Direct materialsDirect labor24$ 50 per unitRequired:1. Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools.2. Compute the activity rates for the activity cost pools.3. Calculate the total overhead costs for the order from Shenzhen Enterprises including customer support costs.4. Calculate the customer margin for Shenzhen Enterprises.Complete this question by entering your answers in the tabs below.Required 1Required 2Required 3Required 4Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools.Direct LaborOrderCustomerSupportProcessingSupportOtherTotalsWages and salariesOther overhead costsTotal costRequired 1Required 2 > Exercise 7-15 (Static) Comprehensive Activity-Based Costing Exercise [L07-2, LO7-3, L07-4, LO7-5]Advanced Products Corporation has supplied the following data from its activity-based costing system:Overhead CostsWages and salariesOther overhead costs$ 300,000100,000$ 400,000Total overhead costsTotal Activity forthe YearActivity MeasureNumber of direct labor-hoursActivity Cost PoolSupporting direct laborOrder processingCustomer support20,000 DLHS400 ordersNumber of customer ordersNumber of customers200 customersThis is an organizatiðn-sustaining activityOtherNot applicableDistribution of Resource Consumption Across ActivitiesOrderSupportingCustomerDirect LaborProcessingSupportOtherTotalWages and salariesOther overhead costs40%30%20%10%100%30%10%20%40%100%During the year, Advanced Products completed one order for a new customer, Shenzhen Enterprises. This customer did not order anyother products during the year. Data concerning that order follow:Data Concerning the Shenzhen Enterprises OrderUnits ordered10 unitsDirect labor-hours2 DLHS per unit$ 300 per unit$ 180 per unit$ 50 per unitSelling priceDirect materialsDirect labor

Name: Direct materialsDirect labor24$ 50 per unitRequired:1. Prepare a repo
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Description: Direct materialsDirect labor24$ 50 per unitRequired:1. Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools.2. Compute the activity rates for the activity cost pools.3. Calculate the total overhead costs

Solution:-1 Allocation of overhead costs to activity pools as follows:-

Business

Accounting

Required: 1. Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools. 2. Compute the activity rates for the activity cost pools. 3. Calculate the total overhead costs for the order from Shenzhen Enterprises including customer support costs. 4. Calculate the customer margin for Shenzhen Enterprises. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools. Direct Labor Order Customer Support Processing Support Other Totals Wages and salaries Other overhead costs Total cost

Required: 1. Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools. 2. Compute the activity rates for the activity cost pools. 3. Calculate the total overhead costs for the order from Shenzhen Enterprises including customer support costs. 4. Calculate the customer margin for Shenzhen Enterprises. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Prepare a report showing the first-stage allocations of overhead costs to the activity cost pools. Direct Labor Order Customer Support Processing Support Other Totals Wages and salaries Other overhead costs Total cost

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

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

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

Chapter18: Activity-Based Costing

Section: Chapter Questions

Problem 3ADM: Production run size and activity improvement Littlejohn, Inc. manufactures machined parts for the...

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Activity-based costing in an insurance company Umbrella Insurance Company carries three major lines of insurance: auto, workers' compensation, and homeowners. The company has prepared the following report for 20Y2: Management is concerned that the administrative expenses may make some of the insurance lines unprofitable. However, the administrative expenses have not been allocated to the insurance lines. The controller has suggested that the administrative expenses could be assigned to the insurance lines using activity-based costing. The administrative expenses are comprised of five activities. The activities and their rates are as follows: Activity-base usage data for each line of insurance were retrieved from the corporate records and are shown below. a.Complete the product profitability report through the administrative activities. b.Determine the underwriting income as a percent of premium revenue. C.Determine the Operating income as a percent of premium revenue, rounded to one decimal place. d.Interpret the report.
Refer to the data in Exercise 7.22. The company has decided to simplify its method of allocating support service costs by switching to the direct method. Required: 1. Allocate the costs of the support departments to the producing departments using the direct method. (Round allocation ratios to four significant digits. Round allocated costs to the nearest dollar.) 2. Using direct labor hours, compute departmental overhead rates. (Round to the nearest cent.)
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?
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
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?
Refer to the data in Exercise 7.18. When the capacity of the HR Department was originally established, the normal usage expected for each department was 20,000 direct labor hours. This usage is also the amount of activity planned for the two departments in Year 1 and Year 2. Required: 1. Allocate the costs of the HR Department using the direct method and assuming that the purpose is product costing. 2. Allocate the costs of the HR Department using the direct method and assuming that the purpose is to evaluate performance.
A company calculated the predetermined overhead based on an estimated overhead of $70.000, and the activity for the cost driver was estimated as 2,500 hours. If product A utilized 1,350 hours and product 8 utilized 1,100 hours, what was the total amount of overhead assigned to the products? A. $35000 B. $30.800 C. $37,800 D. $68,600
Exercise 7-15 (Static) Comprehensive Activity-Based Costing Exercise [LO7-2, LO7-3, LO7-4, LO7-5] Advanced Products Corporation has supplied the following data from its activity-based costing system: Overhead CostsWages and salaries$ 300,000Other overhead costs100,000Total overhead costs$ 400,000 Activity Cost PoolActivity MeasureTotal Activity for the YearSupporting direct laborNumber of direct labor-hours20,000DLHs Order processingNumber of customer orders400orders Customer supportNumber of customers200customers OtherThis is an organization- sustaining activityNot applicable Distribution of Resource Consumption Across Activities Supporting Direct LaborOrder ProcessingCustomer SupportOtherTotal Wages and salaries40%30%20%10%100% Other overhead costs30%10%20%40%100% During the year, Advanced Products completed one order for a new customer, Shenzhen Enterprises. This customer did not order any other products during the year. Data concerning that order follow: Data Concerning the…
‏COVID 19 Co uses an activity based costing system with three activity cost pools . The company has provided the following data concerning its costs and its activity based costing system : Costs : $ 273.000 Wages and salaries Depreciation 207.000 199,000 Utilities Total $ 679.000 Distribution of resource consumption Total 100 % Activity Cost Pools Assembly Setting Other Up Wages and salaries 60 20 % 20 % Depreciation 359 20 % 4596 Utilities 20 % 60 % 2096 How much cost , in total , would be allocated in the first stage allocation to the Assembly activity cost pool ? 100 % 100
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…
X Company uses activity-based costing for its product Supreme and Exel. The total estimated annual overhead cost for set up was RO 650,000 and the expected activity was 2500 set ups for the period. If product Exel requires 1500 set ups, the amount of overheads allocated to product Exel for set up cost would be: a. RO 380,000 b. RO 360,000 c. RO 390,000 d. RO 280,000
E7-2A Variable and Absorption Costing--Service Company Lawn RX, Inc. prepares a variable costing income statement for internal management and an absorption costing income statement for its bank. Lawn RX provides a quarterly lawn care service that is sold for $140. The variable and fixed cost data are as follows: Direct labor $ 80 Overhead: Variable cost per unit $ 5 Fixed cost $ 100,000 Marketing, general, and administrative: Variable cost (per contract completed) $ 6 Administrative expense (fixed) (per month) $ 42,000 During 2019, 10,000 service contracts were signed and 9,800 service contracts were completed. Lawn RX had no service contracts at the beginning of the year.…