MANAGERIAL ACCT.F/MANAGERS>CUSTOM<
4th Edition
ISBN: 9781307090147
Author: Noreen
Publisher: MCG/CREATE
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Chapter 4A, Problem 4A.3E
1.
To determine
Introduction:
To compute: The unit products cost for D and S products using the company’s traditional costing system.
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 unit products cost for two products using activity based costing system.
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Activity-Based Costing and Conventional Costs ComparedHickory Grill Company manufactures two types of cooking grills: the Gas Cooker and the Charcoal Smoker. The Cooker is a premium product sold in upscale outdoor shops; the Smoker is sold in major discount stores. Following is information pertaining to the manufacturing costs for the current month.
Gas Cooker
Charcoal Smoker
Units
1,000
5,000
Number of batches
50
10
Number of batch moves
80
20
Direct materials
$90,000
$150,000
Direct labor
$20,000
$25,000
Manufacturing overhead follows:
Activity
Cost
Cost Driver
Materials acquisition and inspection
$80,800
Amount of direct materials cost
Materials movement
16,200
Number of batch moves
Scheduling
36,000
Number of batches
$133,000
a. Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming all manufacturing overhead is assigned on the basis of direct labor dollars.Round…
Functional-Based versus Activity-Based Costing
For years, Tamarindo Company produced only one product: backpacks. Recently, Tamarindo added a line of duffel bags. With this addition, the company began assigning overhead costs by using departmental rates. (Prior to this, the company used a predetermined plantwide rate based on units produced.) Surprisingly, after the addition of the duffel-bag line and the switch to departmental rates, the costs to produce the backpacks increased, and their profitability dropped.
Josie, the marketing manager, and Steve, the production manager, both complained about the increase in the production cost of backpacks. Josie was concerned because the increase in unit costs led to pressure to increase the unit price of backpacks. She was resisting this pressure because she was certain that the increase would harm the company's market share. Steve was receiving pressure to cut costs also, yet he was convinced that nothing different was being done in the way…
Functional-Based versus Activity-Based Costing
For years, Tamarindo Company produced only one product: backpacks. Recently, Tamarindo added a line of duffel bags. With this addition, the company began assigning overhead costs by using departmental rates. (Prior to this, the company used a predetermined plantwide rate based on units produced.) Surprisingly, after the addition of the duffel-bag line and the switch to departmental rates, the costs to produce the backpacks increased, and their profitability dropped.
Josie, the marketing manager, and Steve, the production manager, both complained about the increase in the production cost of backpacks. Josie was concerned because the increase in unit costs led to pressure to increase the unit price of backpacks. She was resisting this pressure because she was certain that the increase would harm the company's market share. Steve was receiving pressure to cut costs also, yet he was convinced that nothing different was being done in the way…
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