Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y?
Q: Compute the actual manufacturing overhead and applied manufacturing overhead
A: Manufacturing overhead can be defined as the cost incurred upon the manufacturing or production of…
Q: Conversion costs include A. product and period costs B. direct labor and manufacturing overhead…
A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…
Q: Why is the calculation of equivalent units of production needed in a process costing system?
A: Process costing: It is a method of cost accounting, which is used where the production is…
Q: The three major cost components of manufacturing a product are a. Direct materials, direct labor,…
A: Definition: Manufacturing cost: The cost incurred in the production process of the finished product…
Q: Define the following: direct material costs, direct manufacturing-labor costs, manufacturing…
A: Direct Material Costs: It includes cost of direct materials used in manufacturing of finished goods.…
Q: How to calculate manufacturing cost per unit
A: Manufacturing cost can be defined as the cost that is incurred while producing a product. It…
Q: 1. Which of the following are period costs? Raw materials Direct materials and direct labor Direct…
A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…
Q: while doing the overhead summary sheet do we have to use that direct cost?
A: Direct cost means cost of direct material, direct labour and direct expenses that are incurred for…
Q: Define manufacturing overhead costs?
A: Step 1: Overheads are the costs that are incurred to run a business. Some of the overheads are rent,…
Q: What is the weighted-average method for process costing systems?
A:
Q: What is the formula to compute the predetermined overhead allocation rate?
A: Predetermined Overhead Rate: Predetermined overhead rate is a measure used to allocate the estimated…
Q: Why factory overhead is computed based on direct labor?
A: Refer Step 2 for explanation
Q: How does a manufacturing company calculate unit product cost?
A: Product Cost: Product costs refer to the total cost incurred by the business to produce the product…
Q: Under an activity based costing system, what is the per-unit overhead cost of Z
A: Activity based costing is a management accounting technique which used to allocate overhead cost and…
Q: Using Traditional Method of costing using direct labor hours as basis of applying overhead, what is…
A: Using traditional method of costing, cost of product = Prime cost + overhead cost allocated on the…
Q: For the purpose of calculating overapplication or overapplication of overheads, the applied…
A: In cost accounting, budgeting plays a key role in the control of the cost of the goods in the…
Q: According to the activity-based costing system, the average cost of product YBY is closest to
A: Average cost is the component of cost accounting which accumulates all the cost and determine the…
Q: Define manufacturing overhead costs with an example?
A: All manufacturing costs that are related to the production cost, but that is not directly related…
Q: Calculate the total absorbtion rate used to apportion manufacturing overhead by?
A: The absorption rate is assigned according to the various allocation grounds. Hours of direct work…
Q: What is this exactly (cost of goods manufactured)? Can you give me 3 examples of direct materials,…
A: Introduction:- Cost of goods manufactured is the combination of Direct material, Direct labor and…
Q: Under an activity-based costing system, what is the per-unit overhead cost of Z?
A: Activity-based Costing which is more popularly known as the ABC method is an accounting method in…
Q: Overhead assigned to KJ22 product?
A: Formula: Overhead assigned to Batches = Setting up batches x Number of batches
Q: Which of the following would be both a prime cost and a conversion cost? direct labor direct…
A: Process costing: Process costing is included costs like labor, material, and overhead which…
Q: Required: Detemine the direct and indirect labor cost and allocate the labor costto each cost…
A: The cost paid to the labors for performing the work in the organization is known as labor cost. It…
Q: Compute the Manufacturing Overhead Applied to Jobs;
A: Overhead cost allocation: It is the process of allocating the estimated overhead of a company to its…
Q: What document triggers the beginning of the cost accounting process for a given production run?
A: Cost Accounting System: Cost accounting system can be defined as a framework designed by the company…
Q: Compute the indirect manufacturing costs allocated to each product using activity based costing.
A: Activity based costing is a costing system in which indirect costs or overheads are allocated to…
Q: what are the three major components of product costs: direct materials, direct labor, and…
A: The costs of producing a product are referred to as product costs. Direct material, direct labour,…
Q: KB. Which are the three product costs that are added to work in process? O Direct materials, direct…
A: In this question, we have been asked three costs to be used in work in process, for which we have…
Q: Which of the following is the correct formula to compute the predetermined overhead rate?…
A: Predetermined overhead rate: Predetermined overhead rate is calculated befor the period begins. This…
Q: Which of the following is not a manufacturing cost category? a)Cost of goods sold b)Direct materials…
A: MANUFACTURING COSTS INCLUDE - - direct material - direct labor - manufacturing overheads.
Q: How do I calculate manufacturing overhead based on direct labor hours
A: Manufacturing overhead means all type of indirect costs that are incurred for production and…
Q: How to compute manufacturing overhead?
A: In order to manufacture the product, various indirect expenses are incurred such as indirect…
Q: Define the following: (a) direct materials, (b) indirect materials, (c) direct labor, (d) indirect…
A: Cost: Cost can be defined as the cash and cash equivalent which is incurred against the products…
Q: a) What was the amount of direct materials used in production? b) What was the amount of…
A:
Q: How do you compute the unit varible cost for an item in manufacturing?
A: Variable costs: Variable costs are costs that vary in direct proportion with changes in production…
Q: Describe weighted average method under process costing.
A: Process Costing: Process costing is method of cost accounting in which all the costs that are…
Q: Under variable costing, a unit of product includes which costs? A. direct material, direct labor,…
A: Variable costing: In the process of variable costing the fixed manufacturing overhead are not to be…
Q: Choose the three components of product cost from the list below. a) Indirect material, direct…
A: Product costs seem to be the expenses involved in the production of goods that have been meant for…
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- Medical Tape makes two products: Generic and Label. It estimates it will produce 423,694 units of Generic and 652,200 of Label, and the overhead for each of its cost pools is as follows: It has also estimated the activities for each cost driver as follows: How much is the overhead allocated to each unit of Generic and Label?Roberts Company produces two weed eaters: basic and advanced. The company has four activities: machining, engineering, receiving, and inspection. Information on these activities and their drivers is given below. Overhead costs: Required: 1. Calculate the four activity rates. 2. Calculate the unit costs using activity rates. Also, calculate the overhead cost per unit. 3. What if consumption ratios instead of activity rates were used to assign costs instead of activity rates? Show the cost assignment for the inspection activity.Evans, Inc., has a unit-based costing system. Evanss Miami plant produces 10 different electronic products. The demand for each product is about the same. Although they differ in complexity, each product uses about the same labor time and materials. The plant has used direct labor hours for years to assign overhead to products. To help design engineers understand the assumed cost relationships, the Cost Accounting Department developed the following cost equation. (The equation describes the relationship between total manufacturing costs and direct labor hours; the equation is supported by a coefficient of determination of 60 percent.) Y=5,000,000+30X,whereX=directlaborhours The variable rate of 30 is broken down as follows: Because of competitive pressures, product engineering was given the charge to redesign products to reduce the total cost of manufacturing. Using the above cost relationships, product engineering adopted the strategy of redesigning to reduce direct labor content. As each design was completed, an engineering change order was cut, triggering a series of events such as design approval, vendor selection, bill of materials update, redrawing of schematic, test runs, changes in setup procedures, development of new inspection procedures, and so on. After one year of design changes, the normal volume of direct labor was reduced from 250,000 hours to 200,000 hours, with the same number of products being produced. Although each product differs in its labor content, the redesign efforts reduced the labor content for all products. On average, the labor content per unit of product dropped from 1.25 hours per unit to one hour per unit. Fixed overhead, however, increased from 5,000,000 to 6,600,000 per year. Suppose that a consultant was hired to explain the increase in fixed overhead costs. The consultants study revealed that the 30 per hour rate captured the unit-level variable costs; however, the cost behavior of other activities was quite different. For example, setting up equipment is a step-fixed cost, where each step is 2,000 setup hours, costing 90,000. The study also revealed that the cost of receiving goods is a function of the number of different components. This activity has a variable cost of 2,000 per component type and a fixed cost that follows a step-cost pattern. The step is defined by 20 components with a cost of 50,000 per step. Assume also that the consultant indicated that the design adopted by the engineers increased the demand for setups from 20,000 setup hours to 40,000 setup hours and the number of different components from 100 to 250. The demand for other non-unit-level activities remained unchanged. The consultant also recommended that management take a look at a rejected design for its products. This rejected design increased direct labor content from 250,000 hours to 260,000 hours, decreased the demand for setups from 20,000 hours to 10,000 hours, and decreased the demand for purchasing from 100 component types to 75 component types, while the demand for all other activities remained unchanged. Required: 1. Using normal volume, compute the manufacturing cost per labor hour before the year of design changes. What is the cost per unit of an average product? 2. Using normal volume after the one year of design changes, compute the manufacturing cost per hour. What is the cost per unit of an average product? 3. Before considering the consultants study, what do you think is the most likely explanation for the failure of the design changes to reduce manufacturing costs? Now use the information from the consultants study to explain the increase in the average cost per unit of product. What changes would you suggest to improve Evanss efforts to reduce costs? 4. Explain why the consultant recommended a second look at a rejected design. Provide computational support. What does this tell you about the strategic importance of cost management?
- Lansing. Inc., provided the following data for its two producing departments: Machine hours are used to assign the overhead of the Molding Department, and direct labor hours are used to assign the overhead of the Polishing Department. There are 30,000 units of Form A produced and sold and 50,000 of Form B. Required: 1. Calculate the overhead rates for each department. 2. Using departmental rates, assign overhead to live two products and calculate the overhead cost per unit. How does this compare with the plantwide rate unit cost, using direct labor hours? 3. What if the machine hours in Molding were 1,200 for Form A and 3,800 for Form B and the direct labor hours used in Polishing were 5,000 and 15,000, respectively? Calculate the overhead cost per unit for each product using departmental rates, and compare with the plantwide rate unit costs calculated in Requirement 2. What can you conclude from this outcome?Use the following information for Brief Exercises 4-34 and 4-35: Sanjay Company manufactures a product in a factory that has two producing departments, Assembly and Painting, and two support departments, S1 and S2. The activity driver for S1 is square footage, and the activity driver for S2 is number of machine hours. The following data pertain to Sanjay: Brief Exercises 4-34 (Appendix 4B) Assigning Support Department Costs by Using the Direct Method Refer to the information for Sanjay Company above. Required: 1. Calculate the cost assignment ratios to be used under the direct method for Departments S1 and S2. (Note: Each support department will have two ratiosone for Assembly and the other for Painting.) 2. Allocate the support department costs to the producing departments by using the direct method.A manufacturing company has two service and two production departments. Building Maintenance and Factory Office are the service departments. The production departments are Assembly and Machining. The following data have been estimated for next years operations: The direct charges identified with each of the departments are as follows: The building maintenance department services all departments of the company, and its costs are allocated using floor space occupied, while factory office costs are allocable to Assembly and Machining on the basis of direct labor hours. 1. Distribute the service department costs, using the direct method. 2. Distribute the service department costs, using the sequential distribution method, with the department servicing the greatest number of other departments distributed first.
- Friedman Company uses JIT manufacturing. There are several manufacturing cells set up within one of its factories. One of the cells makes stands for flat-screen televisions. The cost of production for the month of April is given below. During May, 30,000 stands were produced and sold. Required: 1. Explain why process costing can be used for computing the cost of production for the stands. 2. Calculate the cost per unit for a stand. 3. Explain how activity-based costing can be used to determine the overhead assigned to the cell.Plata Company has identified the following overhead activities, costs, and activity drivers for the coming year: Plata produces two models of microwave ovens with the following activity demands: The companys normal activity is 21,000 machine hours. Calculate the total overhead cost that would be assigned to Model X using an activity-based costing system: a. 230,000 b. 240,000 c. 280,000 d. 190,000Geneva, Inc., makes two products, X and Y, that require allocation of indirect manufacturing costs. The following data were compiled by the accountants before making any allocations: The total cost of purchasing and receiving parts used in manufacturing is 60,000. The company uses a job-costing system with a single indirect cost rate. Under this system, allocated costs were 48,000 and 12,000 for X and Y, respectively. If an activity-based system is used, what would be the allocated costs for each product?
- Patterson Company produces wafers for integrated circuits. Data for the most recent year are provided: aCalculated using number of dies as the single unit-level driver. bCalculated by multiplying the consumption ratio of each product by the cost of each activity. Required: 1. Using the five most expensive activities, calculate the overhead cost assigned to each product. Assume that the costs of the other activities are assigned in proportion to the cost of the five activities. 2. Calculate the error relative to the fully specified ABC product cost and comment on the outcome. 3. What if activities 1, 2, 5, and 8 each had a cost of 650,000 and the remaining activities had a cost of 50,000? Calculate the cost assigned to Wafer A by a fully specified ABC system and then by an approximately relevant ABC approach. Comment on the implications for the approximately relevant approach.Activity-based product costing Sweet Sugar Company manufactures three products (white sugar, brown sugar, and powdered sugar) in a continuous production process. Senior management has asked the controller to conduct an activity-based costing study. The controller identified the amount of factory overhead required by the critical activities of the organization as follows: The activity bases identified for each activity are as follows: The activity-base usage quantities and units produced for the three products were determined from corporate records and are as follows: Each product requires 0.5 machine hour per unit. Instructions Determine the activity rate for each activity. Determine the total and per-unit activity cost for all three products. Round to nearest cent. Why arent the activity unit costs equal across all three products since they require the same machine time per unit?Use the following information for Brief Exercises 4-27 and 4-28: Quillen Company manufactures a product in a factory that has two producing departments, Cutting and Sewing, and two support departments, S1 and S2. The activity driver for S1 is number of employees, and the activity driver for S2 is number of maintenance hours. The following data pertain to Quillen: Brief Exercises 4-27 (Appendix 4B) Assigning Support Department Costs by Using the Direct Method Refer to the information for Quillen Company above. Required: 1. Calculate the cost assignment ratios to be used under the direct method for Departments S1 and S2. (Note: Each support department will have two ratiosone for Cutting and the other for Sewing.) 2. Allocate the support department costs to the producing departments by using the direct method.