Question

- Window Help 6.05 GB U 55D ... Home Thu Fe AutoSave @ S Insert Draw Page Layout Calibri (Body) 12 Data Review Lab 4 - Chapter 17 - ABC Costing problem View Formulas A A General H79 1 Name 2 ACC 214 - Lab 4 Chapter 17 (ABC Casting) Use cell references formulas in highlighted cells The Hi ngston Corporation produces three products Product Product and Product Direct Labor * Manufacturing Overhead $20 per hour is the estimated direct labor cost. $1,050,000 estimated total cost Products 11 Number of units to be produced 12 Number of machine hours expected to be used 11 Number of direct labor hours expected to be used 30,000 2,700 20.000 20.000 3200 7.500 50,000 100 30.500 10 15 Part 11 calculate the total cost of producing each product and 16 the average cost per unit allocating MOH as described below. Fint calculate the overhead application rates. $1.100.000 $400,000 $60.000 $150,000 $325,000 $60,000 $1,90.000 $610.000 18 Total Direct Materials Used 19 Total Direct Labor Cost 20 located amount of MOH applied using direct labor hours as the factory wide cost driver Total Cost Overhead application rate using hours Average cost per unit 16 Part 2: calculate the total cost of producing each product and the average cost per unit allocating MOH as described below. $1.100.000 $400.000 $40.000 $150,000 $125.000 $60.000 $1.905,000 5610.000 9 Total Direct Materials Used Total Direct Labor Cost Sheet1 MacBook

Answer 1

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Kingston Corporation
Part 1
Calculation of Plant wide OH Rate	Total	Note
Overhead costs	1,850,000.00	A
Direct Labor Hours	30,500.00	B
Predetermined OH Rate	60.66	C=A/B

Overhead Allocated	X	Y	Z	Note
Direct Labor Hours	20,000.00	7,500.00	3,000.00	D
Predetermined OH Rate	60.66	60.66	60.66	See C
Overhead Allocated	1,213,114.75	454,918.03	181,967.21	E=C*D
Average Cost per unit	X	Y	Z
Direct materials	1,100,000.00	480,000.00	325,000.00
Direct Labors	400,000.00	150,000.00	60,000.00
Overhead Allocated	1,213,114.75	454,918.03	181,967.21	See E
Total cost	2,713,114.75	1,084,918.03	566,967.21	F
Units produced	30,000.00	20,000.00	10,000.00	G
Average Cost per unit	90.44	54.25	56.70	H=F/G

Part 2
Calculation of Plant wide OH Rate	Total	Note
Overhead costs	1,850,000.00	See A
Machine Hours	8,100.00	I
Predetermined OH Rate	228.40	J=A/I

Overhead Allocated	X	Y	Z	Note
Machine Hours	2,700.00	3,200.00	2,200.00	K
Predetermined OH Rate	228.40	228.40	228.40	See J
Overhead Allocated	616,666.67	730,864.20	502,469.14	L=K*J
Average Cost per unit	X	Y	Z
Direct materials	1,100,000.00	480,000.00	325,000.00
Direct Labors	400,000.00	150,000.00	60,000.00
Overhead Allocated	616,666.67	730,864.20	502,469.14	See L
Total cost	2,116,666.67	1,360,864.20	887,469.14	M
Units produced	30,000.00	20,000.00	10,000.00	See G
Average Cost per unit	70.56	68.04	88.75	N=M/G

Part 3
Calculation of ABC rates for overhead		O	P	Q=O/P
Activity cost pool	Cost Driver	Cost	Cost Driver	ABC rates
Setup of machines	Number of setups	300,000.00	250.00	1,200.00
Drilling	Number of Machine hours	910,000.00	8,100.00	112.35
Assembly	Number of Direct Labor hours	425,000.00	30,500.00	13.93
Inspection	Number of Inspections	215,000.00	100.00	2,150.00
Total Cost assigned		1,850,000.00

		See Q	R	S=Q*R	T	U=Q*T	V	W=Q*V
Allocation table			X	Y	Z
Activity cost pool	Cost Driver	ABC Rates	Activity used	Cost assigned	Activity used	Cost assigned	Activity used	Cost assigned
Setups	Production runs	1,200.00	120.00	144,000.00	80.00	96,000.00	50.00	60,000.00
Inspection	Inspection hours	112.35	2,700.00	303,333.33	3,200.00	359,506.17	2,200.00	247,160.49
Power	Machine Hours	13.93	20,000.00	278,688.52	7,500.00	104,508.20	3,000.00	41,803.28
Maintenance	Maintenance hours	2,150.00	50.00	107,500.00	30.00	64,500.00	20.00	43,000.00
Total Cost assigned				833,521.86		624,514.37		391,963.77	X

Average Cost per unit	X	Y	Z
Direct materials	1,100,000.00	480,000.00	325,000.00
Direct Labors	400,000.00	150,000.00	60,000.00
Overhead Allocated	833,521.86	624,514.37	391,963.77	See X
Total cost	2,333,521.86	1,254,514.37	776,963.77	Y
Units produced	30,000.00	20,000.00	10,000.00	See F
Average Cost per unit	77.78	62.73	77.70	Z=Y/F