Schedule of Activity Costs Quality Control Activities Activity Cost Process audits $51,400 Training of machine operators 27,000 Processing returned products 19,400 Scrap processing (disposal) 24,100 Rework 7,600 Preventative maintenance 32,000 Product design 40,000 Warranty work 9,000 Finished goods inspection 23,100 From the provided schedule of activity costs, determine the total activity cost. Oa. $102,500 Ob. $233,600 Oc. $151,500 C. Od. $282,656

Schedule of Activity Costs Quality Control Activities Activity Cost Process audits $51,400 Training of machine operators 27,000 Processing returned products 19,400 Scrap processing (disposal) 24,100 Rework 7,600 Preventative maintenance 32,000 Product design 40,000 Warranty work 9,000 Finished goods inspection 23,100 From the provided schedule of activity costs, determine the total activity cost. Oa. $102,500 Ob. $233,600 Oc. $151,500 C. Od. $282,656

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter13: Lean Manufacturing And Activity Analysis

Section: Chapter Questions

Problem 5BE

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Pareto chart and cost of quality report for a manufacturing company The president of Mission Inc. has been concerned about the growth in costs over the last several years. The president asked the controller to perform an activity analysis to gain a better insight into these costs. The activity analysis revealed the following: The production process is complicated by quality problems, requiring the production manager to expedite production and dispose of scrap. Instructions 1. Prepare a Pareto chart of the company activities. 2. Classify the activities into prevention, appraisal, internal failure, external failure, and not costs of quality (producing product). Classify the activities into value-added and non-value-added activities. 3. Use the activity cost information to determine the percentages of total costs that are prevention, appraisal, internal failure, external failure, and not costs of quality. 4. Determine the percentages of total costs that are value-added and non-value-added. 5. Interpret the information.
Refer to Cornerstone Exercise 7.3 and solve for the allocated costs to Fabricating and Assembly using the direct method of support department cost allocation. The Fabricating Department overhead rate is based on normal activity of 82,000 machine hours. The Assembly Department overhead rate is based on normal activity of 160,000 direct labor hours. Job 316 required six machine hours in Fabricating and four direct labor hours in Assembly. Total direct materials cost 120, and total direct labor cost was 80. Required: 1. Calculate the overhead rate for Fabricating based on machine hours and the overhead rate for Assembly based on direct labor hours. (Round overhead rates to the nearest cent.) 2. Using the overhead rates calculated in Requirement 1, calculate the cost of Job 316. 3. What if Job 316 had required one machine hour in Fabricating and four direct labor hours in Assembly? Direct labor and direct materials costs remained the same. Calculate the new cost of Job 316.
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
Schedule of Activity Costs Quality Control Activities Activity Cost Process audits $50,400     Training of machine operators 26,300     Processing returned products 15,700     Scrap processing (disposal) 24,100     Rework 7,500     Preventative maintenance 28,800     Product design 44,900     Warranty work 9,400     Finished goods inspection 22,300     From the provided schedule of activity costs, determine the non-value-added costs. a.$114,500 b.$56,700 c.$229,400 d.$47,300
Schedule of Activity Costs Quality Control Activities Activity Cost Process audits $51,100     Training of machine operators 26,500     Processing returned products 19,300     Scrap processing (disposal) 25,900     Rework 6,500     Preventative maintenance 29,500     Product design 45,700     Warranty work 7,500     Finished goods inspection 23,200     From the provided schedule of activity costs, determine the appraisal costs. a.$176,000 b.$74,300 c.$51,100 d.$119,500
Quality Control Activities Activity Cost Process audits $50,300     Training of machine operators 27,900     Processing returned products 16,700     Scrap processing (disposal) 25,700     Rework 8,400     Preventative maintenance 27,600     Product design 42,100     Warranty work 6,900     Finished goods inspection 22,500     From the provided schedule of activity costs, determine the prevention costs. a. $97,600 b. $114,300 c. $106,000 d. $55,500
Environmental Cost Report Verde Company reported operating costs of $28,000,000 as of December 31, 20x5, with the following environmental costs: Testing for contamination $ 448,000 Inspecting products 448,000 Treating toxic waste 1,316,000 Obtaining ISO 14001 certification 476,000 Designing processes 448,000 Cleaning up oil spills 1,820,000 Maintaining pollution equipment 756,000 Cleaning up contaminated soil 3,024,000 Required: Question Content Area 1. Prepare an environmental cost report, classifying costs by quality category and expressing each as a percentage of total operating costs. Round percentages to two decimal places, if rounding is required. For example, 5.79% would be entered as "5.79". Verde CompanyEnvironmental Cost ReportFor the Year Ended December 31, 20x5 Environmental Cost Total Environmental Cost Percentage of Operating Costs Prevention costs: $- Select - - Select - $- Select - - Select -% Detection costs:…
Requirement 1. Classify each cost as value-added, non-value-added, or in the gray area between. a. Materials and labor for servicing machine tools b. Rework costs c. Expediting costs caused by work delays d. Materials-handling costs e. Materials-procurement and inspection costs f. Preventive maintenance of equipment g. Breakdown maintenance of equipment Requirement 2. For any cost classified in the gray area, assume 96% is value-added and 4% is non-value-added. How much of the total of all seven costs is value-added and how much is non-value-added? Compute the total cost for the value-added and nonvalue-added costs, then compute what percentage of the total is value-added and how much is non-value-added. Total percent Total cost of total costs Value-added % Non-value-added % Total costs Requirement 3.…
Support department cost allocation—reciprocal services method Davis Snowflake & Co. produces Christmas stockings in its Cutting and Sewing departments. The Maintenance and Security departments support the production of the stockings. Costs from the Maintenance Department are allocated based on machine hours, and costs from the Security Department are allocated based on asset value. Information about each department is provided in the following table: MaintenanceDepartment SecurityDepartment CuttingDepartment SewingDepartment Machine hours 800 2,000 6,800 11,200 Asset value $2,000 $1,380 $3,500 $4,500 Department cost $30,240 $13,440 $67,000 $85,000 Determine the total cost of each production department after allocating all support department costs to the production departments using the reciprocal services method. CuttingDepartment SewingDepartment Production departmentsʼ total costs…
All costs incidental to materials procurement and handling until they are issued are charged tothe materials account by Cruz Mfg. Co. at a rate predetermined for each of the departmentsinvolved.For 19C, the estimated departmental costs are given:Purchasing department P175,000Receiving and Inspection Dept. 124,500Materials department 83,000Accounting department (20% isestimated to be related toprocessing of payments formaterials.295,000Purchases for 19C were estimated to amount to P5, 000,000 for more or less 8,300,000units to be ordered 50 times.Actual purchases for 19C amounted to P5, 600,000 for total of 8,000,000 units in 52orders. Costs incurred by the four given departments were as follows:Purchasing department P180,000Receiving and inspectiondepartment128,000Materials department 78,000Accounting department (20% isestimated to be related toprocessing of payments formaterials.290,000Required:a. Compute for the predetermined departmental overhead rates.b. How much is the applied…
Questions 5-10. Classify the mentioned costs using the following letters: to. Preventionb. Evaluationc. Internal failured. External failure 5. Inspect the purchased raw material when it arrives at the factory. 6. Honor a customer's warranty for a defective product 7. Repair defective products before selling them (rework) 8. Cost of damaged units (spoilage) 9. Training of manufacturing employees 10. Maintenance of the manufacturing equipment every three months
Overheads cost analysisRProduction 4 400 000Materials handling 1 000 000Set-up 1 050 000Quality control 1 900 000Materials procurement 400 000Cost driver analysisCost drivers Product A Product B TotalDirect labour hours 320 000 180 000 500 000Number of set-ups 420 280 700Materials movements 700 300 1 000Number of orders 1 300 700 2 000Number of inspections 1 140 760 1 900 Annual outputProduct A 200 000 unitsProduct B 100 000 units Use the information provided below to calculate the overhead cost per product using the followingcosting systems: Traditional Absorption Costing, using direct labour hours as the basis for allocation.…