Homework Answers
ABC costing uses different cost drivers for different activities to allocate cost to its products.
(1)
| Model 145 | Model 212 | |||||||||||
| Activity | Costs | Activity expected | Activity rate | Activity driver | Cost Assigned | Activity driver | Cost Assigned | |||||
| Components | ||||||||||||
| Changeover | $476,000 | 750 | Number of batches | $634.67 [$476,000/750] | per batch | 375 | $238,001.25[$634.67*375] | 375 | $238,001.25[$634.67*375] | |||
| Machining | $303,000 | 7,980 | Machine hours |
$37.97 [303,000/7980] |
per machine hour | 2650 | $100,620.5[$37.97*2650] | 5330 | $202,380.1[$37.97*5330] | |||
| Setups | $234,000 | 40 | Setups |
$5,850 [234,000/40] |
per setup | 20 | $117,000[$5,850*20] | 20 | $117,000[$5,850*20] | |||
| FINISHING | ||||||||||||
| Welding | $188,000 | 6500 | Welding hours |
$28.92 [188,000/6500] |
per welding hour | 2400 | $69,408[$28.92*2400] | 4100 | $118,572[$28.92*4100] | |||
| Inspecting | $234,000 | 885 | Inspections |
$264.41 [234,000/885] |
per inspection | 515 | $136,171.15[264.41*515] | 370 | $97,831.7[$264.41*370] | |||
| Rework | $60,500 | 220 | Rework orders |
$275 [60,500/220] |
per rework order | 170 | $46,750[$275*170] | 50 | $13,750[$275*50] | |||
| Support | ||||||||||||
| Purchasing | $135,000 | 537 | Purchase orders |
$251.40 [135,000/537] |
per purchase order | $90,001.2[$251.40*358] | $45,000.6[$251.40*179] | |||||
| Providing space and utilities | $107,000 | 4830 | units |
$22.15 [107000/4830] |
per unit | $39,870[$22.15*1800] | $67,114.5[$22.15*3030] | |||||
| Total overhead cost |
$8,37,822.1 |
$899,650.15 | ||||||||||
| units produced | 1800 | 3030 | ||||||||||
| cost per unit | $465.46[8,37,822.1/1800] | $296.91[899,650.15/3030] | ||||||||||
(2) cost per unit
| 145 | 212 | |||
| Material an labor | $290 | $140 | ||
| overhead cost | $465.46 | $296.91 | ||
| Total cost | $755.46 | $436.91 | ||
| [$290+465.46] | [$140+$296.91] |
(3)
| 145 | 212 | |||
| Price per unit | $2,150 | $260 | ||
| cost per unit | $755.46 | $436.91 | ||
| Profit(Loss ) | $1,394.54($2,150-755.46) | -$176.91($260-$436.91) | ||
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Exercise 17-7 Using the plantwide overhead rate to assess prices
LO P1 Way Cool produces two different models of air conditioners.
The company produces the mechanical systems in their components
department. The mechanical systems are combined with the housing
assembly in its finishing department. The activities, costs, and
drivers associated with these two manufacturing processes and the
production support process follow. (Loss amounts should be
indicated with a minus sign. Round your intermediate calculations
and round "Cost per unit and...
Exercise 17-7 Using the plantwide overhead rate to assess prices LO P1 Way Cool produces two...
Exercise 17-7 Using the plantwide overhead rate to assess prices LO P1 Way Cool produces two different models of air conditioners. The company produces the mechanical systems in their components department. The mechanical systems are combined with the housing assembly in its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow. (Loss amounts should be indicated with a minus sign. Round your intermediate calculations and round "Cost per unit and...
Exercise 04-8 Using the plantwide overhead rate to assess prices LO P1 Way Cool produces two...
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department. The mechanical systems are combined with the housing
assembly in its finishing department. The activities, costs, and
drivers associated with these two manufacturing processes and the
production support process follow. (Loss amounts should be
indicated with a minus sign. Round your intermediate calculations
and round "Cost per unit and...
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