EBK CORNERSTONES OF COST MANAGEMENT
3rd Edition
ISBN: 9781305147102
Author: MOWEN
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Textbook Question
Chapter 4, Problem 5CE
Roberts Company produces two weed eaters: basic and advanced. The company has four activities: machining, engineering, receiving, and inspection. Information on these activities and their drivers is given below.
Overhead costs:
Required:
- 1. Calculate the four activity rates.
- 2. Calculate the unit costs using activity rates. Also, calculate the overhead cost per unit.
- 3. What if consumption ratios instead of activity rates were used to assign costs instead of activity rates? Show the cost assignment for the inspection activity.
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11. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product Y and Product Z?
12. Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z?
13. Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z?
14. Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z?
15. Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z?
The current cost accounting system charges overhead to products based on machine-hours. What unit product costs will be reported for the two products if the current cost system continues to be used? (Round intermediate calculations and "Per unit cost" answers to 2 decimal places.)
308
510
Total cost
Per unit cost
A consulting firm has recommended using an activity-based costing system, with the activities based on the cost pools identified by the cost accountant. What are the cost driver rates for the four cost pools identified by the cost accountant? (Round your answers to 2 decimal places.)
Incoming inspection
% of material dollars
Production
per machine-hour
Machine setup
per setup
Shipping
per unit
What unit product costs will be reported for the two products if the ABC system suggested by the cost accountant’s classification of…
Precision Manufacturing Inc. (PMI) makes two types of industrial component parts-the EX300 and the TX500. It annually produces
69,000 units of EX300 and 13,400 units of TX500. The company's conventional cost system allocates manufacturing overhead to
products using a plantwide overhead rate and direct labor dollars as the allocation base. Additional information relating to the
company's two product lines is shown below:
EX300
$375,325
$129,000
Total
$546,875
$176,000
TX500
Direct materials
Direct labor
$171,550
$ 47,000
The company is considering implementing an activity-based costing system that distributes all of its manufacturing overhead to four
activities as shown below:
Activity
Manufacturing
Overhead
$182,600
249,900
187,070
84,460
$704,000
Activity Cost Pool
(and Activity Measure)
Machining (machine-hours)
Setups (setup hours)
Product-level (number of products)
General factory (direct labor dollars)
EX300
99,000
120
1
TX500
67,000
390
1
Total
166,000
510
2
$129,000
$47,000…
Chapter 4 Solutions
EBK CORNERSTONES OF COST MANAGEMENT
Ch. 4 - What is a predetermined overhead rate? Explain why...Ch. 4 - Describe what is meant by under- and overapplied...Ch. 4 - Explain how a plantwide overhead rate, using a...Ch. 4 - What are non-unit-related overhead activities?...Ch. 4 - What is an overhead consumption ratio?Ch. 4 - Overhead costs are the source of product cost...Ch. 4 - What is activity-based product costing?Ch. 4 - What are the six steps that define the design of...Ch. 4 - Explain how the cost of resources is assigned to...Ch. 4 - Prob. 10DQ
Ch. 4 - Identify and define two types of activity drivers.Ch. 4 - What are unit-level activities? Batch-level...Ch. 4 - Prob. 13DQCh. 4 - Prob. 14DQCh. 4 - Prob. 15DQCh. 4 - Prob. 1CECh. 4 - Warner Company has the following data for the past...Ch. 4 - Lansing. Inc., provided the following data for its...Ch. 4 - Larsen, Inc., produces two types of electronic...Ch. 4 - Roberts Company produces two weed eaters: basic...Ch. 4 - Golding Bank provided the following data about its...Ch. 4 - Golding Bank provided the following data about its...Ch. 4 - Patterson Company produces wafers for integrated...Ch. 4 - Selected activities and other information are...Ch. 4 - Ripley, Inc., costs products using a normal...Ch. 4 - Predetermined Overhead Rate, Application of...Ch. 4 - Craig Company uses a predetermined overhead rate...Ch. 4 - Departmental Overhead Rates Mariposa, Inc.,...Ch. 4 - McCourt Company produces two types of leather...Ch. 4 - Deoro Company has identified the following...Ch. 4 - Prob. 16ECh. 4 - Secondary Activities Refer to the interview in...Ch. 4 - Bob Randall, cost accounting manager for Hemple...Ch. 4 - Prob. 19ECh. 4 - Bob Randall, cost accounting manager for Hemple...Ch. 4 - Silven Company has identified the following...Ch. 4 - Prob. 22ECh. 4 - Prob. 23ECh. 4 - Prob. 24ECh. 4 - Prob. 25ECh. 4 - Assume that the inspection activity has an...Ch. 4 - Consider the information given on two products and...Ch. 4 - Primera Company produces two products and uses a...Ch. 4 - Fisico Company produces exercise bikes. One of its...Ch. 4 - Prob. 30PCh. 4 - Glencoe First National Bank operated for years...Ch. 4 - Autotech Manufacturing is engaged in the...Ch. 4 - The Bienestar Cardiology Clinic has two major...Ch. 4 - Reducir, Inc., produces two different types of...Ch. 4 - Prob. 35PCh. 4 - Escuha Company produces two type of calculators:...
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