arse H Noriko Fujita is the controller of Nakamura, Inc., an electronic controls company located in...
Noriko Fujita is the controller of Nakamura, Inc., an electronic controls company located in Yokohama. She recently attended a seminar on activity-based costing (ABC) in Tokyo. Nakamura's traditional cost accounting system has three cost categories: direct materials, direct labor, and indirect production costs. The company allocates indirect production costs on the basis of direct-labor cost. The following is the 20x0 budget for the automotive controls department in thousands of Japanese yen): (Click the icon to view the 20x0 budget.) Requirement...
Direct materials ¥ 50,000 Direct labor 38,400 Indirect production costs 21,120 Total cost ¥ 109,520 Activity Cost-Allocation Base Predicted 20X0 Cost (¥000) Receiving Direct materials cost ¥ 3,500 Assembly Number of control units 11,960 Quality control QC hours 2,015 Shipping Number of boxes shipped 3,645 TOTAL ¥21,120 In 20X0 the Automotive Controls Department expects to produce 92,000 control units, use 650 quality control hours, and ship 8,100 boxes. Suppose Kato prices its products at 15% above total production cost. An...
$ Nichols Inc, manufactures remote controls. Currently the company uses a plant - wide rate for allocating manufacturing overhead. The plant manager is considering switching - over to ABC costing system and has asked the accounting department to identify the primary production activities and their cost drivers which are as follows: Activities Cost driver Allocation Rate Material handling Number of parts $4 per part Assembly Labor hours $20 per hour Inspection Time at inspection station $10 per minute The current...
Nichols Inc. manufactures remote controls. Currently the company uses a plantminus−wide rate for allocating manufacturing overhead. The plant manager is considering switchingminus−over to ABC costing system and has asked the accounting department to identify the primary production activities and their cost drivers which are as follows: Activities Cost driver Allocation Rate Material handling Number of parts $2 per part Assembly Labor hours $20 per hour Inspection Time at inspection station $3 per minute The current traditional cost method allocates overhead...
Harwell, Inc. produces two different products, Product A and Product B. Harwell uses a traditional volume-based costing system in which direct labor hours are the allocation base. Harwell is considering switching to an ABC system by splitting its manufacturing overhead cost of $750,000 across three activities: Setup, Production, and Finishing. Under the traditional volume-based costing system, the predetermined overhead rate is $7.50/direct labor hour. Under the ABC system, the rate for each activity and usage of the activity drivers are...
Harwell, Inc. produces two different products, Product A and Product B. Harwell uses a traditional volume-based costing system in which direct labor hours are the allocation base. Harwell is considering switching to an ABC system by splitting its manufacturing overhead cost of $850,000 across three activities: Setup, Production, and Finishing. Under the traditional volume-based costing system, the predetermined overhead rate is $8.50/direct labor hour. Under the ABC system, the rate for each activity and usage of the activity drivers are...
Carter, Inc. produces two different products, Product A and Product B. Carter uses a traditional volume-based costing system in which direct labor hours are the allocation base. Carter is considering switching to an ABC system by splitting its manufacturing overhead cost of $783,000 across three activities: Design, Production, and Inspection. Under the traditional volume-based costing system, the predetermined overhead rate is $2.61/direct labor hour. Under the ABC system, the rate for each activity and usage of the activity drivers are...
25-15 ACTIVITY-BASED COSTING AND ACTIVITY-BASED MANAGEMENT, AUTOMOTIVE SUPPLIER O'Sullivan Company is an automotive component supplier. O'Sullivan has been approached by Honda Canada's Alliston, Ontario, plant to consider expanding its production of part 24Ž2 to a total annual quantity of 2,000 units. This part is a low-volume, complex product with a high gross margin that is based on a proposed (quoted) unit sales price of $7.50. O'Sullivan uses a traditional costing system that allocates indirect manufacturing costs based on direct labour...
California Circuits Company (3C) manufactures a variety of components. Its Valley plant specializes in two electronic components used in circuit boards. These components serve the same function and perform equally well. The difference in the two products is the raw material. The XL-D chip is the older of the two components and is made with a metal that requires a wash prior to assembly. Originally, the plant released the wastewater directly into a local river. Several years ago, the company...
LIVE UCIUI ing di 10 OD dation on an expansion strategy? CEMENT 05-15 ACTIVITY-BASED COSTING AND ACTIVITY-BASED MANAGEMENT, AUTOMOTIVE SUPPLIER O'Sullivan Company is an automotive component supplie motive component supplier. O'Sullivan has been approached by Honda Canada's Alliston, Ontario, plant to consider expanding its production of part 2422 to a total annual quantity of 2.000 units. This part is a low-volume, complex product with a high gross margin that is based on a proposed (quoted) unit sales price of $7.50....