a) | Estimated | Driver | rate | |||||
1) | cost (a) | (b) | c=a/b | |||||
processing orders | 49,000 | 200 | 245 | per order | ||||
Setting up production | 144,000 | 80 | 1800 | per run | ||||
handling materials | 220,000 | 100,000 | 2.2 | per pound | ||||
using machines | 240,000 | 12,000 | 20 | per mh | ||||
performing quality control | 62,100 | 45 | 1380 | per inspection | ||||
packing | 125,000 | 500,000 | 0.25 | per unit | ||||
Estimated activity | 840,100 | |||||||
estimated allocation base | 7,700 | |||||||
predetermined rate for direct labor | 109.1039 | |||||||
production cost using direct labor hours | ||||||||
institutional | standard | Silver | total | |||||
b) | Account | |||||||
Direct materials | 38000 | 21000 | 18000 | 77000 | ||||
direct labor | 6440 | 6720 | 8120 | 21280 | ||||
indirect costs | 50188 | 52370 | 63280 | 165838 | ||||
total cost | 94628 | 80090 | 89400 | 264118 | ||||
direct labor = DLH*$14 per hour | ||||||||
indirect cost = dLH*$109.1039 | ||||||||
c) | institutional | standard | Silver | total | ||||
Account | ||||||||
Direct materials | 38000 | 21000 | 18000 | 77000 | ||||
direct labor | 6750 | 6720 | 8120 | 21590 | ||||
Indirect costs | ||||||||
processing orders | 2695 | 2695 | 1715 | 7105 | ||||
Setting up production | 5400 | 5,400 | 12600 | 23400 | ||||
handling materials | 35200 | 15400 | 5940 | 56540 | ||||
using machines | 11800 | 2600 | 1200 | 15600 | ||||
performing quality control | 2760 | 4,140 | 5520 | 12420 | ||||
packing | 14000 | 5000 | 2500 | 21500 | ||||
total cost | 116605 | 62955 | 55595 | 235155 | ||||
Kitchen Supply, Inc (KSI), manufactures three types of flatware institutional standard, and silver. It applies all...
Kitchen Supply, Inc. (KSI), manufactures three types of flatware: institutional, standard, and silver. It applies all indirect costs according to a predetermined rate based on direct labor-hours. A consultant recently suggested that the company switch to an activity-based costing system and prepared the following cost estimates for year 2 for the recommended cost drivers. Recommended Cost Driver Number of orders Number of production runs Pounds of materials used Estimated Cost $ 46,000 198,000 260,000 Estimated Cost Driver Activity 200 orders...
Kitchen Supply, Inc. (KSI), manufactures three types of flatware: institutional, standard, and silver. It applies all indirect costs according to a predetermined rate based on direct labor-hours. A consultant recently suggested that the company switch to an activity-based costing system and prepared the following cost estimates for year 2 for the recommended cost drivers. 3.35 points Recommended Cost Driver Number of orders Number of production runs Pounds of materials used Estimated Cost $ 48,375 153,000 364,000 Estimated cost Driver Activity...
Kitchen Supply, Inc. (KSI), manufactures three types of flatware: Institutional, standard, and silver. It applies all Indirect costs according to a predetermined rate based on direct labor-hours. A consultant recently suggested that the company switch to an activity-based costing system and prepared the following cost estimates for year 2 for the recommended cost drivers. Recommended Cost Driver Number of orders Number of production runs Pounds of materials used Estimated Cost $ 43,000 144,000 300,eee Estimated cost Driver Activity 200 orders...
Kitchen Supply, Inc. (KSI), manufactures three types of flatware: institutional, standard, and silver. It applies all indirect costs according to a predetermined rate based on direct labor-hours. A consultant recently suggested that the company switch to an activity-based costing system and prepared the following cost estimates for year 2 for the recommended cost drivers. Activity Recommended Cost Diver Estimated Cost Estimated Cost Driver Activity Processing orders Number of orders $ 46,000 200 orders Setting up production Number of production runs...
Kitchen Supply, Inc. (KSI), manufactures three types of flatware: institutional, standard, and silver. It applies all indirect costs according to a predetermined rate based on direct labor-hours. A consultant recently suggested that the company switch to an activity-based costing system and prepared the following cost estimates for year 2 for the recommended cost drivers. Activity Recommended Cost Driver Estimated Cost Estimated Cost Driver Activity Processing orders Number of orders $ 42,000 175 orders Setting up production Number of production runs...
Kitchen Supply, Inc. (KSI), manufactures three types of flatware: institutional, standard, and silver. It applies all indirect costs according to a predetermined rate based on direct labor-hours. A consultant recently suggested that the company switch to an activity-based costing system and prepared the following cost estimates for year 2 for the recommended cost drivers. Activity Recommended Cost Driver Estimated Cost Estimated Cost Driver Activity Processing orders Number of orders $ 39,375 175 orders Setting up production Number of production runs...
Kitchen Supply, Inc. (KSI), manufactures three types of flatware: institutional, standard, and silver. It applies all indirect costs according to a predetermined rate based on direct labor-hours. A consultant recently suggested that the company switch to an activity-based costing system and prepared the following cost estimates for year 2 for the recommended cost drivers Activity Recommended Cost Driver Estimated Cost Estimated Cost Driver Activity Processing orders Number of orders $ 52,875 225 orders Setting up production Number of production runs...
Kitchen Supply, Inc. (KSI), manufactures three types of flatware: institutional, standard, and silver. It applies all indirect costs according to a predetermined rate based on direct labor-hours. A consultant recently suggested that the company switch to an activity-based costing system and prepared the following cost estimates for year 2 for the recommended cost drivers. Estimated Recommended Estimated Cost Driver Activity Activity Processing orders Setting up production Handling materials Machine depreciation and maintenance Machine-hours Performing quality control Packing Cost Driver Cost...
Problem 9-51 Activity-Based Costing and Predetermined Overhead Allocation Rates (LO 9-3, 5, 6) Kitchen Supply, Inc. (KSI), manufactures three types of flatware: institutional, standard, and silver. It applies all indirect costs according to a predetermined rate based on direct labor-hours. A consultant recently suggested that the company switch to an activity-based costing system and prepared the following cost estimates for year 2 for the recommended cost drivers. Activity Processing orders Setting up production Handling materials Machine depreciation and maintenance Performing...
College Supply Company makes three types of drinking glasses: short, medium, and tall. It presently applies overhead using a predetermined rate based on direct labor hours. A group of company employees recommend that CSC switch to activity-based costing and identified the following activities, cost drivers, estimated costs, and estimated cost driver units for Year 5 for each activity center. Activity Rec. Cost Driver Est. Cost Est. cost driver units Setting up production # of production runs 38,400 120 runs Processing...