Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin is $30 per unit and $45 is used in direct labor, while the direct material for the double is s3 per unit, and the labor cost is $50 per unit. Box Springs estimates it will make 5,000 twins and 10,000 doubles in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: Activity Cost Estimated Use per Use per Pools Driver Overhead Twin Double Framing Square Feet of Pine $240,000 5,000 3,000 Padding Square Feet of Quilting 210,000 110,000 100,000 Filling Square Feet of Filing 270,000 S50,000 350,000 Labeling Number of Boxes 125,000 B00,000 450,000 Inspection Number of Inspections 198,000 12,000 6,000 After grouping cost pools and estimating overhead and activities, Box Springs determined these rates: Purchasing (per order) $54 Utilities (per square foot) 2 Machine Setups (per machine hour). Supervision (per direct labor hour) It estimates there will be 5 orders in the next year, and those jobs will involve the following Orders Square Feet 200 Machine Hours 60 Direct Labor Hours 40 Direct Materials $1,400 Direct Labor Rate $30 What is the total cost of the jobs?
Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin is $30 per unit and $45 is used in direct labor, while the direct material for the double is s3 per unit, and the labor cost is $50 per unit. Box Springs estimates it will make 5,000 twins and 10,000 doubles in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: Activity Cost Estimated Use per Use per Pools Driver Overhead Twin Double Framing Square Feet of Pine $240,000 5,000 3,000 Padding Square Feet of Quilting 210,000 110,000 100,000 Filling Square Feet of Filing 270,000 S50,000 350,000 Labeling Number of Boxes 125,000 B00,000 450,000 Inspection Number of Inspections 198,000 12,000 6,000 After grouping cost pools and estimating overhead and activities, Box Springs determined these rates: Purchasing (per order) $54 Utilities (per square foot) 2 Machine Setups (per machine hour). Supervision (per direct labor hour) It estimates there will be 5 orders in the next year, and those jobs will involve the following Orders Square Feet 200 Machine Hours 60 Direct Labor Hours 40 Direct Materials $1,400 Direct Labor Rate $30 What is the total cost of the jobs?
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 6PA: Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin...
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