Activity Cost Activity Base Procurement $370,000 Number of purchase orders Scheduling 250,000 Number of production orders Materials handling 500,000 Number of moves Product development 730,000 Number of engineering changes Production 1,500,000 Machine hours Number of Number of Number Number of Number Engineering Machine of Hours Purchase Production of Orders Orders Moves Changes Units Disk drives 4,000 300 1,400 10 2,000 2,000 Tape drives 4,000 150 800 10 8,000 4,000 Wire drives 12,000 800 4,000 25 10,000 2,500

Activity Cost Activity Base Procurement $370,000 Number of purchase orders Scheduling 250,000 Number of production orders Materials handling 500,000 Number of moves Product development 730,000 Number of engineering changes Production 1,500,000 Machine hours Number of Number of Number Number of Number Engineering Machine of Hours Purchase Production of Orders Orders Moves Changes Units Disk drives 4,000 300 1,400 10 2,000 2,000 Tape drives 4,000 150 800 10 8,000 4,000 Wire drives 12,000 800 4,000 25 10,000 2,500

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 2BE: Support department allocations The centralized computer technology department of Hardy Company has...

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Activity Cost Activity Base Procurement $370,000 Number of purchase orders Scheduling 250,000 Number of production orders Materials handling 500,000 Number of moves Product development 730,000 Number of engineering changes Production 1,500,000 Machine hours Number ofPurchaseOrders Number ofProductionOrders NumberofMoves Number ofEngineeringChanges MachineHours NumberofUnits Disk drives 4,000 300 1,400 10 2,000 2,000 Tape drives 4,000 150 800 10 8,000 4,000 Wire drives 12,000 800 4,000 25 10,000 2,500 The activity rate for the scheduling activity cost pool is a.$200.00 per production order b.$20.00 per production order c.$29.41 per production order d.$10.42 per production order
Carbon Company provides the following information about resources. Unused Resources Capacity Cost Driver Volume Resources used Materials $ 2,500 10,000 pounds Energy 5,750 360 machine-hours Setups 0 89 setups Purchasing 4,000 90 purchase orders Customer service 7,900 70 returns Long-term labor 4,150 350 labor-hours Administrative 4,880 440 labor-hours Resources supplied Materials $ 122,500 Energy 21,950 Setups 24,920 Purchasing 26,500 Customer service 20,500 Long-term labor 29,700 Administrative 28,200 Sales revenue for Carbon Company is $590,000. Required: a. Prepare a traditional income statement.b. Prepare an activity-based income statement.
Subject: Cost management & accounting Q.3 Compute Factory Cost:Direct Material = Rs. 50,000Conversion Cost = 150,000Prime Cost = 100,000 Q.4 Compute Factory Cost:Prime Cost = Rs. 250,000Direct Material = 100,000Conversion Cost = 380,000 Q.5 Compute: i) Prime Cost ii) Factory CostMaterial = Rs. 75,000 ( 80% Direct )Labour = 100,000 ( 20 % Indirect )Conversion Cost = 180,000 (Indirect Material and Labour are included)
Carbon Company provides the following information about resources. Unused Resources Capacity Cost Driver Volume Resources used Materials $ 2,100 9,000 pounds Energy 3,490 390 machine-hours Setups 0 81 setups Purchasing 3,700 90 purchase orders Customer service 4,000 90 returns Long-term labor 4,800 340 labor-hours Administrative 8,820 440 labor-hours Resources supplied Materials $ 101,100 Energy 21,430 Setups 24,300 Purchasing 26,200 Customer service 17,500 Long-term labor 30,300 Administrative 31,700 Sales revenue for Carbon Company is $550,000. Required: A. Prepare a traditional income statement. Traditional Income Statement Total costs B. Prepare an activity-based income statement.…
Schedule of Activity Costs Quality Control Activities Activity Cost Product testing $55,000 Assessing vendor quality 26,000 Recalls 18,000 Rework 29,000 Scrap disposal 8,000 Product design 30,000 Training machine operators 46,000 Warranty work 12,000 Process audits 22,000 From the above schedule, calculate the (a) value-added and (b) non-value-added costs.
Q8 Read the following Case and write appropriate answer with calculation related to case A product is manufactured as a result of two processes, A and B. details of process B for the month of august were as follow: Particulars Rs Materials transferred from process A 10,000 kg valued at Rs.40,500 Labor Costs 1,000 hours valued Rs.5.616 Overheads 50% of labor cost Output transferred to finished goods 8000 kg Closing work in progress 900 kg Normal loss is 10% of input and losses do not have scrap value. Closing work in progress is 100% complete for material, and 75% complete for both labor and overheads. i)What is the value of the abnormal loss in Rs? Nil 489 544 546 12. ii) What is the value of the output (finished units) nearest to Rs? Rs.43,977 Rs.39,139 Rs.43,488 Rs.43,680 iiI) What are the equivalent units of production as to material and labor & overheads in August? Material…
ssume the following information: Milling Department Materials Conversion Total Cost of beginning work in process inventory $ 10,000 $ 15,000 $ 25,000 Costs added during the period 291,600 394,500 686,100 Total cost $ 301,600 $ 409,500 $ 711,100 Assume the equivalent units of production for materials and conversion, when using the weighted-average method, are 5,200 units and 5,000 units, respectively. If the equivalent units in ending work in process inventory for materials and conversion are 400 units and 200 units, respectively, then what is the total cost of ending work in process for the Milling Department?
The Baker Company manufactures a product in a single process. The following information isavailable:Input material 5,000 kilos valued at $18,000Material added $4,000Direct labour cost incurred $14,000Manufacturing overhead incurred $20,500Normal losses 10% of inputScrap value of losses $5.00 per unitUnits completed and transferred out 4,300 unitsi) Calculate the cost per completed unitii) What is the value of the units completed and transferred to finished goods?iii) What is the value of the unexpected losses?iv) What is the manufacturer’s true loss?v) Prepare the journal entries necessary to record the assignment of direct materials anddirect labour and the allocation of manufacturing overhead to the process. Also, give thejournal entries for the transfer of units completed to Finished Goods Inventory.
E5-3A Stage Two ABC for Manufacturing: Reassigning Costs to Cost Objectives National Technology, LTD. has developed the following activity cost information for its manufacturing activities: Activity Activity Cost Machine setup $60.00 per batch Movement 15.00 per batch 0.10 per pound Drilling 3.00 per hole Welding 4.00 per inch Shaping 25.00 per hour Assembly 18.00 per hour Inspection 2.00 per unit Filling an order for a batch of 50 fireplace inserts that weighed 100 pounds each required the following: * Four batch moves * Two sets of inspections * Drilling ten holes in each unit * Completing 100 inches of welds on each unit * Forty-five minutes of shaping for each unit * One hour…
Physical Units Transferred-in costs (from Production Dept.) Direct Material Conversion Costs Beginning inventory, WIP (June 1) 90 $105,000 $0 $55,000 % of completion, beginning WIP 100% 0% 60% Transferred-in during June 150 Completed and transferred-out in June 155 Ending inventory, WIP (June 30) ??? % of completion, ending WIP 100% 20% 80% Total costs added during June $205,000 $55,000 $99,000 XYZ Co. operates two departments: Production and Assembly. This exercise focuses on the Assembly department. Direct Materials are added at the end of the process but conversion costs are added evenly during the process. Required: Using FORMULAS, prepare a worksheet to assign total costs to units completed and to units in ending work in process using weighted-average method of process costing. Rules/steps to consider: Prepare first the hand-written assignment Then, work on your Excel spreadsheet
Q7. Suppose a company manufactures and sells a chemical product. The company processes the product in two departments. The March production data for Department B is: Beginning WIP 0 Units started this period 11,000 Units completed and transferred 9,000 Ending WIP units 2,000 Direct materials $1,100 Direct labor $2,880 Applied overhead $8,880 a) Show the physical flow of units. The 2,000 units in ending inventory are 40% complete as to conversion costs. b) Calculate the equivalent units for materials, labor and overhead. Hint: Show both materials and conversion.
E5-4A Stage Two ABC for Manufacturing Assume The Sherwin-Williams Company, a large paint manufacturer, has determined the following activity cost pools and cost driver levels for the latest period: Activity Cost Pool Activity Cost Activity Cost Driver Machine setup $900,000 2,500 setup hours Materials handling 820,000 4,000 materials moves Machine operation 400,000 20,000 machine hours The following data are for the production of singles batches of two products, Mirlite and Subdue: Mirlite Subdue Gallons produced $60,000 25,000 Direct labor hours 400 250 Machine hours 800 250 Direct labor cost $10,000 $7,500 Direct materials cost $360,000 $150,000 Setup hours 15 12 Materials moves…