quality control Manual cloth making Cost Driver Number of setups Book value of machines Number of kilowatt-bours Square feet of...
Jordan Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead...
Jordan Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity cost pools follow: Activities Unit Level Batch Level Product Level Facility Level Cost $ 29,000 $ 17,390 $ 19,000 $ 361,000 Cost driver 1,000 labor hrs. 37 setups Percentage of use 19,000 units Production of 720 sets of cutting shears, one of the company’s 20 products,...
Rundle Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead...
Rundle Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity cost pools follow: Activities Unit Level Batch Level Product Level Facility Level Cost $ 65,000 $ 18,900 $ 15,000 $ 270,000 Cost driver 2,600 labor hrs. 35 setups Percentage of use 15,000 units Production of 720 sets of cutting shears, one of the company’s 20 products,...
Direct labor or machine hours may not be the appropriate cost driver for overhead in all...
Direct labor or machine hours may not be the appropriate cost driver for overhead in all areas of manufacturing due to the complexities of many manufacturing processes. Many companies use activity-based costing (ABC) which uses multiple drivers (items that consume resources) rather than just one driver to apply overhead to their activities. With ABC, a company can use a cost driver that has a direct cause/effect relationship in its applied overhead costs. Waterways looked into ABC as a method of...
Finch Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead...
Finch Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity cost pools follow: Activities Unit Level Batch Level Product Level Facility Level Cost $ 25, 200 $21,090 $13,000 $190,000 Cost driver 1,200 labor hrs. 37 setups Percentage of use 10,000 units Production of 860 sets of cutting shears, one of the company's 20 products, took 200...
Budgeted Cost $ 86,100 45,000 7,200 57,000 23,000 14,000 51,250 18,800 36,700 22,500 8,3ee 220,000 Name...
Budgeted Cost $ 86,100 45,000 7,200 57,000 23,000 14,000 51,250 18,800 36,700 22,500 8,3ee 220,000 Name of Budgeted Cost Plant insurance Testing raw materials Manufacturing equipment setup Quality inspections Property taxes Electricity, plant Electricity, manufacturing equipment Depreciation, plant Depreciation, manufacturing equipment Maintenance worker (manufacturing equipment) Indirect labor (manufacturing equipment setup) Design engineering Required: 1. Assign each of the budgeted costs above to one of the following activity cost pools: Engineering Equipment setup Quality control • Factory facilities Manufacturing equipment 2....
Match each definition with its related term by selecting the appropriate term in the dropdown provided....
Match each definition with its related term by selecting the appropriate term in the dropdown provided. (Select "None of these are correct if there is no term for the "Definition".) Activity-Based Costing Appraisal or Inspection Costs Batch-Level Activities External Failure Costs Definition A. Activities that are performed to benefit the organization as a whole. B. Activities that are independent of the of the number of units, but are performed for a group all at once. c. Activities that vary in...
Rocoe Company produces a variety of garden tools in a highly automated manufacturing facility. The costs and cost driver...
Rocoe Company produces a variety of garden tools in a highly automated manufacturing facility. The costs and cost drivers associated with four activity cost pools are given below: Activities: Unit Level Batch Level Product Level Facility Level Total Cost $32,480 $19,840 $5,680 $49,300 Total Cost Driver Volume 5,800 labor hours 400 set ups % of use 29,000 units Production of 26,000 units of a hand-held tiller required 320 labor hours, 41 setups, and consumed 40% of the product sustaining...
Fanning Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead...
Fanning Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity cost pools follow: Activities Unit Level Batch Level Product Level Facility Level Cost $ 35, 700 $14,960 $13,000 $360,000 Cost driver 1,700 labor hrs. 34 setups Percentage of use 20,000 units Production of 840 sets of cutting shears, one of the company's 20 products, took 100...
Match each definition with its related term by selecting the appropriate term in the dropdown provided....
Match each definition with its related term by selecting the appropriate term in the dropdown provided. (Select "None of these are correct" If there is no term for the "Definition".) Definition A Activities that are performed to benefit the organization as a whole B. Activities that are independent of the of the number of units, but are performed for a group all at once C. Activities that vary in direct proportion to the number of units produced or customers served...
c. assigns activity cost pools to products and services, then allocates overhead back to the activity cost pools. d. allocates overhead directly to products and services based on activity levels e. none of these answers are correct. 21. Which of the following has the weakest linkage between activity and cost driver? Activity Machine setup Machine maintenance Lighting on shop floor Quality control Manual cloth making Cost Driver Number of setups Book value of machines Number of kilowatt-bours Square feet of...
Direct labor or machine hours may not be the appropriate cost driver for overhead in all areas of manufacturing due to the complexities of many manufacturing processes. Many companies use activity-based costing (ABC) which uses multiple drivers (items that consume resources) rather than just one driver to apply overhead to their activities. With ABC, a company can use a cost driver that has a direct cause/effect relationship in its applied overhead costs. Waterways looked into ABC as a method of...
Finch Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity cost pools follow: Activities Unit Level Batch Level Product Level Facility Level Cost $ 25, 200 $21,090 $13,000 $190,000 Cost driver 1,200 labor hrs. 37 setups Percentage of use 10,000 units Production of 860 sets of cutting shears, one of the company's 20 products, took 200...
Budgeted Cost $ 86,100 45,000 7,200 57,000 23,000 14,000 51,250 18,800 36,700 22,500 8,3ee 220,000 Name of Budgeted Cost Plant insurance Testing raw materials Manufacturing equipment setup Quality inspections Property taxes Electricity, plant Electricity, manufacturing equipment Depreciation, plant Depreciation, manufacturing equipment Maintenance worker (manufacturing equipment) Indirect labor (manufacturing equipment setup) Design engineering Required: 1. Assign each of the budgeted costs above to one of the following activity cost pools: Engineering Equipment setup Quality control • Factory facilities Manufacturing equipment 2....
Match each definition with its related term by selecting the appropriate term in the dropdown provided. (Select "None of these are correct if there is no term for the "Definition".) Activity-Based Costing Appraisal or Inspection Costs Batch-Level Activities External Failure Costs Definition A. Activities that are performed to benefit the organization as a whole. B. Activities that are independent of the of the number of units, but are performed for a group all at once. c. Activities that vary in...
Fanning Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity cost pools follow: Activities Unit Level Batch Level Product Level Facility Level Cost $ 35, 700 $14,960 $13,000 $360,000 Cost driver 1,700 labor hrs. 34 setups Percentage of use 20,000 units Production of 840 sets of cutting shears, one of the company's 20 products, took 100...
Match each definition with its related term by selecting the appropriate term in the dropdown provided. (Select "None of these are correct" If there is no term for the "Definition".) Definition A Activities that are performed to benefit the organization as a whole B. Activities that are independent of the of the number of units, but are performed for a group all at once C. Activities that vary in direct proportion to the number of units produced or customers served...
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