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QUESTION 1: You got funding from the Zambia Development Agency (ZDA) to invest in innovations of...
The Boston Company has only two product lines: computer parts and cell phones. Outside cost consultants...
The Boston Company has only two product lines: computer parts and cell phones. Outside cost consultants have to recommend that the company use activity-based costing to allocate the total overhead costs to product lines. The company expects to produce 4,000 computer parts and 2,000 cell phones in 2019. Each computer part requires 2 direct labor hours to produce and each cell phone requires 0.5 hours to produce. The direct material and direct labor costs included in the two products are...
Question 2 Grafton Ltd produces three products: X, Y and Z. The company has been using...
Question 2 Grafton Ltd produces three products: X, Y and Z. The company has been using a single direct labour cost percentage to allocate overhead costs to products. Recently, managers of Grafton have noticed that, due to increasing overbeads and loss of market share, the current costing system is in need of replacement. A specific team has been charged with the responsibility of developing a new system of costing based on activities. Production information is as follows: Production volume Selling...
Question 3 International Steel Company has budgeted manufacturing overhead costs of $1,995,000. It has allocated overhead...
Question 3 International Steel Company has budgeted manufacturing overhead costs of $1,995,000. It has allocated overhead on a plant-wide basis to its two products (soft steel and hard steel) using machine hours, which are estimated to be 100,000 for the current year. The company has decided to experiment with activity-based costing and has created five activity cost pools and related activity cost drivers as follows: Activity Centre Cost Driver Estimated Activity Material handling Purchase orders Product testing Machine set-up Machining...
International Steel Company has budgeted manufacturing overhead costs of $1,971,000. It has allocated overhead on a...
International Steel Company has budgeted manufacturing overhead costs of $1,971,000. It has allocated overhead on a plant-wide basis to its two products (soft steel and hard steel) using machine hours, which are estimated to be 100,000 for the current year. The company has decided to experiment with activity-based costing and has created five activity cost pools and related activity cost drivers as follows: Activity Centre Material handling Purchase orders Product testing Machine set-up Machining Cost Driver Estimated Activity Number of...
ABC QUESTION: Owl Ltd This company has a subsidiary called Birdy Limited and is worried about...
ABC QUESTION: Owl Ltd This company has a subsidiary called Birdy Limited and is worried about the costing process Birdy Ltd makes two products, Feathers and Claws. It currently recovers overheads using a rate per direct labour hour. Information relating to each of these products is set out below. Claws £91 18,000 units 800 5 hours Feathers Selling price per unit £52 Annual sales volume 15,000 units Number of sales invoices issued each year 200 Labour time per unit 2...
ABC QUESTION: Owl Ltd This company has a subsidiary called Birdy Limited and is worried about...
ABC QUESTION: Owl Ltd This company has a subsidiary called Birdy Limited and is worried about the costing process Birdy Ltd makes two products, Feathers and Claws. It currently recovers overheads using a rate per direct labour hour. Information relating to each of these products is set out below. Claws £91 18,000 units 800 Feathers Selling price per unit £52 Annual sales volume 15,000 units Number of sales invoices issued each year 200 Labour time per unit 2 hours Labour...
The requirement is included there but nonetheless, here they are below. Thank ms Requirement (a) Calculate...
The requirement is included there but nonetheless,
here they are below. Thank ms
Requirement
(a) Calculate the overhead rates and product unit costs for X, Y
and Z under the existing costing
system.
3 Marks
(b) Using the information provided, decide on the most appropriate
cost drivers and allocate the overhead costs accordingly. Calculate
product costs for the three products using activity based costing
methods to allocate overheads.
12 Marks
(c) Critically evaluate activity based costing approaches for
allocating overheads....
Bonne Nuit Ltd manufacture and sell top quality beds and mattresses. In the mattresses department, Bonne Nuit make pocket sprung, foam and latex mattresses. In the past, they have used absorption costing system to allocate overhead costs to their products
Bonne Nuit Ltd manufacture and sell top quality beds and mattresses. In the mattresses department, Bonne Nuit make pocket sprung, foam and latex mattresses. In the past, they have used absorption costing system to allocate overhead costs to their products, with labour hours as the allocation base. The following information relates to the production and sale of the three mattresses.Pocket sprungFoamLatexSelling price per unit£1,000£750£2,150Direct material cost per unit£238.50£156£219.60Direct labour cost per unit£90£60£150Direct labour hours to make one unit8610Annual production (units)1,4402,2961,400Number...
Smart Phone Units produced Direct material and direct labor costs Direct labor hours 10,000 $78,000 10,000...
Smart Phone Units produced Direct material and direct labor costs Direct labor hours 10,000 $78,000 10,000 Regular Phone Units produced Direct material and labor costs Direct labor hours 100,000 $738,000 90,000 ABC has decided it wants to implement an activity based costing system to cost its products. The following is some data accumulated for the implementation of the ABC system: Activity Cost Cost Driver Ser-ups Material handling Machining Quality testing $120,000 $60,000 $100,000 $80.000 # of production runs # of...
Question 2 The Morris Company produces metal frames-frame A and frame B. Factory overhead is applied...
Question 2 The Morris Company produces metal frames-frame A and frame B. Factory overhead is applied on the basis of machine hours. There were 50.000 frames of A and 200,000 Trames of B produced and the following costs for direct materials and direct labour were incurred: Direct Materials ($) Direct Labour (S) Frame A 10,000 4,000 Frame B 100,000 40,000 Factory overhead costs of $154,000 in total were incurred. The data in the following table relate to the factory overhead...
Question 2 Grafton Ltd produces three products: X, Y and Z. The company has been using a single direct labour cost percentage to allocate overhead costs to products. Recently, managers of Grafton have noticed that, due to increasing overbeads and loss of market share, the current costing system is in need of replacement. A specific team has been charged with the responsibility of developing a new system of costing based on activities. Production information is as follows: Production volume Selling...
Question 3 International Steel Company has budgeted manufacturing overhead costs of $1,995,000. It has allocated overhead on a plant-wide basis to its two products (soft steel and hard steel) using machine hours, which are estimated to be 100,000 for the current year. The company has decided to experiment with activity-based costing and has created five activity cost pools and related activity cost drivers as follows: Activity Centre Cost Driver Estimated Activity Material handling Purchase orders Product testing Machine set-up Machining...
International Steel Company has budgeted manufacturing overhead costs of $1,971,000. It has allocated overhead on a plant-wide basis to its two products (soft steel and hard steel) using machine hours, which are estimated to be 100,000 for the current year. The company has decided to experiment with activity-based costing and has created five activity cost pools and related activity cost drivers as follows: Activity Centre Material handling Purchase orders Product testing Machine set-up Machining Cost Driver Estimated Activity Number of...
ABC QUESTION: Owl Ltd This company has a subsidiary called Birdy Limited and is worried about the costing process Birdy Ltd makes two products, Feathers and Claws. It currently recovers overheads using a rate per direct labour hour. Information relating to each of these products is set out below. Claws £91 18,000 units 800 5 hours Feathers Selling price per unit £52 Annual sales volume 15,000 units Number of sales invoices issued each year 200 Labour time per unit 2...
ABC QUESTION: Owl Ltd This company has a subsidiary called Birdy Limited and is worried about the costing process Birdy Ltd makes two products, Feathers and Claws. It currently recovers overheads using a rate per direct labour hour. Information relating to each of these products is set out below. Claws £91 18,000 units 800 Feathers Selling price per unit £52 Annual sales volume 15,000 units Number of sales invoices issued each year 200 Labour time per unit 2 hours Labour...
The requirement is included there but nonetheless,
here they are below. Thank ms
Requirement
(a) Calculate the overhead rates and product unit costs for X, Y
and Z under the existing costing
system.
3 Marks
(b) Using the information provided, decide on the most appropriate
cost drivers and allocate the overhead costs accordingly. Calculate
product costs for the three products using activity based costing
methods to allocate overheads.
12 Marks
(c) Critically evaluate activity based costing approaches for
allocating overheads....
Smart Phone Units produced Direct material and direct labor costs Direct labor hours 10,000 $78,000 10,000 Regular Phone Units produced Direct material and labor costs Direct labor hours 100,000 $738,000 90,000 ABC has decided it wants to implement an activity based costing system to cost its products. The following is some data accumulated for the implementation of the ABC system: Activity Cost Cost Driver Ser-ups Material handling Machining Quality testing $120,000 $60,000 $100,000 $80.000 # of production runs # of...
Question 2 The Morris Company produces metal frames-frame A and frame B. Factory overhead is applied on the basis of machine hours. There were 50.000 frames of A and 200,000 Trames of B produced and the following costs for direct materials and direct labour were incurred: Direct Materials ($) Direct Labour (S) Frame A 10,000 4,000 Frame B 100,000 40,000 Factory overhead costs of $154,000 in total were incurred. The data in the following table relate to the factory overhead...
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