Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781119034681
Author: Weygandt
Publisher: WILEY
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Textbook Question
Chapter 4, Problem 4.7BE
Spud, Inc. a manufacturer of gourmet potato chips, employs activity-based costing. The budgeted data for each of the activity cost pools is provided below for the year 2017.
Activity Cost Pools | Estimated Overhead | Expected Use of Cost Drivers per Activity |
Ordering and receiving | $84,000 | 12,000 orders |
Food processing | 480,000 | 60,000 machine hours |
Packaging | 1,760,000 | 440,000 labor hours |
For 2017, the company had 11,000 orders and used 50,000 machine hours, and labor hours totaled 500,000. What is the total overhead applied?
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Hollins, Inc., a manufacture of computer chips, employs activity-based costing. The budgeted data for each of the activity cost pools is provided below for the year 2014.
Activity Cost Pools
Estimated Overhead
Expected use of Cost Drivers per Activity
Ordering and receiving
Etching
Soldering
$90,000
480,000
1,760,000
12,000 orders
60,000 machine hours
440,000 labor hours
For 2014, the company had 11,000 orders and used 50,000 machine hours, and labor hours totaled 500,000.    Required: What is the total overhead applied?
Spud, Inc. a manufacturer of gourmet potato chips, employs activity-based costing. The budgeted data for each of the activity cost pools is provided below for the year 2017.
Estimated
Overhead
Expected Use of
Cost Drivers per Activity
Activity Cost Pools
Ordering and receiving
$73,800
12,000 orders
Food processing
420,750
55,000 machine hours
Packaging
1,365,000
420,000 labor hours
For 2017, the company had 10,000 orders and used 48,000 machine hours, and labor hours totaled 490,000.
Calculate the overhead rates for each activity. (Round answers to 2 decimal places, e.g. 12.25.)
Overhead Rates
Ordering and receiving
per order
%24
Food processing
per machine hour
2$
Packaging
per labor hour
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What is the total overhead applied?
Total overhead applied
Bumblebee Company estimates that 402,100 direct labor hours will be worked during the coming year, 2020, in the Packaging Department. On this basis, the following budgeted manufacturing overhead cost data are computed for the year.
Fixed Overhead Costs
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Variable Overhead Costs
Supervision
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$91,800
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Indirect labor
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$184,966
Depreciation
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69,960
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Indirect materials
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104,546
Insurance
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32,040
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Repairs
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64,336
Rent
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22,560
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Utilities
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60,315
Property taxes
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22,680
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Lubricants
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40,210
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$239,040
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$454,373
It is estimated that direct labor hours worked each month will range from 20,400 to 30,000 hours.During October, 20,400 direct labor hours were worked and the following overhead costs were incurred.Fixed overhead costs: Supervision $7,650, Depreciation $5,830, Insurance $2,615, Rent $1,880, and Property taxes $1,890.Variable overhead costs: Indirect labor $10,484, Indirect materials, $4,874, Repairs $3,214, Utilities…
Chapter 4 Solutions
Managerial Accounting: Tools for Business Decision Making
Ch. 4 - Under what conditions is direct labor a valid...Ch. 4 - What has happened in recent industrial history to...Ch. 4 - In an automated manufacturing environment, what...Ch. 4 - What is generally true about overhead allocation...Ch. 4 - What are the principal differences between...Ch. 4 - What is the formula for computing activity-based...Ch. 4 - What steps are involved in developing an activity-...Ch. 4 - Prob. 8QCh. 4 - What is an activity cost pool?Ch. 4 - Prob. 10Q
Ch. 4 - Prob. 11QCh. 4 - What is the formula for assigning activity cost...Ch. 4 - What are the benefits of activity-based costing?Ch. 4 - What are the limitations of activity-based...Ch. 4 - Under what conditions is ABC generally the...Ch. 4 - Prob. 16QCh. 4 - Prob. 17QCh. 4 - Prob. 18QCh. 4 - Prob. 19QCh. 4 - Prob. 20QCh. 4 - Prob. 4.1BECh. 4 - Finney Inc. has conducted an analysis of overhead...Ch. 4 - Splash Co. identifies the following activities...Ch. 4 - Mason Company manufactures four products in a...Ch. 4 - Morgana Company identifies three activities in its...Ch. 4 - Weisman, Inc. uses activity-based costing as the...Ch. 4 - Spud, Inc. a manufacturer of gourmet potato chips,...Ch. 4 - Prob. 4.8BECh. 4 - Pine and Danner is an architectural firm that is...Ch. 4 - Prob. 4.10BECh. 4 - Fixlt, Inc. operates 20 injection molding machines...Ch. 4 - Prob. 4.12BECh. 4 - Indicate whether the following statements are true...Ch. 4 - Compute activity-based overhead rates and assign...Ch. 4 - Adamson Company manufactures four lines of garden...Ch. 4 - Ready Ride is a trucking company. It provides...Ch. 4 - Saddle Inc. has two types of handbags: standard...Ch. 4 - Ayala Inc. has conducted the following analysis...Ch. 4 - EcoFabrics has budgeted overhead costs of 945,000....Ch. 4 - Altex Inc. manufactures two products: car wheels...Ch. 4 - Perdon Corporation manufactures safeslarge mobile...Ch. 4 - Santana Corporation manufactures snowmobiles in...Ch. 4 - Rojas Vineyards in Oakville, California, produces...Ch. 4 - Wilmington, Inc. manufactures five models of...Ch. 4 - Air United, Inc. manufactures two products:...Ch. 4 - Kragan Clothing Company manufactures its own...Ch. 4 - Health 'R Us, Inc., uses a traditional product...Ch. 4 - Santana Corporation manufactures snowmobiles in...Ch. 4 - William Mendel Sons, Inc. is a small...Ch. 4 - Venus Creations sells window treatments (shades,...Ch. 4 - Snap Prints Company is a small printing and...Ch. 4 - Lasso and Markowitz is a law firm that is...Ch. 4 - Manzeck Company operates a snow-removal service....Ch. 4 - Combat Fire, Inc. manufactures steel cylinders and...Ch. 4 - Prob. 4.2APCh. 4 - Shaker Stairs Co. designs and builds factory-made...Ch. 4 - Prob. 4.4APCh. 4 - Lewis and Stark is a public accounting firm that...Ch. 4 - CURRENT DESIGNS As you teamed in the previous...Ch. 4 - Prob. 4.1BYPCh. 4 - Prob. 4.2BYPCh. 4 - Curtis Rich, the cost accountant for Hi-Power...Ch. 4 - As discussed in the chapter, the principles...
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