EXCEL 45. LO.4 (ABC) Outdoor Teos makes umbrellas, gazebox, and chaise lounges. The pany uses a tradicional overhead allocation scheme and assigns overhead to produc the rate of $30 per direct labor hour. The costs per unit for each product i 2013 were as follows Direct material Direct labor Overhead Total Umbrellas $12 18 Quality control Setups Material handling Equipment operation 24 $54 Number of units Number of setupe Pounds of material Number of machine hours Because profitability has been lagging and competition has been getting more inte Outdoor Texas is considering implementing an activity-based conting system for 2054 In analyzing the 2013 daca, management detennined that its $12,000,000 of overhead could be assigned to four basic activities quality control, setups, material dling, and equipment operation. Data for the 2013 costs associated with each of the four activities follow Quality Material Control Setups Handling $630,000 $600,000 $1,800,000 Management determined that the following allocation bases and total 2013 volumes for each allocation base could have been used for ABC Activity Base Number units produced Number of setups Pounds of material used Namber of machine hours Volume measures for 2013 for each product and each allocation base were as follows Gazebos Chaise Lounges 30.000 1,300 Gazebo $120 135 180 $435 Umbrellas 300,000 600 1,200,000 600,000 Chaise Lounges $ 12 45 60 $117 Equipment Operation Total Cost $14,970.000 $18,000,000 3,000,000 1,100,000 90,000 1,100 1,800,000 1,300,000 How much direct labor time is needed to produce an umbrella, gazebo, and a chaise lounge b. For 2013, determine the total overhead allocated to each product group in the traditional allocation based on direct labor hours e. For 2013, determine the total overhead that would have been allocated to each product group if activity-board costing were used. Compute the cost per unit for cach product group. d. Outdoor Texas has a policy of seming sales prices based on product costs. How would the sales prices using activity-based costing differ from those obtained using the traditional overhead allocation!

EXCEL 45. LO.4 (ABC) Outdoor Teos makes umbrellas, gazebox, and chaise lounges. The pany uses a tradicional overhead allocation scheme and assigns overhead to produc the rate of $30 per direct labor hour. The costs per unit for each product i 2013 were as follows Direct material Direct labor Overhead Total Umbrellas $12 18 Quality control Setups Material handling Equipment operation 24 $54 Number of units Number of setupe Pounds of material Number of machine hours Because profitability has been lagging and competition has been getting more inte Outdoor Texas is considering implementing an activity-based conting system for 2054 In analyzing the 2013 daca, management detennined that its $12,000,000 of overhead could be assigned to four basic activities quality control, setups, material dling, and equipment operation. Data for the 2013 costs associated with each of the four activities follow Quality Material Control Setups Handling $630,000 $600,000 $1,800,000 Management determined that the following allocation bases and total 2013 volumes for each allocation base could have been used for ABC Activity Base Number units produced Number of setups Pounds of material used Namber of machine hours Volume measures for 2013 for each product and each allocation base were as follows Gazebos Chaise Lounges 30.000 1,300 Gazebo $120 135 180 $435 Umbrellas 300,000 600 1,200,000 600,000 Chaise Lounges $ 12 45 60 $117 Equipment Operation Total Cost $14,970.000 $18,000,000 3,000,000 1,100,000 90,000 1,100 1,800,000 1,300,000 How much direct labor time is needed to produce an umbrella, gazebo, and a chaise lounge b. For 2013, determine the total overhead allocated to each product group in the traditional allocation based on direct labor hours e. For 2013, determine the total overhead that would have been allocated to each product group if activity-board costing were used. Compute the cost per unit for cach product group. d. Outdoor Texas has a policy of seming sales prices based on product costs. How would the sales prices using activity-based costing differ from those obtained using the traditional overhead allocation!

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter11: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 11.2E: Identify cost graphs The following cost graphs illustrate various types of cost behavior: For each...

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