Amherst Metal Works produces two types of metal lamps. Amherst manufactures 20,000 basic lamps and 5,000 designer lamps. Its activity-based costing system uses two indirect-cost pools. One cost pool is for set up costs and the other for general manufacturing overhead. Amherst allocates setup costs to the two lamps based on setup labor-hours and general manufacturing overhead costs on the basis of direct manufacturing labor-hours. It provides the following budgeted cost information Basic Lamps Designer Lamps Total Direct materials per lamp $ 8 $ 15 Direct manufacturing labor-hours per lamp 0.5 hours 0.6 hours Direct manufacturing labor rate per hour $ 20 $ 20 Setup costs $ 114,000 Lamps produced per batch 250 50 Setup-hours per batch 1 hour 3 hours General manufacturing overhead costs $ 120,000 Calculate the total budgeted costs of the basic and designer lamps using Amherst's activity-based costing system. calculate the overhead rate for general manufacturing overhead. (Abbreviations used: MOH = Manufacturing Overhead. Round your answer to six decimal places, $X.XXXXXX.) calculate the budgeted direct costs of basic and designer lamps if Amherst allocates overhead costs in each department using activity-based costing. Then complete the indirect allocation of costs for the basic and designer lamps. (Use the general manufacturing overhead rate rounded to six decimal places, $X.XXXXXX in any calculations. Round the total amounts to the nearest whole dollar and round all per unit amounts to two decimal places.)

Managerial Accounting

15th Edition

ISBN:9781337912020

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

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

Chapter9: Evaluating Variances From Standard Costs

Section: Chapter Questions

Problem 3E: Salisbury Bottle Company manufactures plastic two-liter bottles for the beverage industry. The cost...

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Amherst Metal Works produces two types of metal lamps.

Amherst manufactures 20,000 basic lamps and 5,000 designer lamps. Its activity-based costing system uses two indirect-cost pools. One cost pool is for set up costs and the other for general manufacturing overhead.

Amherst allocates setup costs to the two lamps based on setup labor-hours and general manufacturing overhead costs on the basis of direct manufacturing labor-hours. It provides the following budgeted cost information

Basic Lamps Designer Lamps Total

Direct materials per lamp $ 8 $ 15
Direct manufacturing labor-hours per lamp 0.5 hours 0.6 hours
Direct manufacturing labor rate per hour $ 20 $ 20
Setup costs $ 114,000
Lamps produced per batch 250 50
Setup-hours per batch 1 hour 3 hours
General manufacturing overhead costs $ 120,000

Calculate the total budgeted costs of the basic and designer lamps using

Amherst's activity-based costing system.

calculate the overhead rate for general manufacturing overhead. (Abbreviations used: MOH = Manufacturing Overhead. Round your answer to six decimal places, $X.XXXXXX.)

calculate the budgeted direct costs of basic and designer lamps if

Amherst allocates overhead costs in each department using activity-based costing. Then complete the indirect allocation of costs for the basic and designer lamps. (Use the general manufacturing overhead rate rounded to six decimal places, $X.XXXXXX in any calculations. Round the total amounts to the nearest whole dollar and round all per unit amounts to two decimal places.)

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