Level of Activity Examples of Activity Measures Activity a. Direct labor workers assemble a product . b. Products are designed by engineers c. Equipment is set up .... d. Machines are used to shape and cut materials e. Monthly bills are sent out to regular customers f. Materials are moved from the receiving dock to production lines..... All completed units are inspected for defects Unit Product Batch Unit Customer Batch Unit

Level of Activity Examples of Activity Measures Activity a. Direct labor workers assemble a product . b. Products are designed by engineers c. Equipment is set up .... d. Machines are used to shape and cut materials e. Monthly bills are sent out to regular customers f. Materials are moved from the receiving dock to production lines..... All completed units are inspected for defects Unit Product Batch Unit Customer Batch Unit

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 12EA: Assign each of the following expenses to either the machine setup cost pool or the factory cost...

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Assign each of the following expenses to either the machine setup cost pool or the factory cost pool: A. indirect materials B. inspections C. factory insurance D. machine depreciation E. machine setup (indirect labor) F. machine setup (indirect material)
The following activities are carried out in Greenberry Company, a manufacturer of consumer goods.a. Direct labor workers assemble a product.b. Engineers design a new product.c. A machine is set up to process a batch.d. Numerically controlled machines cut and shape materials.e. The personnel department trains new employees concerning company policies.f. Raw materials are moved from the receiving dock to the production line.g. A random sample of 10 units in each batch is inspected for defects.Required:1. Classify each activity as a unit-level, batch-level, product-level, or facility-level cost.2. Provide at least one example of an allocation base (i.e., activity measure) that could be used to allocatethe cost of each activity listed above.
Required: (a) Compute the equivalent units and cost per equivalent units for direct materials (From Molding &Direct materials added) and conversion costs. (b) Compute the: - cost of the unexpected losses- total cost of the knobs completed and transferred out of the Packaging Department.- cost of ending work in process inventory in the Polishing Department(c) Complete the Work in Process Inventory – Polishing Process T-account, clearly showing the endingbalance. (d) Prepare the journal entries for the:- assignment of direct materials, direct labor incurred and the manufacturing overhead applied to the Polishing Process - cost of the units completed and transferred out to the Packaging Process (e) Given that 30% of the unexpected losses were as a result of pilferage, calculate Fen Furnishings true loss associated with the Polishing Process.
Ethics Case. At Symond Company, production workers in the Painting Department are paid on the basis of productivity. The labor time standard for a unit of production is established through periodic time studies conducted by Douglas Management Consultants. In a time actual time required to complete a specific task by a worker is observed. Allowances are then made for preparation time, rest periods, and cleanup time. Bill Carson is one of several veterans in the Painting Department .Bill is informed by Douglas that he will be used in the time study for the beginning of a new product . The findings will be the basis for establishing the labor time standard of the next 6 months.During the test, Bill deliberately slows his normal work pace in an effort to obtain a labor time standard that will be easy to meet. Because it is a new product, the Douglas representatives who conducted the test is unaware that Bill did not give the test his best effort.
The following activities occur at Greenwich Corporation, a company that manufactures a variety of products.a. Receive raw materials from suppliers.b. Manage parts inventories.c. Do rough milling work on products.d. Interview and process new employees in the personnel department.e. Design new products.f. Perform periodic preventive maintenance on general-use equipment.g. Use the general factory building.h. Issue purchase orders for a job.Required:Classify each of the activities above as either a unit-level, batch-level, product-level, or organization-sustaining activity.
Levels of cost drivers. Each of the following is a potential activity driver. Identify the most likely level of each driver with U for a unit-level driver, B for a batch-level diver and P for a product-level driver. Loads of materials moved Materials cost Pounds of finished product produced Shipments to customers (where no finished goods inventory is maintained Number of part numbers used Machine hours Purchase orders issued (where large materials inventories are maintained Direct costs Pieces inspected (where output is 100% inspected) Pieces inspected (where only the first piece is inspected after each setup)
HELP WITH CORRECT ANSWER AND WORKING Schedule of Activity CostsQuality Control ActivitiesActivity CostProcess audits$48,200Training of machine operators27,000Processing returned products16,700Scrap processing (disposal)25,200Rework8,900Preventative maintenance28,100Product design43,800Warranty work6,900Finished goods inspection23,000 From the above schedule of activity costs, determine the total activity cost. a. $227,800 b. $99,000 c. $275,638 d. $149,700
Activity Levels and Cost Drivers Shroeder Machine Shop has the following activities:a. Machine operationb. Machine setupc. Production schedulingd. Materials receivinge. Research and developmentf. Machine maintenanceg. Product designh. Parts administrationi. Final inspection of a sample of productsj. Materials handlingRequired1. Classify each of the activities as a unit-level, batch-level, product-level, or facility-level activity.2. Identify a potential cost driver for each activity in requirement 1.
Activity Levels and Cost Drivers Shroeder Machine Shop has the following activities: Machine operation Machine setup Production scheduling Materials receiving Research and development Machine maintenance Product design Parts administration Final inspection of a sample of products Materials handling Required Classify each of the activities as a unit-level, batch-level, product-level, or facility-level activity. Identify a potential cost driver for each activity in requirement 1.
For each of the following activities, select the most appropriate cost driver. Each cost driver may be used only once. Activity Cost Driver 1. Pay vendors Answer 2. Evaluate vendors Answer 3. Inspect raw materials Answer 4. Plan for purchases of raw materials Answer 5. Packaging Answer 6. Supervision Answer 7. Employee training Answer 8. Clean tables Answer 9. Machine maintenance Answer 10. Move in-process product from one work station to the next Answer
The charges to Work in Process—Assembly Department for a period, together with information concerning production, are as follows. All direct materials are placed in process at the beginning of production.Work in Process – Assembling DepartmentBalance: 1,600 units, 35% completed $17,440 To finished goods: 29,600 units ?Direct materials: 29,000 units @ 9.50 275,500Direct labor 84,600Factory overhead 39,258Balance: ? units, 45% completed ?Compute the ending units and their value in work in process and the value of goods transferred to finished goods
(a) Prepare a statement of equivalent production to determine the equivalent units for direct materials(From Moulding & Direct Material Added), and conversion costs and the cost per equivalent unit fordirect materials and conversion costs. (b) Calculate the:- Total cost of units completed and transferred to the Spraying Department- Cost of abnormal losses- Cost of ending work-in-process inventory in the Baking Department(c) Prepare Michael Pottery’s Work-In-Process Inventory – Baking Department T-account, clearly showingthe ending balance.