Bundle: Financial & Managerial Accounting, 13th + CengageNOWv2, 2 terms (12 months) Printed Access Card
13th Edition
ISBN: 9781305618909
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 26, Problem 26.2CP
To determine
Single plant-wide factory overhead rate: The rate at which the factory or manufacturing overheads are allocated to products is referred to as single plant-wide factory overhead rate.
Activity-based costing (ABC) method: The costing method which allocates overheads to the products based on factory overhead rate for each activity or cost object, according to the cost pooled for the cost drivers (allocation base).
To evaluate: The product profitability report of Company BB.
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ABC and CVP Analysis: Multiple Products
Good Scent, Inc., produces two colognes: Rose and Violet. Of the two, Rose is more popular. Data concerning the two products follow:
Rose Violet
Expected sales (in cases)
Selling price per case
Direct labor hours
Machine hours
Direct labor benefits
Machine costs
Receiving department
Packing department
Total costs
Receiving orders
Packing orders
Material cost per case
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$11
The company uses a conventional costing system and assigns overhead costs to products using direct labor hours. Annual overhead costs follow. They are classified as fixed or variable with respect to direct labor hours.
Fixed
*All depreciation
$
51,000 10,200
$81
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9,750
3,500
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Break-even cases of Violet
182,500
$99
214,500
136,500
$533,500
50
96
$50
27
45
$44
$5
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$165,120
218,880
$384,000
Required:
1. Using the conventional approach, compute the number of cases of Rose and the number of cases of Violet that…
ABC and CVP Analysis: Multiple Products
Good Scent, Inc., produces two colognes: Rose and Violet. Of the two, Rose is more popular. Data concerning the two products follow:
Expected sales (in cases)
Selling price per case.
Direct labor hours
Machine hours
Receiving orders
Packing orders
Material cost per case
$49
Direct labor cost per case
$12
The company uses a conventional costing system and assigns overhead costs to products using direct labor hours. Annual overhead costs follow. They are classified as
fixed or variable with respect to direct labor hours.
Fixed
$
Direct labor benefits
Machine costs
Receiving department
Packing department
Total costs
Rose Violet
51,000 10,200
$100
36,750
9,250
52
98
All depreciation
211,000
212,500
149,000
$572 500
$83
6,400
2,700
24
51
$44
$8
Variable.
$215,750
215,750
$431,500
Good Scent, Inc., produces two colognes: Rose and Violet. Of the two, Rose is more popular. Data concerning the two products follow:
Rose Violet
Expected sales (in cases)
Selling price per case
Direct labor hours
Machine hours
Receiving orders
Packing orders
Material cost per case
Direct labor cost per case
$9
The company uses a conventional costing system and assigns overhead costs to products using direct labor hours. Annual overhead costs follow. They are classified as fixed or variable with respect to direct labor hours.
Fixed
Direct labor benefits
Machine costs
Receiving department
Packing department
Total costs
* All depreciation
55,000 11,000
$101
36,650 5,550
10,350 3,200
$
50
-
97
$49
$82
27
53
Variable
$215,220
218,500* 291,180
241,000
126,000
$585,500 $506,400
$42
$6
Required:
1. Using the conventional approach, compute the number of cases of Rose and the number of cases of Violet that must be sold for the company to break even. In your computations, round variable unit cost…
Chapter 26 Solutions
Bundle: Financial & Managerial Accounting, 13th + CengageNOWv2, 2 terms (12 months) Printed Access Card
Ch. 26 - Why would management be concerned about the...Ch. 26 - Why would a manufacturing company with multiple...Ch. 26 - How do the multiple production department and the...Ch. 26 - Under what two conditions would the multiple...Ch. 26 - Prob. 5DQCh. 26 - Prob. 6DQCh. 26 - Prob. 7DQCh. 26 - Under what circumstances might the activity-based...Ch. 26 - Prob. 9DQCh. 26 - Prob. 10DQ
Ch. 26 - Single plantwide factory overhead rate The total...Ch. 26 - Single plantwide factory overhead rate The total...Ch. 26 - Multiple production department factory overhead...Ch. 26 - Multiple production department factory overhead...Ch. 26 - Activity based costing: factory overhead costs The...Ch. 26 - Activity-based costing: factory overhead costs The...Ch. 26 - Activity-based costing: selling and administrative...Ch. 26 - Activity-based costing: selling and administrative...Ch. 26 - Activity-based costing for a service business...Ch. 26 - Activity-based costing for a service business...Ch. 26 - Single plantwide factory overhead rate Nixon...Ch. 26 - Single plantwide factory overhead rate Matts Music...Ch. 26 - Single plantwide factory overhead rate Sally...Ch. 26 - Prob. 26.4EXCh. 26 - Multiple production department factory overhead...Ch. 26 - Single plantwide and multiple production...Ch. 26 - Single plantwide and multiple production...Ch. 26 - Identifying activity bases in an activity-based...Ch. 26 - Product costs using activity rates Nozama.com Inc....Ch. 26 - Prob. 26.10EXCh. 26 - Prob. 26.11EXCh. 26 - Activity cost pools, activity rates, and product...Ch. 26 - Activity-based costing and product cost distortion...Ch. 26 - Multiple production department factory overhead...Ch. 26 - Activity-based costing and product cost distortion...Ch. 26 - Single plantwide rate and activity-based costing...Ch. 26 - Evaluating selling and administrative cost...Ch. 26 - Prob. 26.18EXCh. 26 - Prob. 26.19EXCh. 26 - Activity-based costing for a service company...Ch. 26 - Activity-based costing for a service company...Ch. 26 - Single plantwide factory overhead rate Orange...Ch. 26 - Multiple production department factory overhead...Ch. 26 - Activity-based and department rate product costing...Ch. 26 - Prob. 26.4APRCh. 26 - Prob. 26.5APRCh. 26 - Product costing and decision analysis for a...Ch. 26 - Single plantwide factory overhead rate Spoiled Cow...Ch. 26 - Multiple production department factory overhead...Ch. 26 - Activity-based department rate product costing and...Ch. 26 - Activity-based product costing Sweet Sugar Company...Ch. 26 - Allocating selling and administrative expenses...Ch. 26 - Product costing and decision analysis for a...Ch. 26 - Prob. 26.1CPCh. 26 - Prob. 26.2CPCh. 26 - Activity-based costing for a service company Wells...Ch. 26 - Using a product profitability report to guide...Ch. 26 - Prob. 26.5CPCh. 26 - Prob. 26.6CP
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