Company B is currently applying manufacturing overhead based on budgeted direct labor hours.Budgeted direct labor hours for the year is 50,000.The company is thinking of using Activity based Costing system and has identifies four activities. Thefour activities, cost drivers, annual activity level, and expected overhead costs for each activity for theyear are listed below.Annual Cost-DriverExpected MOH ($)400,000ActivityCost DriverActivity LevelMaintenanceMachine hours50,000Materials HandlingSetupsInspectionMaterial moves8,000200,000SetupsQuality inspections6,000300,00020,000100,000Total Budgeted MOH1,000,000Annual estimates for three of the products sold by the company are as follows:Total sales ($)Direct materialsProduct X$200,000$50,000Product Y$200,000$30,000Product Z$200,000$40,000Direct labor cost$45,000$25,500$35,000Direct labor hours4,5002,5503,500Number of materials moves350250300Number of inspectionsNumber of setups35020030015080120Number of machine hours800040006000 ?Refer to CASE 2 (Company B), What is the expected total cost of product Y if traditional cost accounting is used$145,000 .aNone of the amounts given b O$106,500 .c O$185,000 d O

Calculation of Total Expected cost for product Y Amount (In $) Direct Material Cost…

Company B is currently applying manufacturing overhead based on budgeted direct labor hours. Budgeted direct labor hours for the year is 50,000. The company is thinking of using Activity based Costing system and has identifies four activities. The four activities, cost drivers, annual activity level, and expected overhead costs for each activity for the year are listed below. Annual Cost-Driver Activity Level Activity Cost Driver Expected MOH ($) Maintenance Machine hours 50,000 400,000 Materials Handling Material moves 8,000 200,000 300,000 Setups Quality inspections Setups 6,000 Inspection 20,000 100,000 Total Budgeted MOH 1,000,000 Annual estimates for three of the products sold by the company are as follows:

Company B is currently applying manufacturing overhead based on budgeted direct labor hours. Budgeted direct labor hours for the year is 50,000. The company is thinking of using Activity based Costing system and has identifies four activities. The four activities, cost drivers, annual activity level, and expected overhead costs for each activity for the year are listed below. Annual Cost-Driver Activity Level Activity Cost Driver Expected MOH ($) Maintenance Machine hours 50,000 400,000 Materials Handling Material moves 8,000 200,000 300,000 Setups Quality inspections Setups 6,000 Inspection 20,000 100,000 Total Budgeted MOH 1,000,000 Annual estimates for three of the products sold by the company are as follows:

Managerial Accounting

15th Edition

ISBN:9781337912020

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

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

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 5DQ

See similar textbooks

Similar questions

Product cost concept of product pricing Based on the data presented in Exercise 12-15, assume that Willis Products Inc. uses the product cost concept of applying the cost-plus approach to product pricing. a.Determine the total manufacturing costs and the cost amount per unit for the production and sale of 200,000 units. b.Determine the product cost markup percentage per unit. Round to two decimal place. c.Determine the selling price per unit. Round to the nearest dollar.
Garrett Company provided the following information: Common fixed cost totaled 46,000. Garrett allocates common fixed cost to Product 1 and Product 2 on the basis of sales. If Product 2 is dropped, which of the following is true? a. Sales will increase by 300,000. b. Overall operating income will increase by 2,600. c. Overall operating income will decrease by 25,000. d. Overall operating income will not change. e. Common fixed cost will decrease by 27,600.
The following product Costs are available for Haworth Company on the production of chairs: direct materials, $15,500; direct labor, $22.000; manufacturing overhead, $16.500; selling expenses, $6,900; and administrative expenses, $15,200. What are the prime costs? What are the conversion costs? What is the total product cost? What is the total period cost? If 7,750 equivalent units are produced, what is the equivalent material cost per unit? If 22,000 equivalent units are produced, what is the equivalent conversion cost per unit?
What is the conversion cost to manufacture insulated travel cups if the costs are: direct materials, $17,000; direct labor, $33,000; and manufacturing overhead, $70,000? A. $16,000 B. $50,000 C. $103,000 D. $120000
Identify cost graphs The following cost graphs illustrate various types of cost behavior: For each of the following costs, identify the cost graph that best illustrates its cost behavior as the number of units produced increases. a. Direct material cost per unit. b. Fees for using a patent of $500,000 plus $0.25 for each unit produced. c. Salary of quality control supervisor. d. Straight-line depreciation per unit on factory equipment. e. Total direct materials cost.
Choose the correct letter of answer In 20x2 the Cranky Processing Company had the following data coming from its income statement (in Pesos): Sales, P1,200,000; Variable costs: (a) Goods sold, P400,000 and (b) S&A Expenses, P100,000; Fixed costs: (a) Factory overhead, P110,000, and S&A Expenses, P80,000. Income tax rate is 15%. Determine the required peso sales to provide an after-tax net income of P150,000. a. P261,765b. P176,471c. P366,471d. P628,235
Assuming Average cost flow method is used, how much is the ending inventroy and cost of sales, respectively? A. 130,300 and 101,000 B. 101,000 and 130,000 C. 105,000 and 126,300 D. 126,300 and 105,000
A company determined that the marginal cost, C′(x) of producing the xth unit of a product is given by C′(x)=x3−2x. Find the total cost function C, assuming that C(x) is in dollars and that fixed costs are $2000.
Choose the correct letter of answer: The following information relates to ABC Manufacturing: Prime Cost is P 150,000, Direct Labor is P 60,000 and Conversion cost is P 200,000. How much is the total manufacturing cost? a. P 350,000 b. P 260,000 c. P 300,000 d. P 290,000
Assume that the average cost function of a company is described by the following equation: AC = 2 x Q2 - 16Q + 90 At what production quantity, that is at what number of units, is the average cost at a minimum? a) 2 b) 3 c) 4 d) 6 please show calculation and method
8. complete the following table to determine what are the total costs to account for if a company’s beginning inventory had $231,432 in materials, $186,450 in conversion costs, and added direct material costs ($4,231,392), direct labor ($2,313,392), and manufacturing overhead ($1,156,696)? PLEASE NOTE: All dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345). If no dollar amount is needed for that space, please enter "$0" with no quotation marks. Material Costs Conversion Costs Total Costs Beginning work in process ? ? x Added: ? ? x Direct materials ? ? x Direct labor ? ? x Manufacturing overhead ? ? x Total Costs ? ? ?
Company XYZ made total contribution margin of $ 300,000 and a net income of $ 140,000. The company also made a total gross margin of $ 270,000. Assume that the variable selling and administrative expenses were $ 80,000, how much is the fixed manufacturing cost ($)? O a. None of the given answers O b. 160,000 Oc 130,000 O d. 50,000 O e 110,000