North Company designs and manufactures machines that facilitate DNA sequencing. Depending on the intended purpose of each machine and its functions, each machine is likely to be unique. The job costing system in its Norfolk plant has five activity cost pools, in addition to direct materials and direct labor. Job TPY-2306 requires 1,000 printed-circuit boards. The cost per board that passes the final inspection is $240. On average, only 50% of the completed units pass the final inspection. The prime costs per completed board include $25 for direct materials and $7 for direct labor. Required: Information pertaining to manufacturing overhead for printed-circuit boards follows: Fill in the missing amount. (Round your answers to 2 decimal places.) Activity Axial insertion Hardware insertion Hand load Masking Final test Cost Driver Number of axial insertions Number of hardware insertions Boothroyd time Number of points masked Test time Activity Driver Rate $ 0.23 4.00 0.18 Activity Consumption Overhead Factory per Board per Board 29.00 8.00 80.00 20.00 60.40 60.64 10.00

North Company designs and manufactures machines that facilitate DNA sequencing. Depending on the intended purpose of each machine and its functions, each machine is likely to be unique. The job costing system in its Norfolk plant has five activity cost pools, in addition to direct materials and direct labor. Job TPY-2306 requires 1,000 printed-circuit boards. The cost per board that passes the final inspection is $240. On average, only 50% of the completed units pass the final inspection. The prime costs per completed board include $25 for direct materials and $7 for direct labor. Required: Information pertaining to manufacturing overhead for printed-circuit boards follows: Fill in the missing amount. (Round your answers to 2 decimal places.) Activity Axial insertion Hardware insertion Hand load Masking Final test Cost Driver Number of axial insertions Number of hardware insertions Boothroyd time Number of points masked Test time Activity Driver Rate $ 0.23 4.00 0.18 Activity Consumption Overhead Factory per Board per Board 29.00 8.00 80.00 20.00 60.40 60.64 10.00

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter17: Activity Resource Usage Model And Tactical Decision Making

Section: Chapter Questions

Problem 10E: Brees, Inc., a manufacturer of golf carts, has just received an offer from a supplier to provide...

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North Company designs and manufactures machines that facilitate DNA sequencing. Depending on the intended purpose of each machine and its functions, each machine is likely to be unique. The job costing system in its Norfolk plant has five activity cost pools, in addition to direct materials and direct labor. Job TPY-2306 requires 1,000 printed-circuit boards. The cost per board that passes the final inspection is $240. On average, only 50% of the completed units pass the final inspection. The prime costs per completed board include $24 for direct materials and $7 for direct labor. pped Required: Information pertaining to manufacturing overhead for printed-circuit boards follows: Fill in the missing amount. (Round your answers to 2 decimal places.) Activity Driver Activity Consumption Overhead per Board ook Factory Activity Cost Driver Rate per Board Axial insertion Number of axial insertions 0.31 34.00 Fint Hardware insertion Number of hardware insertions 5.00 109.50 Hand load…
North Company designs and manufactures machines that facilitate DNA sequencing. Depending on the intended purpose of each machine and its functions, each machine is likely to be unique. The job costing system in its Norfolk plant has five activity cost pools, in addition to direct materials and direct labor. Job TPY-2306 requires 1,000 printed-circuit boards. The cost per board that passes the final inspection is $240. On average, only 50% of the completed units pass the final inspection. The prime costs per completed board include $25 for direct materials and $7 for direct labor. Required: Information pertaining to manufacturing overhead for printed-circuit boards follows: Fill in the missing amount. (Round your answers to 2 decimal places.) Activity Axial insertion Hardware insertion Hand load Masking Final test Cost Driver Number of axial insertions Number of hardware insertions Boothroyd time Number of points masked Test time 60.40 60.64 10.00 ( G 3 Help A 112 Save & Ch
North Company designs and manufactures machines that facilitate DNA sequencing. Depending on the intended purpose of each machine and its functions, each machine is likely to be unique. The job costing system in its Norfolk plant has five activity cost pools, in addition to direct materials and direct labor. Job TPY-2306 requires 1,000 printed-circuit boards. The cost per board that passes the final inspection is $240. On average, only 50% of the completed units pass the final inspection. The prime costs per completed board include $25 for direct materials and $5 for direct labor. Required: Information pertaining to manufacturing overhead for printed-circuit boards follows: Fill in the missing amount. (Round your answers to 2 decimal places.) Activity Driver Activity Consumption Overhead per Board 30.00 Factory Activity Cost Driver Rate per Board Number of axial insertions Number of hardware insertions Boothroyd time Number of points masked Test time 0.20 2.00 Axial insertion Hardware…
In its Department R, Recyclers, Inc., processes donated scrap cloth into towels for sale in local thrift shops. It sells the products at cost. The direct materials costs are zero, but the operation requires the use of direct labor and overhead. The company uses a process costing system and tracks the processing volume and costs incurred in each period. At the start of the current period, 550 towels were in process and were 60 percent complete. The costs incurred were $1,207. During the month, costs of $20,500 were incurred, 4,100 towels were started, and 275 towels were still in process at the end of the month. At the end of the month, the towels were 20 percent complete. Required: a. Prepare a production cost report; the company uses weighted-average process costing. b. Show the flow of costs through T-accounts. Assume that current period conversion costs are credited to various payables. i did A part , i want help in B
In its Department R, Recyclers, Inc., processes donated scrap cloth into towels for sale in local thrift shops. It sells the products at cost. The direct materials costs are zero, but the operation requires the use of direct labor and overhead. The company uses a process costing system and tracks the processing volume and costs incurred in each period. At the start of the current period, 450 towels were in process and were 60 percent complete. The costs incurred were $160. During the month, costs of $15,600 were incurred, 3,900 towels were started, and 225 towels were still in process at the end of the month. At the end of the month, the towels were 20 percent complete. Required: a. Prepare a production cost report: the company uses FIFO process costing. b. Show the flow of costs through T-accounts. Assume that current period conversion costs are credited to various payables.
In its Department R, Recyclers, Inc., processes donated scrap cloth into towels for sale in local thrift shops. It sells the products at cost. The direct materials costs are zero, but the operation requires the use of direct labor and overhead. The company uses a process costing system and tracks the processing volume and costs incurred in each period. At the start of the current period, 550 towels were in process and were 60 percent complete. The costs incurred were $1,207. During the month, costs of $20,500 were incurred, 4,100 towels were started, and 275 towels were still in process at the end of the month. At the end of the month, the towels were 20 percent complete. Required: a. Prepare a production cost report; the company uses weighted-average process costing. b. Show the flow of costs through T-accounts. Assume that current period conversion costs are credited to various payables.
Wixis Cabinets makes custom wooden cabinets for high-end stereo systems from specialty woods. The company uses a job-order costing system. The capacity of the plant is determined by the capacity of its constraint, which is time on the automated bandsaw that makes finely beveled cuts in wood according to the preprogrammed specifications of each cabinet. The bandsaw can operate up to 184 hours per month. The estimated total manufacturing overhead cost at capacity is $15,088 per month. The company bases its predetermined overhead rate on capacity, so its predetermined overhead rate is $82 per hour of bandsaw use.The results of a recent month’s operations appear below:Sales $ 43,710Beginning inventories $ 0Ending inventories $ 0Direct materials $ 5,380Direct labor $ 8,860Manufacturing overhead incurred $ 14,260Selling and administrative expense $ 8,180Actual hours of bandsaw use 154Required:1-a. Prepare an income statement that records the cost of unused capacity on the income statement…
Wixis Cabinets makes custom wooden cabinets for high-end stereo systems from specialty woods. The company uses a job-order costing system. The capacity of the plant is determined by the capacity of its constraint, which is time on the automated bandsaw that makes finely beveled cuts in wood according to the preprogrammed specifications of each cabinet. The bandsaw can operate up to 184 hours per month. The estimated total manufacturing overhead cost at capacity is $15,088 per month. The company bases its predetermined overhead rate on capacity, so its predetermined overhead rate is $82 per hour of bandsaw use. The results of a recent month's operations appear below: Sales Beginning inventories Ending inventories Direct materials Direct labor Manufacturing overhead incurred Selling and administrative expense Actual hours of bandsaw use Required: 1-a. Prepare an income statement for the month. Your income statement should include the cost of unused capacity as a period expense. 1-b. What…
Brees, Inc., a manufacturer of golf carts, has just received an offer from a supplier to provide 2,600 units of a component used in its main product. The component is a track assembly that is currently produced internally. The supplier has offered to sell the track assembly for $65 per unit. Brees is currently using a traditional, unit-based costing system that assigns overhead to jobs on the basis of direct labor hours. The estimated traditional full cost of producing the track assembly is as follows: Direct materials $40.00 Direct labor 16.00 Variable overhead 4.00 Fixed overhead 40.00 Prior to making a decision, the company’s CEO commissioned a special study to see whether there would be any decrease in the fixed overhead costs. The results of the study revealed the following: 3 setups—$1,180 each (The setups would be avoided, and total spending could be reduced by $1,180 per setup.) One half-time inspector is needed. The company already uses part-time inspectors hired…
Ole Company manufactures two products, Product A and Product B. Currently, machine hours are used to allocate the overhead costs to the two products. Ole Company is considering adopting an activity-based costing system. If so, overhead costs will be traced to the following activities: Activities Machining Quality Control Material Moves Activity cost pools $300,000 $200,000 $400,000 Cost Drivers Machine Hours Number of inspections Number of moves Product A 30,000 400 2,000 Product B 20,000 600 6,000 (a) Calculate the total overhead cost assigned to Product A under the current system. (b) Calculate the total overhead cost for Product A if the company implements activity-based costing system. (c) Briefly explain which costing method gives a more accurate picture of the costs. (d) Suppose you are the management accountant in a university. List any three (3)activities commonly carried out in universities and identify an appropriate cost driver for each activity.
Rundle Manufacturing produces two keyboards, one for laptop computers and the other for desktop computers. The production process is automated, and the company has found activity-based costing useful in assigning overhead costs to its products. The company has identified five major activities involved in producing the keyboards. Activity Materials receiving & handling Production setup Assembly Quality inspection Packing and shipping Activity measures for the two kinds of keyboards follow: Laptops Desktops Required Labor Cost $ 1,310 1,200 Laptop keyboards Desktop keyboards Allocation Base Cost of material Number of setups Number of parts Inspection time Number of orders Material Number of Number of Cost $ 6,300 7,600 Cost Per Unit Setups 29 13 Parts 49 26 Allocation Rate 3% of material cost $102.00 per setup $3.00 per part $ 1.60 per minute $9.00 per order Inspection Time 7,400 minutes 4,800 minutes a. Compute the cost per unit of laptop and desktop keyboards, assuming that Rundle made…
Altex Inc. manufactures two products: car wheels and truck wheels. To determine the amount of overhead to assign to each product line, the controller, Robert Hermann, has developed the following information. Estimated wheels produced Direct labor hours per wheel Activity Cost Pools Setting up machines Assembling Inspection Car Total estimated overhead costs for the two product lines are $835,200. Assembling 39,000 Hermann is not satisfied with the traditional method of allocating overhead because he believes that most of the overhead costs relate to the truck wheels product line because of its complexity. He therefore develops the following three activity cost pools and related cost drivers to better understand these costs. Setting up machines $ Inspection 1 Truck 11,000 S Estimated Use of Cost Drivers 1.000 setups 72.000 labor hours 1.200 inspections 3 Compute the activity-based overhead rates for these three cost pools. Estimated Overhead Overhead Rates Costs $216,000 360,000 259,200