Dawson Company manufactures small table lamps and desk lamps. The following shows the activities per product and the total overhead information:Units Setups Inspections Assembly (dlh)Small table lamps3,8003,7008,25042,400Desk lamps7,8007,40013,75042,400ETTActivityTotal Activity-Base UsageBudgeted Activity CostSetups11,100$108,780Inspections22,000110,000Assembly (dlh)74,200363,580The total factory overhead to be allocated to desk lamps isOa, $488,642Ob, $593,351Oc. $209.418Od. $349,030

In every organization, there are indirect overheads, which are not directly attributable to any…

Units Setups Inspections Assembly (dlh) mall table lamps 3,800 3,700 8,250 42,400 esk lamps 7,800 7,400 13,750 42,400 ctivity etups Total Activity-Base Usage Budgeted Activity Cost 11,100 $108,780 nspections 22,000 110,000 ssembly (dlh) 74,200 363,580 he total factory overhead to be allocated to desk lamps is Pa. $488,642 b. $593,351 c. $209,418 d. $349,030

Units Setups Inspections Assembly (dlh) mall table lamps 3,800 3,700 8,250 42,400 esk lamps 7,800 7,400 13,750 42,400 ctivity etups Total Activity-Base Usage Budgeted Activity Cost 11,100 $108,780 nspections 22,000 110,000 ssembly (dlh) 74,200 363,580 he total factory overhead to be allocated to desk lamps is Pa. $488,642 b. $593,351 c. $209,418 d. $349,030

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 8EB: Rocks Industries has identified three different activities as cost drivers: machine setups, machine...

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Patterson Company produces wafers for integrated circuits. Data for the most recent year are provided: aCalculated using number of dies as the single unit-level driver. bCalculated by multiplying the consumption ratio of each product by the cost of each activity. Required: 1. Using the five most expensive activities, calculate the overhead cost assigned to each product. Assume that the costs of the other activities are assigned in proportion to the cost of the five activities. 2. Calculate the error relative to the fully specified ABC product cost and comment on the outcome. 3. What if activities 1, 2, 5, and 8 each had a cost of 650,000 and the remaining activities had a cost of 50,000? Calculate the cost assigned to Wafer A by a fully specified ABC system and then by an approximately relevant ABC approach. Comment on the implications for the approximately relevant approach.
Lansing. Inc., provided the following data for its two producing departments: Machine hours are used to assign the overhead of the Molding Department, and direct labor hours are used to assign the overhead of the Polishing Department. There are 30,000 units of Form A produced and sold and 50,000 of Form B. Required: 1. Calculate the overhead rates for each department. 2. Using departmental rates, assign overhead to live two products and calculate the overhead cost per unit. How does this compare with the plantwide rate unit cost, using direct labor hours? 3. What if the machine hours in Molding were 1,200 for Form A and 3,800 for Form B and the direct labor hours used in Polishing were 5,000 and 15,000, respectively? Calculate the overhead cost per unit for each product using departmental rates, and compare with the plantwide rate unit costs calculated in Requirement 2. What can you conclude from this outcome?
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