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Johnston Corp. manufactures computer desks in its Syracuse. New York, plant. The company uses activity-based costing to allocate all manufacturing conversion costs (direct labor and manufacturing overhead). Its activities and related data follow Click the icon to view the activity areas and related data.) Read the requirements Materials handling Assembling Painting Total manufacturing cost Number of units Manufacturing cost per unit Requirement 2. Premanufacturing activities, such as product design, were assigned to the Standard desks at $5 each and to the Unpainted desks at $3 each. Similar analyses were conducted of post-manufacturing activities such as distribution, marketing, and customer service. The post-manufacturing costs were $20 per Standard and $10 per Unpainted desk Compute the full product costs per desk Standard Desk Unpainted Desk Full product cost per unit Requirement 3. Which product costs are reported in the external financial statements? Which costs are used for management decision making? Explain the difference are reported in the financial statements. Managers use ▼ However, these costs often are Requirement 4. What price should Johnston's managers set for Standard desks to earn a $39 profit per desk? Sales price per unit-standard desk for decisions such as pricing and product emphasis. Full product costs include the that are expensed as incurred for external reporting

Johnston Corp. manufactures computer desks in its Syracuse. New York, plant. The company uses activity-based costing to allocate all manufacturing conversion costs (direct labor and manufacturing overhead). Its activities and related data follow Click the icon to view the activity areas and related data.) Read the requirements Materials handling Assembling Painting Total manufacturing cost Number of units Manufacturing cost per unit Requirement 2. Premanufacturing activities, such as product design, were assigned to the Standard desks at $5 each and to the Unpainted desks at $3 each. Similar analyses were conducted of post-manufacturing activities such as distribution, marketing, and customer service. The post-manufacturing costs were $20 per Standard and $10 per Unpainted desk Compute the full product costs per desk Standard Desk Unpainted Desk Full product cost per unit Requirement 3. Which product costs are reported in the external financial statements? Which costs are used for management decision making? Explain the difference are reported in the financial statements. Managers use ▼ However, these costs often are Requirement 4. What price should Johnston's managers set for Standard desks to earn a $39 profit per desk? Sales price per unit-standard desk for decisions such as pricing and product emphasis. Full product costs include the that are expensed as incurred for external reporting

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 36P: Reducir, Inc., produces two different types of hydraulic cylinders. Reducir produces a major...
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Johnston Corp. manufactures computer desks in its Syracuse, New York, plant. The company uses activity-based costing to allocate all manufacturing conversion costs (direct labor and manufacturing overhead). Its activities and related data follow EEE (Click the icon to view the activity areas and related data.) Read the requirements. Materials handling Assembling Painting Total manufacturing cost Number of units Manufacturing cost per unit Requirement 2. Premanufacturing activities, such as product design, were assigned to the Standard desks at $5 each and to the Unpainted desks at $3 each. Similar analyses were conducted of post-manufacturing activities: has distribution, marketing, and customer service. The post-manufacturing costs were $20 per Standard and $19 per Unpainted desk. Compute the full product costs per desk. Standard Desk Unpainted Desk Full product cost per unit Requirement 3. Which product costs are reported in the external financial statements? Which costs are used for management decision making? Explain the difference. are reported in the financial statements. Managers use However, these costs often are V Requirement 4. What price should Johnston's managers set for Standard desks to earn a $39 profit per desk? Sales price per unit - standard desk ✔for decisions such as pricing and product emphasis. Full product costs include the that are expensed as incurred for external reporting.
Transcribed Image Text:Johnston Corp. manufactures computer desks in its Syracuse, New York, plant. The company uses activity-based costing to allocate all manufacturing conversion costs (direct labor and manufacturing overhead). Its activities and related data follow EEE (Click the icon to view the activity areas and related data.) Read the requirements. Materials handling Assembling Painting Total manufacturing cost Number of units Manufacturing cost per unit Requirement 2. Premanufacturing activities, such as product design, were assigned to the Standard desks at $5 each and to the Unpainted desks at $3 each. Similar analyses were conducted of post-manufacturing activities: has distribution, marketing, and customer service. The post-manufacturing costs were $20 per Standard and $19 per Unpainted desk. Compute the full product costs per desk. Standard Desk Unpainted Desk Full product cost per unit Requirement 3. Which product costs are reported in the external financial statements? Which costs are used for management decision making? Explain the difference. are reported in the financial statements. Managers use However, these costs often are V Requirement 4. What price should Johnston's managers set for Standard desks to earn a $39 profit per desk? Sales price per unit - standard desk ✔for decisions such as pricing and product emphasis. Full product costs include the that are expensed as incurred for external reporting.
Budgeted Cost of Activity Activity Materials handling ... S Assembling .... S Painting S Product Standard desk .. Unpainted desk... 300,000 Number of parts 2,500,000 Direct labor hours Allocation Base $ 0.60 $ 14.00 190,000 Number of painted desks $ 4.90 Johnston produced two styles of desks in March: the Standard desk and Unpainted desk. Data for each follow: Total Units Total Direct Total Number Produced Materials Costs of Parts 114,000 39,900 6,000 $ 2,500 $ Print Done Cost Allocation Rate 121,000 31,000 Total Assembling Direct Labor Hours 6,000 1,000
Transcribed Image Text:Budgeted Cost of Activity Activity Materials handling ... S Assembling .... S Painting S Product Standard desk .. Unpainted desk... 300,000 Number of parts 2,500,000 Direct labor hours Allocation Base $ 0.60 $ 14.00 190,000 Number of painted desks $ 4.90 Johnston produced two styles of desks in March: the Standard desk and Unpainted desk. Data for each follow: Total Units Total Direct Total Number Produced Materials Costs of Parts 114,000 39,900 6,000 $ 2,500 $ Print Done Cost Allocation Rate 121,000 31,000 Total Assembling Direct Labor Hours 6,000 1,000
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