MANAGERIAL ACCOUNTING F/MGRS.
6th Edition
ISBN: 9781264100590
Author: Noreen
Publisher: RENT MCG
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Chapter 3A, Problem 3A.5P
1.
To determine
Introduction:
To compute: The predetermined overhead rate using direct labor hours as the allocation based and unit product cost of each model.
2.
To determine
Introduction: Job costing is a technique of determine the cost of a manufacturing job rather than the process of the job. Manufacturing overhead is applied to product or job order is determined as predetermined overhead. Absorption costing is used to calculate the cost of product while taking indirect and direct expense into account. Activity based costing assign the cost of all the activity of the organization according to their actual consumption
To compute: The predetermined overhead rate for each four activity cost pools
3.
To determine
Introduction: Job costing is a technique of determine the cost of a manufacturing job rather than the process of the job. Manufacturing overhead is applied to product or job order is determined as predetermined overhead. Absorption costing is used to calculate the cost of product while taking indirect and direct expense into account. Activity based costing assign the cost of all the activity of the organization according to their actual consumption
To compute: Total amount of
4.
To determine
Introduction: Job costing is a technique of determine the cost of a manufacturing job rather than the process of the job. Manufacturing overhead is applied to product or job order is determined as predetermined overhead. Absorption costing is used to calculate the cost of product while taking indirect and direct expense into account. Activity based costing assign the cost of all the activity of the organization according to their actual consumption
The factors that may account for the company’s declining profit.
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Microhard produces tablets, laptops and televisions. Microhard typically sells 1,000 tablets a year. The tablet information is as follows:
Selling price per unit
Direct material cost per unit
Direct labor cost per unit
Total unavoidable allocated overhead
How much would Operating Income decrease if Microhard were to eliminate the tablets?
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Outsourcing
Dough, Re, Mi Inc. sells many different types of cookie dough. The company is deciding whether to continue making its own dough or to outsource. If the company outsources, they will eliminate all of the variable overhead and 25% of the fixed manufacturing overhead, but will incur shipping costs. Use the information below to determine whether Dough, Re, Mi Inc. should outsource or not.
Data
Units
Per unit
Relevant?
Sales price
per unit
5,300
$ 106.00
No
Direct materials
per unit
23.00
?
Direct labor
per unit
18.00
?
Variable manufacturing overhead
per unit
14.00
Yes
Fixed…
ces
Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. All three
products are sold in highly competitive markets, so the company is unable to raise prices without losing an unacceptable number of
customers. Data from the most recent period concerning these products appear below:
Annual sales volume
Unit selling price
Variable expense per unit
Contribution margin per unit
Velero
102,400
$ 1.65
$ 1.25
$ 0.40
Motal
204,800
$ 1.50
$ 0.70
$ 0.80
Nylon
409,600
$ 0.85
$ 0.25
$ 0.60
Total fixed expenses are $409,600 per period. Of the total fixed expenses, $20,000 could be avoided if the Velcro product is dropped,
$80,000 if the Metal product is dropped, and $60,000 if the Nylon product is dropped. The remaining fixed expenses of $249,600
consist of common fixed expenses such as administrative salaries and rent on the factory building that could be avoided only by going
out of business entirely.
The company's managers would…
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