. A local picnic table manufacturer has budgeted these overhead costs - ERROR: "Handling materials" is $33,350 - (note their order as you will use the same order down below): Purchasing $70,000 Handing materials 33,333 Machine setups 70,500 Inspections 25,500 Utilities 45,000 They are considering adapting ABC costing and have estimated the cost drivers for each pool as shown (again, note their order): Cost Driver Activity Orders 700 Material moves 1,334 Machine setups 15,000 Number of inspections 5,000 Square feet 180,000 Recent success has yielded an order for 1,000 tables. Assume direct labor costs per hour of $20. Determine how much the job would cost given the following activities (once more, note their order for the last worksheet): Activity Order (units) 1,000 Direct materials 112,700 Machine hours 15,200 Direct labor hours 5,300 Number of purchase orders 60 Number of material moves 800 Number of machine setups 100 Number of inspections 450 Number of square feet occupied 8,000 Using the following cost driver terms, complete the two worksheets below to: Number of material moves Direct labor Manufacturing overhead Number of purchase orders Number of machine setups Number of inspections Direct materials Square feet occupied PLEASE NOTE: For activity levels, use commas as needed (i.e. 1,234). Activity rates are rounded to two decimal places and shown with "$" and commas as needed (i.e. $1,234.56). All other dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345). (1) calculate the overhead assigned rate (note their order from above): Overhead Cost Items Estimated Overhead Cost Driver Activity Levels Activity Rate Purchasing $70,000 ? ? ? Handling materials $33,350 ? ? ? Machine setups $70,500 ? ? ? Inspections $25,500 ? ? ? Utilities $45,000 ? ? ? (2) calculate the total order cost (again, note their order from above): Activity Cost Drivers Activity Levels Activity Rate Assigned Costs ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Total Order Cost ?

. A local picnic table manufacturer has budgeted these overhead costs - ERROR: "Handling materials" is $33,350 - (note their order as you will use the same order down below): Purchasing $70,000 Handing materials 33,333 Machine setups 70,500 Inspections 25,500 Utilities 45,000 They are considering adapting ABC costing and have estimated the cost drivers for each pool as shown (again, note their order): Cost Driver Activity Orders 700 Material moves 1,334 Machine setups 15,000 Number of inspections 5,000 Square feet 180,000 Recent success has yielded an order for 1,000 tables. Assume direct labor costs per hour of $20. Determine how much the job would cost given the following activities (once more, note their order for the last worksheet): Activity Order (units) 1,000 Direct materials 112,700 Machine hours 15,200 Direct labor hours 5,300 Number of purchase orders 60 Number of material moves 800 Number of machine setups 100 Number of inspections 450 Number of square feet occupied 8,000 Using the following cost driver terms, complete the two worksheets below to: Number of material moves Direct labor Manufacturing overhead Number of purchase orders Number of machine setups Number of inspections Direct materials Square feet occupied PLEASE NOTE: For activity levels, use commas as needed (i.e. 1,234). Activity rates are rounded to two decimal places and shown with "$" and commas as needed (i.e. $1,234.56). All other dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345). (1) calculate the overhead assigned rate (note their order from above): Overhead Cost Items Estimated Overhead Cost Driver Activity Levels Activity Rate Purchasing $70,000 ? ? ? Handling materials $33,350 ? ? ? Machine setups $70,500 ? ? ? Inspections $25,500 ? ? ? Utilities $45,000 ? ? ? (2) calculate the total order cost (again, note their order from above): Activity Cost Drivers Activity Levels Activity Rate Assigned Costs ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Total Order Cost ?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 3PA: A local picnic table manufacturer has budgeted these overhead costs: They are considering adapting...

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2. A local picnic table manufacturer has budgeted these overhead costs - ERROR: "Handling materials" is $33,350 - (note their order as you will use the same order down below):

Purchasing $70,000

Handing materials 33,333

Machine setups 70,500

Inspections 25,500

Utilities 45,000

They are considering adapting ABC costing and have estimated the cost drivers for each pool as shown (again, note their order):

Cost Driver Activity

Orders 700

Material moves 1,334

Machine setups 15,000

Number of inspections 5,000

Square feet 180,000

Recent success has yielded an order for 1,000 tables. Assume direct labor costs per hour of $20. Determine how much the job would cost given the following activities (once more, note their order for the last worksheet):

Activity

Order (units) 1,000

Direct materials 112,700

Machine hours 15,200

Direct labor hours 5,300

Number of purchase orders 60

Number of material moves 800

Number of machine setups 100

Number of inspections 450

Number of square feet occupied 8,000

Using the following cost driver terms, complete the two worksheets below to:

Number of material moves	Direct labor	Manufacturing overhead	Number of purchase orders
Number of machine setups	Number of inspections	Direct materials	Square feet occupied

PLEASE NOTE: For activity levels, use commas as needed (i.e. 1,234). Activity rates are rounded to two decimal places and shown with "$" and commas as needed (i.e. $1,234.56). All other dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345).

(1) calculate the overhead assigned rate (note their order from above):

Overhead Cost Items	Estimated Overhead	Cost Driver	Activity Levels	Activity Rate
Purchasing	$70,000	?	?	?
Handling materials	$33,350	?	?	?
Machine setups	$70,500	?	?	?
Inspections	$25,500	?	?	?
Utilities	$45,000	?	?	?

(2) calculate the total order cost (again, note their order from above):

Activity Cost Drivers	Activity Levels	Activity Rate	Assigned Costs
?			?
?			?
?	?	?	?
?	?	?	?
?	?	?	?
?	?	?	?
?	?	?	?
Total Order Cost			?

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(1) calculate the overhead assigned rate (note their order from above):

Overhead Cost Items	Estimated Overhead	Cost Driver	Activity Levels	Activity Rate
Purchasing	$70,000	?	?	?
Handling materials	$33,350	?	?	?
Machine setups	$70,500	?	?	?
Inspections	$25,500	?	?	?
Utilities	$45,000	?	?	?

(2) calculate the total order cost (again, note their order from above):

Activity Cost Drivers	Activity Levels	Activity Rate	Assigned Costs
?			?
?			?
?	?	?	?
?	?	?	?
?	?	?	?
?	?	?	?
?	?	?	?
Total Order Cost			?

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