2. Determine the total and per-unit factory overhead costs allocated to each product, using the plantwide overhead rate in (1). Round per unit amounts to the nearest whole cent.ProductSnowboardsTotal Factory Overhead Factory Overhead Per Unit585,000585,000Skis$3. Determine the factory overhead rates under the multiple production department rate method. Assume that indirect labor is associated with the production departments, so that the total factory overhead is $435,000 and $735,000 for theCutting and Finishing departments, respectively. Round per unit amounts to the nearest whole cent.DepartmentCutting Department87 per direct labor hour105 per direct labor hourFinishing Department4. Determine the total and per-unit factory overhead costs allocated to each product, using the multiple production department overhead rates in (3). Round per unit amounts to the nearest whole cent.ProductTotal Factory Overhead Factory Overhead Per UnitSnowboardsActivityProduction ControlMaterials HandlingCutting DepartmentFinishing DepartmentProduction Department RateSkis5. Determine the activity rates, assuming that the indirect labor is associated with activities rather than with the production departments. Round per unit amounts to the nearest whole cent.Activity RateProductSnowboards$$$1171176. Determine the total and per-unit cost assigned to each product under activity-based costing. Round the per unit amounts to the nearest whole cent.Total Activity CostActivity Cost Per Unitper prod. runper moveper dlhper dlhfactory overhead to snowboards and $because snowboards are made inSkis7. Comment on the differences in the per-unit overhead allocated to each product using the single plantwide factory overhead rate method, the multiple production department factory overhead rate method, and activity-based costing.The plantwide overhead method allocates $of overhead to each product, while the multiple production department method allocates $distort the allocation of overhead because theyoverhead to snowboards and $production department methodsto skis. Activity-based costingdirect labor hours in the Finishing Department, which has (lots, representing ato skis. Both the plantwide and multipleaccount for how each product consumes overhead. In contrast, activity-based costing allocates $offor how each product consumes overhead. Snowboards consumeproduction control and materials handling overhead than do skis. This isactivity costs than skis.accurately allocates factory overhead becauseoverhead. In addition, snowboards consumevariety of styles. Thus, snowboards have Allocate overhead using a single plantwide rate, multiple department rates, and activity-based costingDownhill Sports Inc. manufactures two products: snowboards and skis. The factory overhead incurred is as follows:Indirect laborCutting DepartmentFinishing DepartmentTotalThe activity base associated with the two production departments is direct labor hours. The indirect labor can be assigned to two different activities as follows:ActivityProduction controlMaterials handlingTotalSnowboardsSkisTotalBudgetedActivity CostThe activity-base usage quantities and units produced for the two products follow:Required:Number ofProduction Runs450$90,000270,000$360,00050$360,000250,000560,000$1,170,000500Activity BaseNumber of production runsNumber of movesNumber of Direct Labor Hours-MovesCutting2,0003,0005,0005,0002,5007,500Direct Labor Hours-Finishing4,0003,0007,0001. Determine a single plantwide factory overhead rate based upon direct labor hours.Direct labor overhead rate: $ 97.5 per direct labor hourUnitsProduced5,0005,00010,0002. Determine the total and per-unit factory overhead costs allocated to each product, using the plantwide overhead rate in (1). Round per unit amounts to the nearest whole cent.

Factory overhead is the indirect cost incurred in the process of manufacturing. Therefore, it is…

Allocate overhead using a single plantwide rate, multiple department rates, and activity-based costing Downhill Sports Inc. manufactures two products: snowboards and skis. The factory overhead incurred is as follows: Indirect labor Cutting Department Finishing Department Total The activity base associated with the two production departments is direct labor hours. The indirect labor can be assigned to two different activities as follows: Activity Production control Materials handling Total Snowboards Skis Budgeted Activity Cost Total The activity-base usage quantities and units produced for the two products follow: $90,000 270,000 $360,000 Number of Production Runs 450 50 $360,000 250,000 560,000 $1,170,000 500 Activity Base Number of production runs Number of moves Number of Moves 5,000 2,500 7,500 Direct Labor Hours- Cutting 2,000 3,000 5,000 Direct Labor Hours- Finishing 4,000 3,000 7,000 Units Produced 5,000 5,000 10,000

Allocate overhead using a single plantwide rate, multiple department rates, and activity-based costing Downhill Sports Inc. manufactures two products: snowboards and skis. The factory overhead incurred is as follows: Indirect labor Cutting Department Finishing Department Total The activity base associated with the two production departments is direct labor hours. The indirect labor can be assigned to two different activities as follows: Activity Production control Materials handling Total Snowboards Skis Budgeted Activity Cost Total The activity-base usage quantities and units produced for the two products follow: $90,000 270,000 $360,000 Number of Production Runs 450 50 $360,000 250,000 560,000 $1,170,000 500 Activity Base Number of production runs Number of moves Number of Moves 5,000 2,500 7,500 Direct Labor Hours- Cutting 2,000 3,000 5,000 Direct Labor Hours- Finishing 4,000 3,000 7,000 Units Produced 5,000 5,000 10,000

Managerial Accounting

15th Edition

ISBN:9781337912020

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

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

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 3PA: Activity-based and department rate product costing and product cost distortions Black and Blue...

See similar textbooks

Similar questions

The following product costs are available for Kellee Company on the production of eyeglass frames: direct materials, $32,125; direct labor, $23.50; manufacturing overhead, applied at 225% of direct labor cost; selling expenses, $22,225; and administrative expenses, $31,125. The direct labor hours worked for the month are 3,200 hours. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? E. If 6.425 equivalent units are produced, what is the equivalent material cost per unit? F. What is the equivalent conversion cost per unit?
A company calculated the predetermined overhead based on an estimated overhead of $70.000, and the activity for the cost driver was estimated as 2,500 hours. If product A utilized 1,350 hours and product 8 utilized 1,100 hours, what was the total amount of overhead assigned to the products? A. $35000 B. $30.800 C. $37,800 D. $68,600
The management of Gwinnett County Chrome Company, described in Problem 1A, now plans to use the multiple production department factory overhead rate method. The total factory overhead associated with each department is as follows: Instructions 1. Determine the multiple production department factory overhead rates, using direct labor hours for the Stamping Department and machine hours for the Plating Department. 2. Determine the product factory overhead costs, using the multiple production department rates in (1).
Rulers Company is a neon sign company that estimated overhead will be $60,000, consisting of 1,500 machine hours. The cost to make Job 416 is $95 in neon, 15 hours of labor at $13 per hour, and five machine hours. During the month, it incurs $95 in indirect material cost, $130 in administrative labor, $320 in utilities, and $350 in depreciation expense. What is the predetermined overhead rate if machine hours are considered the cost driver? What is the cost of Job 416? What is the overhead incurred during the month?
Steeler Towel Company estimates its overhead to be $250,000. It expects to have 100,000 direct labor hours costing $2,500,000 in labor and utilizing 12,500 machine hours. Calculate the predetermined overhead rate using: A. Direct labor hours B. Direct labor dollars C. Machine hours
Chester Company provided information on overhead for its three producing departments as follows: Overhead is applied on the basis of machine hours in Fabricating and direct labor hours in Assembly and in Finishing. Job #13-198 had total prime cost of 6,700. The job took 40 machine hours in Fabricating, 100 direct labor hours in Assembly, and 20 direct labor hours in Finishing. What is the total cost of Job# 13-198? a. 6,700.00 b. 1,523.20 c. 8,223.20 d. 7,383.20
The following product costs are available for Stellis Company on the production of erasers: direct materials, $22,000; direct labor, $35,000; manufacturing overhead, $17,500; selling expenses, $17,600; and administrative expenses; $13,400. What are the prime costs? What are the conversion costs? What is the total product cost? What is the total period cost? If 13,750 equivalent units are produced, what is the equivalent material cost per unit? If 17,500 equivalent units are produced, what is the equivalent conversion cost per unit?
A company has the following information relating to its production costs: Compute the actual and applied overhead using the companys predetermined overhead rate of $23.92 per machine hour. Was the overhead over applied or under applied, and by how much?
Determining job costcalculation of predetermined rate for applying overhead by direct labor cost and direct labor hour methods Beemer Products Inc. has its factory divided into three departments, with individual factory overhead rates for each department. In each department, all the operations are sufficiently alike for the department to be regarded as a cost center. The estimated monthly factory overhead for the departments is as follows: Forming, 64,000; Shaping, 36,000; and Finishing, 10,080. The estimated production data include the following: The job cost ledger shows the following data for X6, which was completed during the month: Required: Determine the cost of X6. Assume that the factory overhead is applied to production orders, based on the following: 1. Direct labor cost 2. Direct labor hours (Hint: You must first determine overhead rates for each department, rounding rates to the nearest cent.)
Green Bay Cheese Company estimates its overhead to be $375,000. It expects to have 125,000 direct labor hours costing $1,500,000 in labor and utilizing 15,000 machine hours. Calculate the predetermined overhead rate using: A. Direct labor hours B. Direct labor dollars C. Machine hours
Primera Company produces two products and uses a predetermined overhead rate to apply overhead. Primera currently applies overhead using a plantwide rate based on direct labor hours. Consideration is being given to the use of departmental overhead rates where overhead would be applied on the basis of direct labor hours in Department 1 and on the basis of machine hours in Department 2. At the beginning of the year, the following estimates are provided: Actual results reported by department and product during the year are as follows: Required: 1. Compute the plantwide predetermined overhead rate and calculate the overhead assigned to each product. 2. Calculate the predetermined departmental overhead rates and calculate the overhead assigned to each product. 3. Using departmental rates, compute the applied overhead for the year. What is the under- or overapplied overhead for the firm? 4. Prepare the journal entry that disposes of the overhead variance calculated in Requirement 3, assuming it is not material in amount. What additional information would you need if the variance is material to make the appropriate journal entry?
Medical Tape makes two products: Generic and Label. It estimates it will produce 423,694 units of Generic and 652,200 of Label, and the overhead for each of its cost pools is as follows: It has also estimated the activities for each cost driver as follows: How much is the overhead allocated to each unit of Generic and Label?