BREWER ND LL INTRO MGRL ACTG CON+ AC
19th Edition
ISBN: 9781260711851
Author: BREWER
Publisher: McGraw-Hill Publishing Co.
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Textbook Question
Chapter 4, Problem 3E
Compute ABC Product Costs L04−3
Lamer Corporation is a diversified manufacturer of industrial goods. The company’s activity-based costingsystem contains the following six activity cost pools and activity rates:
Cost and activity data have been supplied for the following products
Compute the unit product cost of each product listed above.
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Chrzan, Incorporated, manufactures and sells two products: Product EO and Product NO. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:
Product E0
Product Ne
Total direct labor-hours
Activity Cost Pools
Labor-related
Production orders
Order size
The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
Estimated
Overhead
Cost
Multiple Choice
$33.94 per MH
$54.20 per MH
Direct
Expected Labor-Hours
Production
Per Unit
10.1
410
1,550
9.1
$51.98 per MH
$21.40 per MH
Activity
Measures
DLHS
orders
MHs
Total
Direct
Labor-
Hours
$ 301,890
61,087
585,366
$948,343
The activity rate for the Order Size activity cost pool under activity-based costing is closest to:
4,141
14, 105
18,246
Product E
4,141
850
5,550
Expected Activity
Product NO
14, 105
950
5,250
Total
18,246
1,800
10,800
what is the labor-related activity cost pool per DLH
what is the machine-related activity cost pool per MH
what is the machine setups activity cost pool per seteup
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what is the product testing activity cost per test
what is the packaging activity cost per package
what is the general factory activity cost per DLH
Classic manufacturing costing system uses a three-part classification of direct materials, direct manufacturing labor, and manufacturing overhead costs. The following items (in millions) pertain to
Classic Corporation.
Requirement
Prepare an income statement and a supporting schedule of cost of goods manufactured.
Begin by preparing the supporting schedule of cost of goods manufactured (in millions). Start with the direct materials and direct labor costs, then indirect manufacturing costs, and complete the schedule by calculating cost of goods manufactured.
For Specific Date
Work-in-process inventory, January 1, 2020
$12
Direct materials inventory, December 31, 2020
8
Finished-goods inventory, December 31, 2020
11
Accounts payable, December 31, 2020
20
Accounts receivable, January 1, 2020
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Finished-goods inventory, January 1, 2020
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Accounts receivable, December 31,…
Chapter 4 Solutions
BREWER ND LL INTRO MGRL ACTG CON+ AC
Ch. 4 - What are the three common approaches for assigning...Ch. 4 - Why does activity-based costing appeal to some...Ch. 4 - Why do departmental overheadrates something result...Ch. 4 - What are the four hierarchical levels of activity...Ch. 4 - Why activity-based costing is described as a...Ch. 4 - Why do overhead costs often shift from high-volume...Ch. 4 - What are the three major ways in which...Ch. 4 - What are the major limitations of activity-based...Ch. 4 - Prob. 1AECh. 4 - Prob. 2AE
Ch. 4 - Change the data in red so that the Data area looks...Ch. 4 - Prob. 1F15Ch. 4 - Prob. 2F15Ch. 4 - Prob. 3F15Ch. 4 - Greenvood Company manufactures two products14,000...Ch. 4 - Prob. 5F15Ch. 4 - Prob. 6F15Ch. 4 - Greenvood Company manufactures two products14,000...Ch. 4 - Prob. 8F15Ch. 4 - Greenwood Company manufactures two products14,000...Ch. 4 - Prob. 10F15Ch. 4 - Prob. 11F15Ch. 4 - Greenwood Company manufactures two products14,000...Ch. 4 - Prob. 13F15Ch. 4 - Prob. 14F15Ch. 4 - Greenwood Company manufactures two products14,000...Ch. 4 - ABC Cost Hierarchy L041 The following activities...Ch. 4 - Compute Activity Rates L042 Rustafson Corporation...Ch. 4 - Compute ABC Product Costs L043 Lamer Corporation...Ch. 4 - Contrast ABC and Conventional Product Costs L044...Ch. 4 - Assigning Overhead to Products in ABC L042, L043...Ch. 4 - Cost Hierarchy and Activity Measures L041 Various...Ch. 4 - Contrast ABC and Conventional Product Costs L042,...Ch. 4 - Prob. 8ECh. 4 - Prob. 9ECh. 4 - Rocky Mountain Corporation makes two types of...Ch. 4 - Contrasting Activity-Based Costing and...Ch. 4 - Contrasting ABC and Conventional Product cost...Ch. 4 - ABC Cost Hierarchy L041 Mitchell Corporation...Ch. 4 - Prob. 14PCh. 4 - Prob. 15PCh. 4 - Contrasting ABC and Conventional Product Costs...Ch. 4 - Contrast Activity-Based Costing and Conventional...Ch. 4 - Adria Company recently implemented an...
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- (i) Select a suitable cost driver for each item of overhead expenses and calculate thecost per unit of cost driver.(ii) Using the concept of Activity Based Costing, compute the factory cost per unit ofeach product.arrow_forwardTrimake Limited makes three main products, using broadly the same production methods and equipment for each. A conventional product costing system is used at present, although an activity-based costing (ABC) system is being considered. Details of the three products for a typical period are: Product X Product Y Product Z Hours per Labour hours 1/2 1½ 1 Costs relating to set-ups Costs relating to machinery Costs relating to materials handling Costs relating to inspection Total production overhead Product X Product Y Product Z unit Total activities for the period: 75 115 480 670 Machine hours 1½ 1 3 Direct labour costs £6 per hour and production overheads are absorbed on a machine hour basis. The rate for the period is £28 per machine hour. Further analysis shows that the total of production overheads can be divided as follows: Number of Number of set-ups (%) 35 movements of materials 12 21 87 120 Materials per unit £ 20 15 30 100% 20 12 25 The following activity volumes are associated…arrow_forwardHow do you compute the operating income for each of the three activitesarrow_forward
- Arial Company has two products: A and B. The company uses activity-based costing. The total cost and activity for each of the company's three activity cost pools are as follows: Total Activity Activity Cost Pool Total Cost Product A Product B Total Activity 1 $ 38,000 800 500 1,300 Activity 2 $ 29,040 780 600 1,380 Activity 3 $ 26,600 900 650 1,550 The activity rate under the activity-based costing system for Activity 3 is:arrow_forwardLysiak Corporation uses an activity based costing system to assign overhead costs to products. In the first stage, two overhead costs--equipment depreciation and supervisory expense-are allocated to three activity cost pools--Machining, Order Filling, and Other--based on resource consumption. Data to perform these allocations appear below: Overhead costs: Equipment depreciation $ 47,000 Supervisory expense $ 6,000 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Machining Order Filling Other Equipment depreciation 0.60 0.10 0.30 Supervisory expense 0.60 0.20 0.20 In the second stage, Machining costs are assigned to products using machine-hours (MHs) and Order Filling costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Activity data for the company's two products follow: Activity: MHs (Machining) Orders (Order Filling) Product C9 6,900 200…arrow_forwardPART A Classify each cost below as being either variable (VC) or fixed (FC) with respect to the number of units produced or sold. Also classify each cost as either a direct material (DM), a direct labour (DL), production overheads (OH) or a selling and administrative (SA) cost. Magnitos Factory produces ice cream. Write your answers in the appropriate columns to show the proper classification of each cost. Cost Cost Classification Behaviour (VC or FC) (DM/DL/OH/SA) 1. Depreciation of delivery van. 2. Cost of milk in making ice-cream. 3. Lubricants for machineries. 4. Wages of operatives in cooling department. 5. Insurance for factory building. 6. Rent of finished goods warehouse. 7. Electricity cost at factory. 8. Salary of receptionist at regional office. 9. Commission paid to salesman. 10. Factory manager's salary.arrow_forward
- D, E , F please,arrow_forwardDoede Corporation uses activity-based costing to compute product margins. In the first stage, the activity-based costing system allocates two overhead accounts-equipment depreciation and supervisory expense-to three activity cost pools-Machining. Order Filing, and Other-based on resource consumption, Data to perform these allocations appear below: Overhead costs: Equipment depreciation Supervisory expense $ 30,000 $ 14,800 Distribution of Resource Consumption Across Activity Cost Pools: Equipment depreciation Supervisory expense Activity: Product W1 Product Me Total Machining Order Filling 0.50 0.50 In the second stage, Machining costs are assigned to products using machine-hours (Ms) and Order Filing costs are assigned to products using the number of orders. The costs in the Other activity cost pool are not assigned to products. Product W1 Product Me Total Activity Cost Pools MHS (Machining) 5,530 17,000 22,530 0.40 0.30 Show Transcribed Text 5,530 17,000 22,530 Orders (Order Filling)…arrow_forwardScarborough Company has two products: C and D. The company usesactivity - based costing. The estimated total cost and expected activity foreach of the company's three activity cost pools are as follows:Expected ActivityActivity Cost Pool Estimated Cost Product C Product D TotalActivity 1 S17, 848 S17, 848 100 800Activity 2 S16,350 618 150 768Activity 3 S22, 185 842 120 962How much of Activity 1 is expected to be allocated to Product C? Multiple Choice S22, 310.00S17, 848.00S15, 617.00S2, 231.00arrow_forward
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