Managerial Accounting
16th Edition
ISBN: 9781259995484
Author: Ray Garrison
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 7.A, Problem 3E
EXERCISE 7A-3 Time-Driven Activity-Based Costing LO 7-6, LO 7-7
Refer to the data in Exercises 7A-1 and 7A-2. Now assume that Saratoga Company would like to answer the following “what if’ question using its time-driven activity-based costing system: Assuming our estimated activity demands for all jobs in the next period will be as shown below, how will this affect our
Required:
- How will these revised activity demands affect the total Purchasing Department labor costs assigned to Job X, Job Y, and Job Z? No calculations are necessary
- Using the revised activity demands, calculate Saratoga's used capacity in minutes.
- Using the revised activity demands, calculate Saratoga's unused capacity in minutes.
- Using the revised activity demands, calculate Saratoga’s unused capacity in number of employees. (Do not round your answer to a whole number.)
- Based on the revised activity demands, calculate the impact on expenses of matching capacity with demand. (Be sure to round your potential adjustment in the number of employees to a whole number.)
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Students have asked these similar questions
Last question 4)
The company uses normal costing with two direct-cost categories:
Direct materials
Direct manufacturing labor
Furthermore, the company uses two manufacturing overhead cost pools:
Machining department with machine- hours as the allocation base
Assembly department with direct manufacturing labor costs as the allocation base.
The budget for the plant in 2020 is as follows:
Production plant
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12 271 500
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1 455 000
6 075 000
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55 500
What is the budgeted manufacturing overhead rate in the machining and the assembly department?
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Calculation of budgeted manufacturing overhead rate in machine department:
Budgeted manufacturing…
Question 3 Part I Advent Corporation has implemented an Activity Based Costing System. The company wants to useABC on its two main products, V1 and V2, and three main activities as follows:ActivityCost Driver Overhead Amount Total Driver VolumeIssuing Purchase Orders # of Purchase Orders $ 150,000 50,000Reviewing Receiving Reports # of Receiving Reports $ 175,000 20,000Making Phone Calls # of Phone Calls $ 450,000 100,000During the year:Product V1 required 150 purchase orders; 150 receiving reports; and 200 phone calls.Product V2 required100 purchase orders; 400 receiving reports; and 350 phone calls.
Required:a. Compute the pre-determined overhead rate for each cost pool. b. Compute the total manufacturing overhead cost for Product V1 and Product V2.
INTEGRATION EXERCISE 4 Plantwide and Departmental Overhead Allocation; Activity-Based Costing; Segmented Income Statements LO3–1, LO3–2, LO3–3, LO3–4, LO4–4, LO4–5, LO5–1, LO5–3, LO5–4
Koontz Company manufactures two models of industrial components—a Basic model and an Advanced Model. The company considers all of its manufacturing overhead costs to be fixed and page 599it uses plantwide manufacturing overhead cost allocation based on direct labor-hours. Koontz’s controller prepared the segmented income statement that is shown below for the most recent year (he allocated selling and administrative expenses to products based on sales dollars):
Basic
Advanced
Total
Number of units produced and sold
20,000
10,000
30,000
Sales
$3,000,000
$2,000,000
$5,000,000
Cost of goods sold
2,300,000
1,350,000
3,650,000
Gross margin
700,000
650,000
1,350,000
Selling and administrative expenses
720,000
480,000…
Chapter 7 Solutions
Managerial Accounting
Ch. 7.A - EXERCISE 7A-1 Time-Driven Activity-Based Costing...Ch. 7.A -
EXERCISE 7A-2 Time-Driven Activity-Based Costing...Ch. 7.A - EXERCISE 7A-3 Time-Driven Activity-Based Costing...Ch. 7.A - PROBLEM 7A-4 Time-Driven Activity-Based Costing LO...Ch. 7.A - PROBLEM 7A-5 Time-Driven Activity-Based Costing LO...Ch. 7 - Prob. 1QCh. 7 - Prob. 2QCh. 7 - Prob. 3QCh. 7 - What are unit-level, batch-level, product-level,...Ch. 7 - What types of costs should not be assigned to...
Ch. 7 - What are the two stages off allocation in...Ch. 7 - Why is the first stage of the allocation process...Ch. 7 - When activity-based costing is used, why do...Ch. 7 - Prob. 9QCh. 7 - Why is the form of activity-based costing...Ch. 7 - The Excel worksheet form that appears below is to...Ch. 7 - Prob. 2AECh. 7 - The Excel worksheet form that appears below is to...Ch. 7 - Prob. 1F15Ch. 7 - Prob. 2F15Ch. 7 - Prob. 3F15Ch. 7 - Prob. 4F15Ch. 7 - Prob. 5F15Ch. 7 - Prob. 6F15Ch. 7 - Prob. 7F15Ch. 7 - Prob. 8F15Ch. 7 - Prob. 9F15Ch. 7 - Prob. 10F15Ch. 7 - Prob. 11F15Ch. 7 - Prob. 12F15Ch. 7 - Prob. 13F15Ch. 7 - Prob. 14F15Ch. 7 - Prob. 15F15Ch. 7 - Prob. 1ECh. 7 - Prob. 2ECh. 7 - Prob. 3ECh. 7 - Prob. 4ECh. 7 - Prob. 5ECh. 7 - Prob. 6ECh. 7 - EXERCISE 7-7 First-Stage Allocations LO7-2
The...Ch. 7 - Prob. 8ECh. 7 - Prob. 9ECh. 7 - Prob. 10ECh. 7 - Prob. 11ECh. 7 - Prob. 12ECh. 7 - EXERCISE 7-13 Computing ABC Product Costs LO7-3,...Ch. 7 - Prob. 14ECh. 7 - Prob. 15ECh. 7 - Prob. 16PCh. 7 - Prob. 17PCh. 7 - Prob. 18PCh. 7 - Prob. 19PCh. 7 -
PROBLEM 7-20 Evaluating the Profitability of...
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