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Traditional Costing (A) | Activity based costing (B) | Difference (A) - (B) | ||
Standard | $ 1,12,500 | $ 91,900 | $ 20,600 | |
Custom | $ 2,25,000 | $ 2,45,600 | $ -20,600 | |
Workings: | ||||
Traditional Costing | ||||
Standard | = | $50000 X 225% | ||
= | $ 1,12,500 | |||
Custom | = | $100000 X 225% | ||
= | $ 2,25,000 | |||
Activity based costing | ||||
Standard | Custom | |||
(i) | Machining | = | 500 X $122 | 1000 X $122 |
= | $ 61,000 | $ 1,22,000 | ||
(ii) | Machine Setup | = | 100 X $309 | 400 X $309 |
= | $ 30,900 | $ 1,23,600 | ||
(i) + (ii) | Total | = | $ 91,900 | $ 2,45,600 |
Question 31 Elle Inc. makes two types of handbags: standard and custom. The controller has decided...
Elle Inc. makes two types of handbags: standard and custom. The controller has decided to use a plant-wide overhead rate based on direct labour costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine set-up. Presented below is information related to the company's operations. Custom $100,000 Direct labour costs Machine hours Set-up hours Standard $50,000 500 100 1,000 400...
Elle Inc. has two types of handbags: standard and custom. The controller has decided to use a plant-wide overhead rate based on direct labour hours. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine set-up. Presented below is information related to the company's operations. Standard Custom Direct labour costs $50,000 $100,000 Machine hours 500 1,000 Set-up hours 100 400...
Elle Inc. has two types of handbags: standard and custom. The controller has decided to use a plant wide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company's operations. Standard Custom Direct labor costs $50,000 $100,000 Machine hours 500 1,000 Setup hours 100...
Saddle Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company’s operations. Standard Custom Direct labor costs $50,000 $100,000 Machine hours 1,200 1,500 Setup hours 90 390...
Saddle Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company’s operations. Standard Custom Direct labor costs $50,000 $100,000 Machine hours 1,200 1,500 Setup hours 120 360...
Saddle Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company’s operations. Standard Custom Direct labor costs $53,000 $100,000 Machine hours 1,270 1,280 Setup hours 104 400...
Question 10 Saddle Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company's operations. Standard Custom $50,000 Direct labor costs Machine hours Setup hours 1,200 $100,000 1,200...
Saddle Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company's operations. Standard Custom Direct labor costs $50,000 $100,000 Machine hours 1,500 1,200 Setup hours 90 360...
Exercise 18-1 Saddle Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company's operations. Direct labor costs Machine hours Setup hours Standard $41,000 1,430 110 Custom $99,000...
Exercise 18-1 Saddle Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system were used. Two activity cost pools were developed: machining and machine setup. Presented below is information related to the company's operations. Direct labor costs Machine hours Setup hours Standard $40,000 1,450 103 Custom $110,000...