Aunt Ethel's Fancy Cookie Company manufactures and sells three flavors of cookies: Macaroon, Sugar, and Buttercream in a continuous production process. The company acquires enough raw materials and labor hours necessary for making cookies. The batch size for the cookies is limited to 1,000 cookies based on the size of the ovens and cookie molds owned by the company. Based on budgetary projections, the information listed below is available:
Required:
(1) Using the ABC system, for the sugar cookie, the most popular cookie, compute the estimated overhead costs per thousand cookies. (6 marks)
(2) Compute and compare the product cost per unit for sugar cookie under ABC method and traditional two-stage cost allocation method. (9 marks)
On comparing product cost per unit of sugar cookie under ABC is $ 0.384 whereas in traditional method it was $ 0.354 per unit which clearly indicates that there was under allocation of costs in two stage allocation method on comparison to Activity Based Costing which will help the company in pricing strategy of the product.
On comparing product cost per unit of sugar cookie under ABC is $ 0.384 whereas in traditional method it was $ 0.354 per unit which clearly indicates that there was under allocation of costs in two stage allocation method on comparison to Activity Based Costing which will help the company in pricing strategy of the product.
On comparing product cost per unit of sugar cookie under ABC is $ 0.384 whereas in traditional method it was $ 0.354 per unit which clearly indicates that there was under allocation of costs in two stage allocation method on comparison to Activity Based Costing which will help the company in pricing strategy of the product.
Aunt Ethel's Fancy Cookie Company manufactures and sells three flavors of cookies: Macaroon, Sugar, and Buttercream...
Aunt Ethel's Fancy Cookie Company manufactures and sells three flavors of cookies: Macaroon, Sugar, and Buttercream in a continuous production process. The company acquires enough raw materials and labor hours necessary for making cookies. The batch size for the cookies is limited to 1,000 cookies based on the size of the ovens and cookie molds owned by the company. Based on budgetary projections, the information listed below is available: Macaroon Sugar Buttercream Projected sales in units 500,000 800,000 600,000 PER...
Aunt Ethel's Fancy Cookie Company manufactures and sells three flavors of cookies: Macaroon, Sugar, and Buttercream in a continuous production process. The company acquires enough raw materials and labor hours necessary for making cookies. The batch size for the cookies is limited to 1,000 cookies based on the size of the ovens and cookie molds owned by the company. Based on budgetary projections, the information listed below is available: Macaroon Sugar Buttercream Projected sales in units 500,000 800,000 600,000 PER...
Aunt Ethel's Fancy Cookie Company manufactures and sells three flavors of cookies: Macaroon, Sugar, and Buttercream in a continuous production process. The company acquires enough raw materials and labor hours necessary for making cookies. The batch size for the cookies is limited to 1,000 cookies based on the size of the ovens and cookie molds owned by the company. Based on budgetary projections, the information listed below is available: Macaroon Sugar Buttercream Projected sales in units 500,000 800,000 ...
Aunt Ethel's Fancy Cookie Company manufactures and sells three flavors of cookies: Macaroon, Sugar, and Buttercream. The batch size for the cookies is limited to 1,000 cookies based on the size of the ovens and cookie molds owned by the company. Based on budgetary projections, the information listed below is available: Macaroon Sugar Buttercream Projected sales in units 500,000 800,000 600,000 PER UNIT data: Selling price $0.80 $0.75 $0.60 Direct materials $0.20 $0.15 $0.14 Direct labor $0.04 $0.02 $0.02 Hours...
PIC Question 2 (15 marks). Aunt Ethel's Fancy Cookie Company manufactures and sells three flavors of cookies: Macaroon, Sugar, and Buttercream in a continuous production process. The company acquires enough raw materials and labor hours necessary for making cookies. The batch size for the cookies is limited to 1,000 cookies based on the size of the ovens and cookie molds owned by the company. Based on budgetary projections, the information listed below is available: Macaroon Sugar Buttercream- Projected sales in...
Question 2 (15 marks) Aunt Ethel's Fancy Cookie Company manufactures and sells three flavors of cookies: Macaroon, Sugar, and Buttercream in a continuous production process. The company acquires enough raw materials and labor hours necessary for making cookies. The batch size for the cookies is limited to 1,000 cookies based on the size of the ovens and cookie molds owned by the company. Based on budgetary projections, the information listed below is available: Macaroon Sugar Buttercream Projected sales in units...
Question 2 (15 marks) Aunt Ethels Fancy Cookie Company manufactures and sells three flavors of co okies: Macaroon, Sugar, and Buttercream in a continuous production process. The company acquires enough raw materials and labor hours necessary form aking cookies. The batoh size for the cookies is limited to 1,000 cookies based on the size of the ovens and cookie molds owned by the company. Based on b udgetary projections, the information listed below is available Macaroon Sugar Buttercream 500,00 800,00...
Required: a. Using the ABC system, for the sugar cookie: 1. compute the estimated overhead costs per thousand cookies (rounded to two decimal places,4 marks). 2. compute the estimated operating profit per thousand cookies (rounded to two decimal places,5 marks). b. Using a traditional system (with direct labor hours as the overhead allocation base), for the sugar cookie: 1. compute the estimated overhead costs per thousand cookies (2 marks). 2. compute the estimated operating profit per...
Required: a. Using the ABC system, for the sugar cookie: 1. compute the estimated overhead costs per thousand cookies (rounded to two decimal places,4 marks). 2. compute the estimated operating profit per thousand cookies (rounded to two decimal places,5 marks). b. Using a traditional system (with direct labor hours as the overhead allocation base), for the sugar cookie: 1. compute the estimated overhead costs per thousand cookies (2 marks). 2. compute the estimated operating profit per...
Aunt Molly's Old Fashioned Cookies bakes cookies for retail stores. The company's best-selling cookie is chocolate nut supreme, which is marketed as a gourmet cookie and regularly sells for $8.00 per pound. The standard cost per pound of chocolate nut supreme, based on Aunt Molly's normal monthly production of 400,000 pounds, is as follows Total Cost Quantity Standard Unit Cost Cost Item Direct materials: Cookie mix Milk chocolate Almonds 10 oz. 5 oz. 1 oz $ 0.02 per oz 0.15...