Jordan Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead...
Jordan Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity cost pools follow:
| Activities | ||||||||
| Unit Level | Batch Level | Product Level | Facility Level | |||||
| Cost | $ | 29,000 | $ | 17,390 | $ | 19,000 | $ | 361,000 |
| Cost driver | 1,000 labor hrs. | 37 setups | Percentage of use | 19,000 units | ||||
Production of 720 sets of cutting shears, one of the company’s 20 products, took 270 labor hours and 6 setups and consumed 15 percent of the product-sustaining activities.
Required
-
Had the company used labor hours as a companywide allocation base, how much overhead would it have allocated to the cutting shears?
-
How much overhead is allocated to the cutting shears using activity-based costing?
-
Compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 720 units are produced. If direct product costs are $110 and the product is priced at 35 percent above cost for what price would the product sell under each allocation system?
Homework Answers
| b.Allocated using ABC = Driver*Rate | ||
| =29000*270/1000 + 17390*6/37 + 19000*15% + 361000*720/19000 | ||
| 27,180 | ||
| c. | ||
| ABC | Direct Labor hours | |
| Total overhead cost | 27,180 | 115125.3 |
| Overhead cost per unit | 37.75 | 159.90 |
| Direct product Cost | 110 | 110 |
| Overhead cost per unit | 37.75 | 159.89625 |
| Total cost | 147.75 | 269.89625 |
| Selling price | 199.4625 | 364.3599375 |
Add Answer to:
Jordan Company produces commercial gardening equipment. Since
production is highly automated, the company allocates its overhead...
Rundle Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead...
Rundle Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity cost pools follow: Activities Unit Level Batch Level Product Level Facility Level Cost $ 65,000 $ 18,900 $ 15,000 $ 270,000 Cost driver 2,600 labor hrs. 35 setups Percentage of use 15,000 units Production of 720 sets of cutting shears, one of the company’s 20 products,...
Fanning Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead...
Fanning Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity cost pools follow: Activities Unit Level Batch Level Product Level Facility Level Cost $ 35, 700 $14,960 $13,000 $360,000 Cost driver 1,700 labor hrs. 34 setups Percentage of use 20,000 units Production of 840 sets of cutting shears, one of the company's 20 products, took 100...
Finch Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead...
Finch Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity cost pools follow: Activities Unit Level Batch Level Product Level Facility Level Cost $ 25, 200 $21,090 $13,000 $190,000 Cost driver 1,200 labor hrs. 37 setups Percentage of use 10,000 units Production of 860 sets of cutting shears, one of the company's 20 products, took 200...
Valpar Company produces several lines of laundry hampers. The factory is highly automated and uses an...
Valpar Company produces several lines of laundry hampers. The factory is highly automated and uses an activity-based costing system to allocate overhead costs to its various products. During the upcoming period the company expects to produce 72,000 units. The costs and cost drivers associated with four activity cost pools are given below: Activities Unit Level Batch Level Product Level Facility Level Cost $20,000 $8,000 $15,000 $36,000 Cost Driver 4,000 labor hours 200 set-ups % of use 72,000 units Production of...
Paris, Inc, Produces two products, Product A and Product B. If currently allocates overhead costs using...
Paris, Inc, Produces two products, Product A and Product B. If currently allocates overhead costs using direct-labor hours, but the controller has recommended an activity-based costing (ABC) system using the following data: Activity Level Activity Cost-Driver Base Cost Product A Product B Production setup Number of setups 90,000 11 19 Materials handing & requisition Number of parts per unit 15,000 6 18 Packaging & shipping Number of units shipped 45,000 60,000 120,000 Total overhead 150,000 A, Compute the amount of...
Rocoe Company produces a variety of garden tools in a highly automated manufacturing facility. The costs and cost driver...
Rocoe Company produces a variety of garden tools in a highly automated manufacturing facility. The costs and cost drivers associated with four activity cost pools are given below: Activities: Unit Level Batch Level Product Level Facility Level Total Cost $32,480 $19,840 $5,680 $49,300 Total Cost Driver Volume 5,800 labor hours 400 set ups % of use 29,000 units Production of 26,000 units of a hand-held tiller required 320 labor hours, 41 setups, and consumed 40% of the product sustaining...
also, Calculate the overhead rates using the traditional approach. Overhead Rates using the traditional approach is....
also, Calculate the overhead rates using the
traditional approach.
Overhead Rates using the traditional approach is.
______$___________ per direct labor hour
What amount of overhead would be allocated to the wool
and cotton product lines using the traditional approach, assuming
direct labor hours were incurred evenly between the wool and
cotton?
Overhead Allocated. for Wool Product Line is
=____$_____
Overhead Allocated. for Cotton Product Line is
=____$______
EcoFabrics has budgeted overhead costs of $1,105,650. It has allocated overhead on...
EcoFabrics has budgeted overhead costs of $1,039,500. It has allocated overhead on a plantwide basis cotton)...
EcoFabrics has budgeted overhead costs of $1,039,500. It has allocated overhead on a plantwide basis cotton) using direct labor hours which are estimated to be 495,000 for the current year. The company has decided to experiment with activity-based costing and has created two activity cost pools and related activity cost drivers. These two cost pools are cutting (cost driver is machine hours) and design (cost driver is number of setups). Overhead allocated to the cutting cost pool is $396,000 and...
EcoFabrics has budgeted overhead costs of $1,115,100. It has allocated overhead on a plantwide basis to...
EcoFabrics has budgeted overhead costs of $1,115,100. It has
allocated overhead on a plantwide basis to its two products (wool
and cotton) using direct labor hours which are estimated to be
531,000 for the current year. The company has decided to experiment
with activity-based costing and has created two activity cost pools
and related activity cost drivers. These two cost pools are cutting
(cost driver is machine hours) and design (cost driver is number of
setups). Overhead allocated to the...
EcoFabrics has budgeted overhead costs of $1,152,900. It has allocated overhead on a plantwide basis to...
EcoFabrics has budgeted overhead costs of $1,152,900. It has
allocated overhead on a plantwide basis to its two products (wool
and cotton) using direct labor hours which are estimated to be
549,000 for the current year. The company has decided to experiment
with activity-based costing and has created two activity cost pools
and related activity cost drivers. These two cost pools are cutting
(cost driver is machine hours) and design (cost driver is number of
setups). Overhead allocated to the...
Fanning Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity cost pools follow: Activities Unit Level Batch Level Product Level Facility Level Cost $ 35, 700 $14,960 $13,000 $360,000 Cost driver 1,700 labor hrs. 34 setups Percentage of use 20,000 units Production of 840 sets of cutting shears, one of the company's 20 products, took 100...
Finch Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity cost pools follow: Activities Unit Level Batch Level Product Level Facility Level Cost $ 25, 200 $21,090 $13,000 $190,000 Cost driver 1,200 labor hrs. 37 setups Percentage of use 10,000 units Production of 860 sets of cutting shears, one of the company's 20 products, took 200...
also, Calculate the overhead rates using the
traditional approach.
Overhead Rates using the traditional approach is.
______$___________ per direct labor hour
What amount of overhead would be allocated to the wool
and cotton product lines using the traditional approach, assuming
direct labor hours were incurred evenly between the wool and
cotton?
Overhead Allocated. for Wool Product Line is
=____$_____
Overhead Allocated. for Cotton Product Line is
=____$______
EcoFabrics has budgeted overhead costs of $1,105,650. It has allocated overhead on...
EcoFabrics has budgeted overhead costs of $1,039,500. It has allocated overhead on a plantwide basis cotton) using direct labor hours which are estimated to be 495,000 for the current year. The company has decided to experiment with activity-based costing and has created two activity cost pools and related activity cost drivers. These two cost pools are cutting (cost driver is machine hours) and design (cost driver is number of setups). Overhead allocated to the cutting cost pool is $396,000 and...
EcoFabrics has budgeted overhead costs of $1,115,100. It has
allocated overhead on a plantwide basis to its two products (wool
and cotton) using direct labor hours which are estimated to be
531,000 for the current year. The company has decided to experiment
with activity-based costing and has created two activity cost pools
and related activity cost drivers. These two cost pools are cutting
(cost driver is machine hours) and design (cost driver is number of
setups). Overhead allocated to the...
EcoFabrics has budgeted overhead costs of $1,152,900. It has
allocated overhead on a plantwide basis to its two products (wool
and cotton) using direct labor hours which are estimated to be
549,000 for the current year. The company has decided to experiment
with activity-based costing and has created two activity cost pools
and related activity cost drivers. These two cost pools are cutting
(cost driver is machine hours) and design (cost driver is number of
setups). Overhead allocated to the...
Most questions answered within 3 hours.
-
Oakdale Fashions, Inc. had $245,000 in 2018 taxable income.
Using the tax schedule in Table 2.3...
asked 3 minutes ago -
The marketing class at CSUS had an average score of 150. An
educational analyst determined that...
asked 1 hour ago -
Justin Case has purchased a $250 000 home by putting 20 % down
and taking out...
asked 1 hour ago -
1. In a labor market, marginal cost for a firm is
____________.
a. recruiting cost
b....
asked 2 hours ago -
On January 1, 2019, ABC Company issued $60,000,000 of 20-year,
10.5% bonds when the market rate...
asked 2 hours ago -
39.4% of US homes continue to use a landline in addition to cell
phone service. 3...
asked 3 hours ago -
Starting with benzene, synthesize 1-phenyl-1-butyne.
Show intermediates and reagents.
asked 4 hours ago -
Create a 32-run crossed array design with six control factors
and two noise factors such that...
asked 4 hours ago -
A 500g sample of sand from source A has the following amounts
retained on each sieve....
asked 4 hours ago -
In
your own words, please explain the essay by John Keynes wrote "The
End of Laissez...
asked 4 hours ago -
How are the matrix and pixels related? Why are smaller
pixels better for diagnostic quality?
asked 4 hours ago -
2. An AC generator has 80 rectangular loops on
its armature. Each loop is 11 cm...
asked 4 hours ago