MANAGERIAL ACCT.F/MANAGERS>CUSTOM<
4th Edition
ISBN: 9781307090147
Author: Noreen
Publisher: MCG/CREATE
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Chapter 6A, Problem 6A.4E
To determine
Concept introduction:
Activity based costing is a method of allocation of
To calculate: the overhead cost assigned to each of the products.
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Students have asked these similar questions
E9.4 (LO 3), AP Olivander Company’s traditional costing system has accommodated only one pool for MOH to date, allocated based on DL hours. After conversing with the production managers, however, the company’s owners have gained insights on the key activities that generate cost in the plant. The three key activities, and the cost drivers identified for each, are as follows, along with their budgeted costs and usages for the year.
Activity. Budgeted Cost Budgeted Quantity of Cost Driver
Machine setup. $120,000 3,000 production runs
Material moves 80,000 1,600,000 pounds of material moved
Assembly 250,000 40,000 direct labor hours
Total $450,000
Required
a. Calculate the MOH rate under the current traditional costing system with one MOH pool and one cost driver. b. Calculate the activity-based rates using the…
Second-Stage Allocation
Klumper Corporation is a diversified manufacturer of industrial goods. The company’s activity-based costing system contains the following six activity cost pools and activity rates:
Activity data have been supplied for the following two products:
Required:
How much total overhead cost would be assigned to K425 and M67 using the activity-based costing system?
The MNL Manufacturing Corp has two production cycles. Choosing Production cycle A involves P54/unit of materials and choosing Production cycle B involves P60/unit of materials. However whatever production cycle, the fixed cost will amount to P40,000.00.
What is true regarding the above?
A. P40,000 is relevant in production cycle A
B. P56/unit of materials is relevant in production cycle A.
C. P56/unit and P40,000 is relevant in production cycle B
D. P56/unit and P40,000 is relevant in production cycle A
Chapter 6A Solutions
MANAGERIAL ACCT.F/MANAGERS>CUSTOM<
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