Problem 7A-1 Activity-Based Costing Product Costs for External Reports [LO6] Data concerning Cranur Architects Corporation's two major business lines are given below: Commercial Residential $ 5. 60 $ 37. 50 0. 075 DLHS 392, 000 m2 $ 8.00 Direct materials per square metre Direct labour per square metre Direct labour-hours per square metre Estimated annual output 50 0. 1 DLHS 56, 000 a2 The company has a traditional costing system in which architecture department overhead is applied to units (square metres of architectural drawings) based on direct labour-hours. Data concerning architecture department overhead and direct labour-hours for the upcoming year appear below: Estimated total architecture department overhead Estimated total direct labour-hours $938, 000 35, 000 DLHS Required. 1. Determine the unit costs of the Commercial and Residential products under the company's traditional costing system. (Round your answers to 2 decimal places.) Answer is complete but not entirely correct. Commercial Residential Unit cost 60.048 s 38.84 X

Problem 7A-1 Activity-Based Costing Product Costs for External Reports [LO6] Data concerning Cranur Architects Corporation's two major business lines are given below: Commercial Residential $ 5. 60 $ 37. 50 0. 075 DLHS 392, 000 m2 $ 8.00 Direct materials per square metre Direct labour per square metre Direct labour-hours per square metre Estimated annual output 50 0. 1 DLHS 56, 000 a2 The company has a traditional costing system in which architecture department overhead is applied to units (square metres of architectural drawings) based on direct labour-hours. Data concerning architecture department overhead and direct labour-hours for the upcoming year appear below: Estimated total architecture department overhead Estimated total direct labour-hours $938, 000 35, 000 DLHS Required. 1. Determine the unit costs of the Commercial and Residential products under the company's traditional costing system. (Round your answers to 2 decimal places.) Answer is complete but not entirely correct. Commercial Residential Unit cost 60.048 s 38.84 X

Financial & Managerial Accounting

13th Edition

ISBN:9781285866307

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter26: Cost Allocation And Activity-Based Costing

Section: Chapter Questions

Problem 26.3BPR: Activity-based department rate product costing and product cost distortions Big Sound Inc....

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Cost of quality and value-added/non-value-added reports for a service company A. Using the information in Exercise 17, identify the cost of quality classification for each activity and whether the activity is value-added or non-value-added. B. Prepare a cost of quality report. Assume that sales are 5,000,000. (Round percentages to one decimal place.) C. Prepare a value-added/non-value-added analysis. D. Interpret the information in (D) and (C).
Variable costing income statement and contribution margin analysis for a service company The actual and planned data for Underwater University for the Fall term were as follows: Actual Planned Enrollment 4,500 4,125 Tuition per credit hour 120 135 Credit hours 60,450 43,200 Registration, records, and marketing cost per enrolled student 275 275 Instructional costs per credit hour 64 60 Depreciation on classrooms and equipment 825,600 825,600 Registration, records, and marketing costs vary by the number of enrolled .students, while instructional costs vary by the number of credit hours. Depreciation is a fixed cost. A. Prepare a variable costing income statement showing the contribution margin and income from operations for the Fall term. B. Prepare a contribution margin analysis report comparing planned with actual performance for the Fall term.
Activity-based department rate product costing and product cost distortions Big Sound Inc. manufactures two products: receivers and loud-speakers. The factory overhead incurred is as follows: Indirect labor 400,400 Cutting Department 198,800 Finishing Department 114,800 Total 714,000 The activity base associated with the two production departments is direct labor hours. The indirect labor can be assigned to two different activities as follows: Activity Budgeted Activity Cost Activity Base Setup 138,600 Number of setup Quality Control 261,800 Number of inspections Total 400,400 The activity-base usage quantities and units produced for the two products follow: Number o Setup Number of Inspections Direct Labor HoursSubassembly Direct Labor HoursFinal Assembly Units Produced Snowboards 430 5,000 4,000 2,000 6,000 Skis _70 2,500 2,000 4,000 6,000 Total 500 7,500 6,000 6,000 12,000 Instructions 1. Determine the factory overhead rates under the multiple production department rate method. Assume that indirect labor is associated with the production departments, so that the total factory overhead is 5420,000 and 294,000 for the Subassembly and Final Assembly departments, respectively. 2. Determine the total and per-unit factory overhead costs allocated to each product, using the multiple production department overhead rates in (1). 3. Determine the activity rates, assuming that the indirect labor is associated with activities rather than with the production departments. 4. Determine the total and per-unit cost assigned to each product under activity-based costing. 5. Explain the difference in the per-unit overhead allocated to each product under the multiple production department factory overhead rate and activity-based costing methods.
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Salespersons' report and analysis Pachec Inc. employs seven salespersons to sell and distribute its product throughout the slate. Data taken from reports received from the salespersons during the year ended June 30 are as Follows: Instructions 1. Prepare a table indicating contribution margin, variable cost of goods sold as a percent of sales, variable selling expenses as a percent of sales, and contribution margin ratio by salesperson. 2. Which salesperson generated the highest contribution margin ratio for the year and why? 3. Briefly list factors other than contribution margin that should be considered in evaluating the performance of salespersons.
47. LO.1, LO.3–LO.5 (Activity analysis, ABC; pricing; cost drivers) Moriarity Manufacturing produces two product models: Regular and Special. Th e following information was taken from the accounting records for the fi rst quarter of 2010:Regular Special TotalUnits produced 80,000 20,000 100,000Material cost $320,000 $180,000 $500,000Labor cost $480,000 $140,000 $620,000Moriarity currently uses a traditional cost accounting system where total overhead cost is assigned to products based on the total number of units produced. Company presi-dent Michael Moriarity has approached the controller, Betsy O’Connell, with concerns about sagging profi t margins and his inability to explain competitors’ pricing of similar products. O’Connell suggests that the company explore the possibility of a costing sys-tem that is based less on volume and more on identifying the consumption of resources by products (given manufacturing process activities). O’Connell identifi es the follow-ing overhead costs…
QUESTION 3 (17)Mvete Limited is an established company in the manufacturing industry. The company is manufacturing a very successful product, namely Vete12. The following cost structure is given to you, the newly appointed Trainee Cost Accountant, to advise management on the different levels of production: At the current level of 15 000 units produced and sold:Direct material R20 per unit Direct labour R375 000Indirect material R5 per unit Indirect labour (includes the production supervisors’ salary of R240 000. The remainder is R5.50 per unit R352 500 Other manufacturing overheads (all variable) R12.50 per unit Depreciation charge PPE (production plant and machinery) R375 000Selling and administrative expenses: • Variable selling expenses R10.25 per unit• Fixed selling expenses R5 per unit • Administrative expenses (all fixed) R7 per unit Required a) Calculate at the three (3) different production levels of: • 15 000 units (current level of production)• 20 000 units,• 12 000 units i.…