Prob 3. Mabini company uses a standard cost system for its machine paced production of telephone equipment. Data regarding production during June follow: Variable overhead costs incurred, P155,100 Variable overhead costs applied at P12 per machine hour Fixed overhead cost incurred, P401,000 Fixed overhead budgeted, P390,000 Denominator value in machine hours, 13,000 Standard machine hours allowed per equiv. unit of output, 0.3 Equiv. units of output, 41,000 Actual machine hours used, 13,300 Ending work in process inventory, zero

Prob 3. Mabini company uses a standard cost system for its machine paced production of telephone equipment. Data regarding production during June follow: Variable overhead costs incurred, P155,100 Variable overhead costs applied at P12 per machine hour Fixed overhead cost incurred, P401,000 Fixed overhead budgeted, P390,000 Denominator value in machine hours, 13,000 Standard machine hours allowed per equiv. unit of output, 0.3 Equiv. units of output, 41,000 Actual machine hours used, 13,300 Ending work in process inventory, zero

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Description: Prob 3. Mabini company uses a standard cost system for its machine paced production oftelephone equipment. Data regarding production during June follow:Variable overhead costs incurred, P155,100Variable overhead costs applied at P12 per machine hour

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 30E: Natur-Gro, Inc., manufactures composters. Based on past experience, Natur-Gro has found that its...

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The following product costs are available for Kellee Company on the production of eyeglass frames: direct materials, $32,125; direct labor, $23.50; manufacturing overhead, applied at 225% of direct labor cost; selling expenses, $22,225; and administrative expenses, $31,125. The direct labor hours worked for the month are 3,200 hours. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? E. If 6.425 equivalent units are produced, what is the equivalent material cost per unit? F. What is the equivalent conversion cost per unit?
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.
Production run size and activity improvement Littlejohn, Inc. manufactures machined parts for the automotive industry. The activity cost associated with Part XX-10 is as follows: Activity Activity-Base Usage Activity Rate = Activity Cost Fabrication 250 dlh 80per dlh 20,000 Setup 10 setups 80 per setup 800 Production control 10 prod, runs 30 per prod, run 300 Moving 10 moves 25 per move 250 Total activity cost per unit 21,350 Estimated units of production 500 Activity cost per unit 42.70 Each unit requires 30 minutes of fabrication direct labor. Moreover, part XX-10 is manufactured in production run sizes of 50 units. Each production run is set up, scheduled (production control), and moved as a batch of 50 units. Management is considering improvements in the setup, production control, and moving activities in order to cut the production run sizes by half. As a result, the number of setups, production runs, and mows will double from 10 to 20. Such improvements are expected to speed the companys ability to respond to customer orders. Setup is reengineered so that it takes 60% of the original cost per setup. Production control software will allow production control effort and cost per production run to decline by 60%. Moving distance was reduced by 40%, thus reducing the cost per mow by the same amount. A. Determine the revised activity cost per unit under the proposed changes. B. Did these improvements reduce the activity cost per unit? C. What cost per unit for setup would be required for the solution in (A) to equal the base solution?
During the week of August 21, Parley Manufacturing produced and shipped 4,000 units of its machine tools: 1,500 units of Tool SK1 and 2,500 units of Tool SK3. The cycle time for SK1 is 0.73 hour, and the cycle time for SK3 is 0.56 hour. The following costs were incurred: Required: 1. Assume that the value-stream costs and total units shipped apply only to one model (a single-product value stream). Calculate the unit cost, and comment on its accuracy. 2. Assume that Tool SK1 is responsible for 60% of the materials cost. Calculate the unit cost for Tool SK 1 and Tool SK3, and comment on its accuracy. Explain the rationale for using units shipped instead of units produced in the calculation. 3. Calculate the unit cost for the two models, using DBC. Explain when and why this cost is more accurate than the unit cost calculated in Requirement 2.
A company estimates its manufacturing overhead will be $750,000 for the next year. What is the predetermined overhead rate given the following independent allocation bases? Budgeted direct labor hours: 60,000 Budgeted direct labor expense: $1,500,000 Estimated machine hours: 100,000
Event Forms expects $120,000 in overhead during the next year. It doesn't know whether it should apply overhead on the basis of its anticipated direct labor hours of 6,000 or its expected machine hours of 5,000. What would be the product cost under each predetermined allocation rate if the last job incurred $3,500 in direct material cost, 55 direct labor hours, and 55 machine hours? Wages are paid at $17 per hour.
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Natur-Gro, Inc., manufactures composters. Based on past experience, Natur-Gro has found that its total annual overhead costs can be represented by the following formula: Overhead cost = 264,000 + 1.42X, where X equals number of composters. Last year, Natur-Gro produced 30,000 composters. Actual overhead costs for the year were as expected. Total overhead for per unit was a. 1.42 b. 8.80 c. 11.63 d. 10.22
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SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that its total annual overhead costs can be represented by the following formula: Overhead cost = 543,000 + 1.34X, where X equals number of smokers. Last year, SmokeCity produced 20,000 smokers. Actual overhead costs for the year were as expected. Required: 1. What is the driver for the overhead activity? 2. What is the total overhead cost incurred by SmokeCity last year? 3. What is the total fixed overhead cost incurred by SmokeCity last year? 4. What is the total variable overhead cost incurred by SmokeCity last year? 5. What is the overhead cost per unit produced? 6. What is the fixed overhead cost per unit? 7. What is the variable overhead cost per unit? 8. Recalculate Requirements 5, 6, and 7 for the following levels of production: (a) 19,500 units and (b) 21,600 units. (Round your answers to the nearest cent.) Explain this outcome.
P6-4A High-Low and Cost Formula Harrison Company has accumulated the following total manufacturing overhead costs for two levels of activity (within the relevant range): Low High Activity (direct labor hours) 90,000 130,000 Total manufacturing overhead $484,000 $628,000 The total overhead cost includes variable, fixed, and mixed costs. At 130,000 direct labor hours, the total cost breakdown is as follows: Variable cost $286,000 Fixed cost 85,000 Semi-mixed cost $257,000 Required a. Using the high-low method of cost analysis, determine the variable portion of the semi-variable cost per direct labor hour. Determine the total fixed cost…
Use the following information for the Exercise below. (Algo) Skip to question [The following information applies to the questions displayed below.]Barnes Company reports the following for its product for its first year of operations. Direct materials $ 34 per unit Direct labor $ 24 per unit Variable overhead $ 12 per unit Fixed overhead $ 54,000 per year Variable selling and administrative expenses $ 2 per unit Fixed selling and administrative expenses $ 26,000 per year Exercise 19-4 (Algo) Computing cost per unit at different production levels LO P1, P2 P1. Compute total product cost per unit using absorption costing for the following production levels: (a) 3,000 units, (b) 3,600 units, and (c) 4,500 units. P2. The company sells its product for $140 per unit. Compute contribution margin using variable costing assuming the company (a) produces and sells 3,000 units and (b) produces 3,600 units and sells 3,000 units.