Solution:
Determination of activity rate for each activity | ||||
Activity | Estimated Overhead Cost | Activity Base | Usage of Activity Base | Activity Rate |
Machine setup | $150,000.00 | Nos of setups | 500 | $300.00 |
Materials handling | $250,000.00 | Nos of parts | 100000 | $2.50 |
Machine depreciation | $720,000.00 | Nos of MHs | 9000 | $80.00 |
A manufacturer makes 2 types of snowmobiles, Basic (annual production 6,000) and Super (annual production 2,000)....
please explain 4. A manufacturer makes 2 types of snowmobiles, Basic (annual production 6,000) and Super (annual production 2,000). They set up 3 activity cost pools with their associated costs. Calculate the overhead activity rates based on ABC. AC FIUE FC base Costine Activity Cost Pool Cost Driver Machine set-up of set-ups Materials Handling of parts Machine Depreciation # of MHs Total costs $150,000 $250,000 $720,000 Basic 200 set ups 10 parts/unit 1 MH/unit Super 300 set ups 20 parts/unit...
Comprehensive In Class ABC Problem A manufacturer makes two types of snowmobiles. Basic and Deluxe, and reports the following data to be used in applying activity-based costing. The company budgets production of 6,000 Basic snowmobiles and 2,000 Deluxe snowmobiles. Activity Pool Activity Cost Driver Cost assigned Basic Deluxe Machine setup Number of setups $150,000 200 batches 300 batches Materials handling Number of parts $250,000 10 per unit 20 per unit Machine depreciation Machine Hours $720,000 1 MH per unit 1.5 MH...
Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows: Home Work $ 41 $ 63 31 350 568 670 units 310 units Direct materials cost per unit Direct labor cost per unit Sales price per unit Expected production per month 16 Harbour has monthly overhead of $174,710, which is divided into the following cost pools: Setup costs Quality control Maintenance Total $ 73,320 57,190 44,200 $174,710 The company has also compiled the...
Santana Corporation manufactures snowmobiles in its Blue Mountain, Wisconsin, plant. The following costs are budgeted for the first quarter's operations. Machine setup, indirect materials Inspections Tests Insurance, plant Engineering design Depreciation, machinery Machine setup, indirect labor Property taxes Oil, heating Electricity, plant lighting Engineering prototypes Depreciation, plant Electricity, machinery Machine maintenance wages $4,000 16,000 4,000 110,000 140,000 520,000 20,000 29,000 19,000 21,000 60,000 210,000 36,000 19,000 Classify the above costs of Santana Corporation into activity cost pools using the following:...
Two-Stage ABC for Manufacturing Detroit Foundry, a large manufacturer of heavy equipment components, has determined the following activity cost pools and cost driver levels for the year: Activity Cost Pool Activity Cost Activity Cost Driver Machine setup $720,000 12,000 setup hours Material handling 120,000 3,000 material moves Machine operation 680,000 10,000 machine hours The following data are for the production of single batches of two products, C23 Cams and U2 Shafts during the month of August: C23 Cams U2 Shafts...
Two-Stage ABC for Manufacturing Detroit Foundry, a large manufacturer of heavy equipment components, has determined the following activity cost pools and cost driver levels for the year: Activity Cost Pool Activity Cost Activity Cost Driver Machine setup $720,000 12,000 setup hours Material handling 120,000 3,000 material moves Machine operation 680,000 10,000 machine hours The following data are for the production of single batches of two products, C23 Cams and U2 Shafts during the month of August: C23 Cams U2 Shafts...
Classify whether the activity cost pools are at the unit, batch, product or facility level (cost hierarchy). 1. Procurement of raw materials 2. Material handling 3. Machine set-ups 4. Production 5. Quality inspection 6. Distribution
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...
Markham Company makes two products: Basic Product and Deluxe Product. Annual production and sales are 1,400 units of Basic Product and 1,000 units of Deluxe Product. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Basic Product requires 0.4 direct labor hours per unit and Deluxe Product requires 0.8 direct labor hours per unit. The total estimated overhead for next period is $99,485. The company is considering switching to an activity-based costing...
Donald Trump’s Company has budgeted manufacturing overhead costs of $3,000,000. It has allocated overhead on a plant-wide basis to its two products (The Wall and The Wig) 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 Cost Driver Estimated Overhead Expected Activity Material handling Number of moves $250,000 50,000 Purchase orders Number...