1.
Introduction:
To compute: The cost per minute of the resource supplied in the shipping department, time driven activity rate for all three activities, and the total labor cost consumed by customers L, M, and N.
2.
Introduction: Job costing is a technique of determining the cost of a manufacturing job rather than the process of the job. Manufacturing overhead is applied to product or job order and is determined as predetermined overhead.
To compute: The used capacity in minutes, unused capacity in minutes, unused capacity in the number of employees, impact on expenses of matching capacity with demand.
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Chapter 5A Solutions
MANAGERIAL ACCOUNTING F/MGRS.
- Using the data in P4-2 and Microsoft Excel: 1. Separate the variable and fixed elements. 2. Determine the cost to be charged to the product for the year. 3. Determine the cost to be charged to factory overhead for the year. 4. Determine the plotted data points using Chart Wizard. 5. Determine R2. 6. How do these solutions compare to the solutions in P4-2 and P4-3? 7. What does R2 tell you about this cost model?arrow_forwardActivity-based costing systems: A. use a single predetermined overhead rate based on machine hours instead of on direct labor B. frequently increase the overhead allocation to at least one product while decreasing the overhead allocation to at least one other product C. limit the number of cost pools D. always result in an increase of at least one products selling pricearrow_forwardTo determine the effect of different levels of production on the company’s income, move to cell B7 (Actual production). Change the number in B7 to the different production levels given in the table below. The first level, 100,000, is the current level. What happens to the operating income on both statements as production levels change? Enter the operating incomes in the following table. Does the level of production affect income under either costing method? Explain your findings.arrow_forward
- The management of Hartman Company is trying to determine the amount of each of two products to produce over the coming planning period. The following information concerns labor availability, labor utilization, and product profitability: a. Develop a linear programming model of the Hartman Company problem. Solve the model to determine the optimal production quantities of products 1 and 2. b. In computing the profit contribution per unit, management does not deduct labor costs because they are considered fixed for the upcoming planning period. However, suppose that overtime can be scheduled in some of the departments. Which departments would you recommend scheduling for overtime? How much would you be willing to pay per hour of overtime in each department? c. Suppose that 10, 6, and 8 hours of overtime may be scheduled in departments A, B, and C, respectively. The cost per hour of overtime is 18 in department A, 22.50 in department B, and 12 in department C. Formulate a linear programming model that can be used to determine the optimal production quantities if overtime is made available. What are the optimal production quantities, and what is the revised total contribution to profit? How much overtime do you recommend using in each department? What is the increase in the total contribution to profit if overtime is used?arrow_forward9. Period cost for the month under the variable costing approach is: Your answer 10. Period cost for the month under the absorption costing approach is: Your answerarrow_forwardCharacteristics of Production Process, Cost Measurement Vince Melders, of EcoScape Company, designs and installs custom lawn and garden irrigation systems for homes and businesses throughout the state. Each job is different, requiring different materials and labor for installing the systems. EcoScape estimated the following for the year: Number of direct labor hours 6,720 Direct labor cost $67,200 Overhead cost $50,400 During the year, the following actual amounts were experienced: Number of direct labor hours 6,045 Direct labor incurred $66,495 Overhead incurred $50,500 Required: 1. Should EcoScape use process costing or job-order costing? 2. If EcoScape uses a normal costing system and overhead is applied on the basis of direct labor hours, What is the overhead rate? Round your answer to the nearest cent. per direct labor hourarrow_forward
- Required: 4. Period cost for the month under the variable costing approach is? 5. Period cost for the month under the absorption costing approach is?arrow_forwarda) Explain if using volume-based cost drivers are relevant in the costing systems of 21st-century organisations b) Can an organisation use more than one costing system? Explain with an example. c) Summary information from KL Ltd's job cost sheets show the following information: Job January February March Completed Sold X01 $4 500 $1 500 February Not sold X02 $8200 january february X03 $2520 february march X04 $3200 $1400 April Not sold Required: What are the balances for January, February and March for each of the following for KL Ltd: work in process inventory finished goods inventory and…arrow_forwardA) what is the customer margin under activity based costing when the number of orders increases to 12? B) what is the product margin under the traditional costing system when the number of orders increase to 12?arrow_forward
- /takeAssignment/takeAssignmentMain.do?invoker=Dassignments&takeAssignmentSessionLocator%3Dassignment-take&inprogress%-false ☆ ロ eBook Job Costs Using Activity-Based Costing Heitger Company is a job-order costing firm that uses activity-based costing to apply overhead to jobs. Heitger identified three overhead activities and related drivers. Budgeted information for the year is as follows: Activity Cost Driver Amount of Driver Materials handling $110,700 Number of moves 4,500 Engineering 153,900 Number of change orders 9,000 Other overhead 310,000 Direct labor hours 50,000 Heitger worked on four jobs in July. Data are as follows: Job 13-43 Job 13-44 Job 13-45 Job 13-46 Beginning balance $24,900 $19,800 $2,900 $0 Direct materials $5,800 $9,900 $13,200 $9,500 Direct labor cost $810 $1,080 $1,560 $130 Job 13-43 Job 13-44 Job 13-45 Job 13-46 Number of moves 45 48 33 4 Number of change orders 27 40 23 18 Direct labor hours 810 1,080 1,560 130 By July 31, Jobs 13-43 and 13-44 were completed…arrow_forwardRefer to CASE 2 (Company B), If activity-based costing is used, what would be the activity rate for the Setups activity ?cost pool None of the amounts given a O $50 b O $25 .c O $5 d Oarrow_forwardGarrell Corporation is conducting a time-driven activity-based costing study in its Customer Support Department. The company has provided the following data to aid in that study: Time-driven activity rate (cost per unit of activity) Activity cost pool: Receiving Calls Resolving Issues Settling Disputes Cost Object Data: Number of calls received Number of issues resolved Number of disputes settled Customer P 31 17 1 $5.46 $8.58 $13.26 Customer Q 21 10 Required: Using time-driven activity-based costing, determine the total Customer Support Department cost assigned to cach customer.arrow_forward
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