Comprehensive Problem II - ABC-1
.doc
keyboard_arrow_up
School
Hillsborough Community College *
*We aren’t endorsed by this school
Course
101
Subject
Accounting
Date
May 6, 2024
Type
doc
Pages
4
Uploaded by ChancellorKouprey4314 on coursehero.com
Comprehensive Problem II – Worth 50 points
Part I Performance Products Corporation makes two products, Titanium Rims and Posts. Data regarding the two products is provided in the following table:
Direct Labor Hours per Unit
Annual Production
Rims
0.40
20,000 units
Posts
0.20
80,000 units
Additional information about the company follows:
a.
Rims
require $17.00 in direct materials per unit, and Posts
require $10.00.
b.
The direct labor wage rate is $16.00 per hour.
c.
Rims
are more complex to manufacture than Posts
, and they require special equipment.
d.
The Activity Based Costing (ABC) System has the following activity cost pools:
Activity Cost
Pool
Activity
Measure
Estimated
Overhead Cost
Rims
Posts
Total Activity
for
Rims and Posts
Machine Setups
Number of
Machine Setups
$21,600
100
80
180
Special Processing
Machine Hours
$180,000
4,000
0
4,000
General Factory
Direct Labor
Hours
$288,000
8,000
16,000
24,000
Required - Use the tables on the following page to determine the following required components:
In order to receive full credit please show all work!!
1.
Compute the activity rate for each activity pool.
2.
Determine the amount of manufacturing overhead assigned to each product (Rims and Posts) for each activity cost pool.
3.
Determine the unit product
cost of each product (Rims and Posts) according to the ABC system.
1
1. Compute the activity rate for each activity pool.
Activity Cost Pool
Estimated Overhead
Cost
Expected Activity
Activity Rate
Machine Setups
$21600
$180
$120
Special Processing
$180,000
$4,000
$45
General Factory
$288,000
$24,000
$12
Work shown
: Machine Setups: Activity rate for Machine Setups = $21,600 / 180 The activity rate for Machine Setups = $120 per setup
Special Processing: Activity rate for Special Processing = $180,000 / 4,000 Activity rate for Special Processing = $45 per machine hour General Factory: Activity rate for General Factory = $288,000 / 24,000 Activity rate for General Factory = $12 per direct labor hour
2. Overhead is assigned to the two products as follows:
Rims:
Activity Cost Pool
Activity Rate
Activity ABC Cost
Machine Setups
$120
100
$12,000
Special Processing
$45
4,000
$180,000
General Factory
$12
8,000
$96,000
Total Factory Overhead
$288,000
Posts:
Activity Cost Pool
Activity Rate
Activity ABC Cost
Machine Setups
$120
80
9600
Special Processing
$45
0
0
2
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
- Access to all documents
- Unlimited textbook solutions
- 24/7 expert homework help
Related Questions
Required information
[The following information applies to the questions displayed below.]
Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow:
Direct Labor-Hours
per unit
0.40
0.80
Annual Production
18,000 units
76,000 units
Rims
Posts
Additional information about the company follows:
a. Rims require $10 in direct materials per unit, and Posts require $7.
b. The direct labor wage rate is $17 per hour.
c. Rims are more complex to manufacture than Posts and they require special equipment.
d. The ABC system has the following activity cost pools:
Estimated Activity
Activity Cost Pool
Mach ine setups
Special process ing
General factory
Activity Measure
Number of setups
Mach ine-hours
Direct labor-hours
Estimated
Overhead Cost
$ 25,080
$ 122,360
$ 702,000
Rims
80
2,000
7,200
Total
300
2,000
68,000
Posts
220
60,800
2. Determine the unit product cost of each product according to the ABC system. (Do not round intermediate…
arrow_forward
Required information
Skip to question
[The following information applies to the questions displayed below.]
Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow:
Direct Labor-Hours per unit
Annual Production
Rims
0.60
26,000 units
Posts
0.60
84,000 units
Additional information about the company follows:
Rims require $17 in direct materials per unit, and Posts require $14.
The direct labor wage rate is $20 per hour.
Rims are more complex to manufacture than Posts and they require special equipment.
The ABC system has the following activity cost pools:
Activity Cost Pool
Activity Measure
Estimated Activity
Estimated Overhead Cost
Rims
Posts
Total
Machine setups
Number of setups
$ 39,480
80
320
400
Special processing
Machine-hours
$ 146,160
3,000
0
3,000
General factory
Direct labor-hours
$ 1,092,000
15,600
50,400
66,000
What us the unit cost ofposts
arrow_forward
Required information
[The following information applies to the questions displayed below.]
Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow:
Rims
Posts
Direct Labor-
Hours per unit
0.70
0.60
Annual
Production
20,000 units
84,000 units
Additional information about the company follows:
a. Rims require $16 in direct materials per unit, and Posts require $12.
b. The direct labor wage rate is $15 per hour.
c. Rims are more complex to manufacture than Posts and they require special equipment.
d. The ABC system has the following activity cost pools:
Estimated Activity
Activity Cost Pool
Machine setups
Special processing
General factory
Activity Measure
Number of setups
Machine-hours
Estimated
Overhead Cost
Rims
$ 28,560
80
$ 159,600
6,000
Posts
130
0
Total
210
6,000
Direct labor-hours
$ 680,000
14,000
50,400
64,400
2. Determine the unit product cost of each product according to the ABC system. (Do not round intermediate…
arrow_forward
es
!
Required information
[The following information applies to the questions displayed below.]
Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow:
Direct Labor-
Hours per unit
0.50
0.80
Annual
Production
25,000 units
Rims
Posts
88,000 units
Additional information about the company follows:
a. Rims require $19 in direct materials per unit, and Posts require $17.
b. The direct labor wage rate is $15 per hour.
c. Rims are more complex to manufacture than Posts and they require special equipment.
d. The ABC system has the following activity cost pools:
Activity Cost Pool
Machine setups
Special processing
General factory
Activity Measure
Number of setups
Machine-hours
Direct labor-hours
Unit product cost of Rims
Unit product cost of Posts
Estimated
Overhead Cost
$ 26,400
$ 163,680
$ 500,000
Estimated Activity
Rims
70
4,000
12,500
Posts
430
0
70,400
Total
500
4,000
82,900
2. Determine the unit product cost of each product…
arrow_forward
Required information
[The following information applies to the questions displayed below.]
Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow:
Rims
Posts
Direct Labor-
Hours per unit
0.70
0.80
Annual
Production
Additional information about the company follows:
a. Rims require $14 in direct materials per unit, and Posts require $10.
b. The direct labor wage rate is $20 per hour.
Activity Cost Pool
Machine setups
Special processing
General factory
26,000 units
90,000 units
c. Rims are more complex to manufacture than Posts and they require special equipment.
d. The ABC system has the following activity cost pools:
Unit product cost of Rims
Unit product cost of Posts
Activity Measure
Number of setups
Machine-hours
Direct labor-hours
Estimated
Overhead Cost
$ 33,300
$ 172,800
$ 858,000
Estimated Activity
Rims
70
3,000
18,200
Posts
230
0
72,000
Total
300
3,000
90,200
2. Determine the unit product cost of each product…
arrow_forward
Chapter 6: A Closer Look on Cost Accounting
The company makes 2,350 units of product X a year, requiring a total os
3.300 machine hours, 250 orders and 200 inspection hours per year. The
product's direct material cost is P201.50 and its direct labor cost in
P211.11 per unit. The product sells for P590 per unit. According to the
activity-based costing system, the gross margin for product X is?
423,087.50
b. 350,435.50
c. 416,890
d. None of the choice
a.
56.
The following information is available for Mary Corp.
Activity Pool
Setups
Quality Inspections
Assembly (direct labor hour)
What is the activity rate for setups?
Activity Base
50,000
120,000
400,000
Budgeted Amount
300,000
600,000
2,000,000
a. P5.09
c. РО.75
d. P58.00
b. Рб.00
The activity rate for quality inspection is:
с. Рб.00
d. P5.09
a. P5.29
b. P5.00
arrow_forward
Required Information
The following information applies to the questions displayed below.]
Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product
uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000
units of each product Its average cost per unit for each product at this level of activity are given below.
Beta
$24
32
Direct materials
Direct labor
Variable manufacturing overhead
Traceable fFixed manufacturing overhead
Variable selling expenses
Common fixed expenses
%2442
42
34
31.
Total cost per unit
$173
607$
The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses
are unavoidable and have been allocated to products based on sales dollars.
Assume that Cane normally produces and sells 59,000 Betas per year. What is the financial advantage (disadvantage) of
iscontinuing the Beta product line?
o search
近
arrow_forward
!
Required information
[The following information applies to the questions displayed below.]
Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow:
Direct Labor-
Hours per unit
Rims
Posts
0.20
0.70
Annual
Production
21,000 units
79,000 units
Additional information about the company follows:
a. Rims require $19 in direct materials per unit, and Posts require $15.
b. The direct labor wage rate is $15 per hour.
c. Rims are more complex to manufacture than Posts and they require special equipment.
d. The ABC system has the following activity cost pools:
Estimated Activity
Activity Cost Pool
Machine setups
Special processing
General factory
Activity Measure
Number of setups
Machine-hours
Estimated
Overhead Cost
Rims
$ 34,760
$ 136,670
Direct labor-hours
$ 819,000
110
1,000
4,200
Posts
90
0
Total
200
55,300
1,000
59,500
2. Determine the unit product cost of each product according to the ABC system. (Do not round intermediate…
arrow_forward
Sage Corporation manufactures two products with the following characteristics.
Product 1
Product 2
Unit Contribution
Margin
$47.25
$36.70
Machine Hours
Required for Production
Contribution margin per unit of limited resource
Sage Corporation should produce.
0,15 hours
If Sage's machine hours are limited to 2,000 per month, determine which product it should produce.
0.10 hours
$
Product 11
Product 2
arrow_forward
Sage Corporation manufactures two products with the following characteristics.
Unit Contribution
Machine Hours
Margin
Required for Production
Product 1
$46.80
0.15 hours
Product 2
$36.10
0.10 hours
If Sage's machine hours are limited to 2,000 per month, determine which product it should produce.
Product 1
Product 2
295
$
370
Contribution margin per unit of limited resource
Sage Corporation should produce
Product 2
%24
arrow_forward
i
RequIred Informatlon
The following information applies to the questions displayed below.]
Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product
uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000
units of each product. Its average cost per unit for each product at this level of activity are given below
Alpha
$ 42
42
Beta
$ 24
Direct labor
Variable manufacturing overhead
Traceable fixed manufacturing overhead
Variable selling expenses
Common fixed expenses
24
34
31
27
Total cost per unit
$173
The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses
are unavoidable and have been allocated to products based on sales dollars.
11. How many pounds of raw material are needed to make one unit of each of the two products?
Beta
Pounds of raw materials per unit
of 15
e to search
五 。
F4
F5
F7
F8
F10
arrow_forward
Required Informatlon
[The following information applies to the questions displayed below.]
Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product
uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000
units of each product. Its average cost per unit for each product at this level of activity are given below
Alpha
Beta
$ 24
Direct materials
3.
24
Direct labor
Variable manufacturing overhead
Traceable fixed manufacturing overhead
Variable selling expenses
Common fixed expenses
42
34
27
Total cost per unit
$173
The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses
are unavoidable and have been allocated to products based on sales dollars.
3. Assume that Cane expects to produce and sell 99,000 Alphas during the current year. One of Cane's sales representatives has
found a new customer who is willing to buy…
arrow_forward
QUESTION 2
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow:
Direct Labor-Hours per Unit Annual Production
0.80
13,000
51,000
Hubs
Sprockets 0.40
Additional information about the company follows:
units
units
1. Hubs require $28 in direct materials per unit, and Sprockets require $12.
2. The direct labor wage rate is $12 per hour.
3. Hubs require special equipment and are more complex to manufacture than Sprockets.
4. The ABC system has the following activity cost pools:
Activity Cost Pool (Activity Measure)
Machine setups (number of setups)
Special processing (machine-hours)
General factory (organization-sustaining)
Estimated Overhead Cost
$ 33,930
$ 264,000
$ 398,000
Required:
1. Compute the activity rate for each activity cost pool.
2. Determine the unit product cost of each product according to the ABC system.
For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac).
BIUS
Paragraph
Arial
10pt
111
ען
<
Total
261
4,800
ΝΑ
I.
g
arrow_forward
Question No. 1-2
The estimated costs of producing 6,000 units of a component are:
Per Unit
Direct Material
$10
Direct Labor
8
Applied Variable Factory Overhead
9
Applied Fixed Factory Overhead
$1.5 per direct labor dollar
The same component can be purchased from market at a price of $29 per unit. If the component
is purchased from market, 25% of the fixed factory overhead will be saved.
12
Required:
a. Should the component be purchased from the market?
b. Being a production manager, provide your iogicai opinion on choosing between
purchasing the component from market or producing in-house
arrow_forward
Sage Corporation manufactures two products with the following characteristics.
Unit Contribution
Machine Hours
Margin
Required for Production
Product 1
$44.25
0.15 hours
Product 2
$35.50
0.10 hours
If Sage's machine hours are limited to 2,000 per month, determine which product it should produce.
Product 1
Product 2
$
Contribution margin per unit of limited resource
Sage Corporation should produce
arrow_forward
Required information
[The following information applies to the questions displayed below.]
Cane Company manufactures two products called Alpha and Beta that sell for $120 and $80, respectively. Each product
uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 100,000
units of each product. Its average cost per unit for each product at this level of activity are given below:
Direct materials
Direct labor
Alpha
$ 30
Beta
$ 12
20
Variable manufacturing overhead
Traceable fixed manufacturing overhead
Variable selling expenses
Common fixed expenses
15
5
16
18
12
8
15
10
Total cost per unit
$ 100
$ 68
The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses
are unavoidable and have been allocated to products based on sales dollars.
5. Assume that Cane expects to produce and sell 95,000 Alphas during the current year. One of Cane's sales representatives has
found a new customer…
arrow_forward
Chhom Incorporated, manufactures and cells two products Product F and Product U4 Data concerning the expected production of each product and the expected total direct labor hours (DLH required to produce that output
appear below
Product F9
Product 04
Total direct labor-hoursi
Expected Direct Labor-Hours Total Direct
Production
300
600
Activity Cost Pools
Labor-related
Production orders
order size
Per Unit
4.0
2.0
The direct labor rate is $25.90 per DLH The direct materials cost per unit is $285 for Product F9 and $244 for Product 4
The company is considering adopting an activity based costing system with the following activity cost pools, activity measures, and expected activity
Activity
Measures
DLHS
orders
MHS
Estimated
Overhead Cost Product
$ 42,600
67,630
137,820
$ 248,050
Labor-Hours
1,200
1,200
2,400
1,200
400
3,300
Expected Activity
Product U
1,200
GOO
3,100
Total
2,400
1,000
4,400
arrow_forward
Problem 1
Laughton Corporation makes two styles of cases for compact disks, the standard case and the
deluxe case. The company has assigned $210,000 in monthly manufacturing overhead to three cost
pools as follows: $90,000 to machining costs, $60,000 to production set-up costs, and $60,000 to
inspection costs. Additional monthly data is provided below:
Standard Case
Deluxe Case
$480,000
$189,000
Sales revenue
Direct materials
$135,000
$45,000
$105,000
$30,000
Direct labor
24,000
Machine hours
6,000
Production runs
7
12
3,000
Units produced and sold
33,000
The first and last unit in each production run is inspected for quality control purposes. Inspection
costs are allocated to the products based on the number of inspections required. Machining costs
are allocated to products using machine hours as an activity base. Set-up costs are allocated to
products based on the number of production runs each product line requires
Required:
(1) Allocate manufacturing overhead from the activity cost…
arrow_forward
Sheddon Industries produces two products. The products' identified costs are as follows:
Direct materials.
Direct labor
Multiple Choice
The company's overhead costs of $55,000 are allocated based on direct labor cost. Assume 5,000 units of product A and
6,000 units of product B are produced. What is the cost per unit for product B?
Note: Do not round intermediate calculations.
$12.56
$14.56
Product A
$ 21,000
15,000
$14.19
Product B
$ 16,000
25,000
arrow_forward
3. Assume that Cane expects to produce and sell 83,000 Alphas during the current year. One of Cane's sales representatives has
found a new customer who is willing to buy 13,000 additional Alphas for a price of $92 per unit. What is the financial advantage
(disadvantage) of accepting the new customer's order?
Financial (disadvantage)
Financial advantage
arrow_forward
对 a
Required Information
[The following information applies to the questions displayed below.]
Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product
uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000
units of each product Its average cost per unit for each product at this level of activity are given below.
Alpha.
$ 42
Beta
2424
32
Direct materials
Direct labor
Variable manufacturing overhead,
Traceable fixed manufacturing overhead,
Variable selling expenses,
Common fixed expenses
42
26.
34
24
27.
29.
34
Total cost per unit
The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses
are unavoidable and have been allocated to products based on sales dollars.
12. What contribution margin per pound of raw material is earned by each of the two products? (Round your answer to 2 declmal
Beta
Contribution margin…
arrow_forward
Direct LADOT-nous
per Unit
Hubs
Sprockets
Additional information about the company follows:
0.60
0.20
a. Hubs require $27 in direct materials per unit, and Sprockets require $16.
b. The direct labor wage rate is $17 per hour.
Annual Production
20,000 units
60,000 units
c. Hubs require special equipment and are more complex to manufacture than Sprockets.
d. The ABC system has the following activity cost pools:
Activity Cost Pool (Activity Measure)
Machine setups (number of setups)
Special processing (machine-hours)
General factory (organization-sustaining)
Required 1 Required 2
Direct materials
Direct labor
Overhead
Complete this question by entering your answers in the tabs below.
Estimated Overhead
Required:
1. Compute the activity rate for each activity cost pool.
2. Determine the unit product cost of each product according to the ABC system.
Hubs
Cost
$ 24,795
$ 164,500
$ 144,000
Sprockets
Hubs
145
4,700
ΝΑ
Activity
Sprockets
116
0
ΝΑ
Determine the unit product cost of each product…
arrow_forward
Required information
[The following information applies to the questions displayed below.]
Cane Company manufactures two products called Alpha and Beta that sell for $195 and $150, respectively. Each product
uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 123,000
units of each product. Its average cost per unit for each product at this level of activity are given below:
Alpha
$ 40
Beta
Direct materials
$ 15
Direct labor
34
28
Variable manufacturing overhead
Traceable fixed manufacturing overhead
Variable selling expenses
22
20
30
33
27
23
Common fixed expenses
30
25
Total cost per unit
$183
$ 144
The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses
are unavoidable and have been allocated to products based on sales dollars.
3. Assume that Cane expects to produce and sell 95,000 Alphas during the current year. One of Cane's sales representatives has
found a new…
arrow_forward
No. 1
The following is relevant for a production process for Period 1:
Direct material cost
$10,000
Direct labour cost
$5,000
Overheads
$3,000
Total costs
$18,000
The process produces joint products A and B, which are then sold at the
prices given below. The output figure represents all of the output from the
process:
Product A
Product B
Units of output
2,000
8,000
Price per unit
$5
$2.50
Required:
Calculate the cost of sales, and gross profit for products A and B
assuming:
(i) joint costs are apportioned by market value
(ii) joint costs are apportioned by production units.
arrow_forward
Required information
[The following information applies to the questions displayed below.]
Cane Company manufactures two products called Alpha and Beta that sell for $120 and $80, respectively. Each product
uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 100,000
units of each product. Its average cost per unit for each product at this level of activity are given below:
Alpha
$ 30
Beta
Direct materials
$12
Direct labor
20
15
Variable manufacturing overhead
Traceable fixed manufacturing overhead
Variable selling expenses
Common fixed expenses
15
16
18
12
8
15
10
Total cost per unit
$ 100
$ 68
The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses
are unavoidable and have been allocated to products based on sales dollars.
9. Assume that Cane expects to produce and sell 80,000 Alphas during the current year. A supplier has offered to manufacture and
deliver 80,000…
arrow_forward
SEE MORE QUESTIONS
Recommended textbooks for you
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Essentials of Business Analytics (MindTap Course ...
Statistics
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Related Questions
- Required information [The following information applies to the questions displayed below.] Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow: Direct Labor-Hours per unit 0.40 0.80 Annual Production 18,000 units 76,000 units Rims Posts Additional information about the company follows: a. Rims require $10 in direct materials per unit, and Posts require $7. b. The direct labor wage rate is $17 per hour. c. Rims are more complex to manufacture than Posts and they require special equipment. d. The ABC system has the following activity cost pools: Estimated Activity Activity Cost Pool Mach ine setups Special process ing General factory Activity Measure Number of setups Mach ine-hours Direct labor-hours Estimated Overhead Cost $ 25,080 $ 122,360 $ 702,000 Rims 80 2,000 7,200 Total 300 2,000 68,000 Posts 220 60,800 2. Determine the unit product cost of each product according to the ABC system. (Do not round intermediate…arrow_forwardRequired information Skip to question [The following information applies to the questions displayed below.] Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow: Direct Labor-Hours per unit Annual Production Rims 0.60 26,000 units Posts 0.60 84,000 units Additional information about the company follows: Rims require $17 in direct materials per unit, and Posts require $14. The direct labor wage rate is $20 per hour. Rims are more complex to manufacture than Posts and they require special equipment. The ABC system has the following activity cost pools: Activity Cost Pool Activity Measure Estimated Activity Estimated Overhead Cost Rims Posts Total Machine setups Number of setups $ 39,480 80 320 400 Special processing Machine-hours $ 146,160 3,000 0 3,000 General factory Direct labor-hours $ 1,092,000 15,600 50,400 66,000 What us the unit cost ofpostsarrow_forwardRequired information [The following information applies to the questions displayed below.] Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow: Rims Posts Direct Labor- Hours per unit 0.70 0.60 Annual Production 20,000 units 84,000 units Additional information about the company follows: a. Rims require $16 in direct materials per unit, and Posts require $12. b. The direct labor wage rate is $15 per hour. c. Rims are more complex to manufacture than Posts and they require special equipment. d. The ABC system has the following activity cost pools: Estimated Activity Activity Cost Pool Machine setups Special processing General factory Activity Measure Number of setups Machine-hours Estimated Overhead Cost Rims $ 28,560 80 $ 159,600 6,000 Posts 130 0 Total 210 6,000 Direct labor-hours $ 680,000 14,000 50,400 64,400 2. Determine the unit product cost of each product according to the ABC system. (Do not round intermediate…arrow_forward
- es ! Required information [The following information applies to the questions displayed below.] Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow: Direct Labor- Hours per unit 0.50 0.80 Annual Production 25,000 units Rims Posts 88,000 units Additional information about the company follows: a. Rims require $19 in direct materials per unit, and Posts require $17. b. The direct labor wage rate is $15 per hour. c. Rims are more complex to manufacture than Posts and they require special equipment. d. The ABC system has the following activity cost pools: Activity Cost Pool Machine setups Special processing General factory Activity Measure Number of setups Machine-hours Direct labor-hours Unit product cost of Rims Unit product cost of Posts Estimated Overhead Cost $ 26,400 $ 163,680 $ 500,000 Estimated Activity Rims 70 4,000 12,500 Posts 430 0 70,400 Total 500 4,000 82,900 2. Determine the unit product cost of each product…arrow_forwardRequired information [The following information applies to the questions displayed below.] Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow: Rims Posts Direct Labor- Hours per unit 0.70 0.80 Annual Production Additional information about the company follows: a. Rims require $14 in direct materials per unit, and Posts require $10. b. The direct labor wage rate is $20 per hour. Activity Cost Pool Machine setups Special processing General factory 26,000 units 90,000 units c. Rims are more complex to manufacture than Posts and they require special equipment. d. The ABC system has the following activity cost pools: Unit product cost of Rims Unit product cost of Posts Activity Measure Number of setups Machine-hours Direct labor-hours Estimated Overhead Cost $ 33,300 $ 172,800 $ 858,000 Estimated Activity Rims 70 3,000 18,200 Posts 230 0 72,000 Total 300 3,000 90,200 2. Determine the unit product cost of each product…arrow_forwardChapter 6: A Closer Look on Cost Accounting The company makes 2,350 units of product X a year, requiring a total os 3.300 machine hours, 250 orders and 200 inspection hours per year. The product's direct material cost is P201.50 and its direct labor cost in P211.11 per unit. The product sells for P590 per unit. According to the activity-based costing system, the gross margin for product X is? 423,087.50 b. 350,435.50 c. 416,890 d. None of the choice a. 56. The following information is available for Mary Corp. Activity Pool Setups Quality Inspections Assembly (direct labor hour) What is the activity rate for setups? Activity Base 50,000 120,000 400,000 Budgeted Amount 300,000 600,000 2,000,000 a. P5.09 c. РО.75 d. P58.00 b. Рб.00 The activity rate for quality inspection is: с. Рб.00 d. P5.09 a. P5.29 b. P5.00arrow_forward
- Required Information The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 units of each product Its average cost per unit for each product at this level of activity are given below. Beta $24 32 Direct materials Direct labor Variable manufacturing overhead Traceable fFixed manufacturing overhead Variable selling expenses Common fixed expenses %2442 42 34 31. Total cost per unit $173 607$ The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. Assume that Cane normally produces and sells 59,000 Betas per year. What is the financial advantage (disadvantage) of iscontinuing the Beta product line? o search 近arrow_forward! Required information [The following information applies to the questions displayed below.] Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow: Direct Labor- Hours per unit Rims Posts 0.20 0.70 Annual Production 21,000 units 79,000 units Additional information about the company follows: a. Rims require $19 in direct materials per unit, and Posts require $15. b. The direct labor wage rate is $15 per hour. c. Rims are more complex to manufacture than Posts and they require special equipment. d. The ABC system has the following activity cost pools: Estimated Activity Activity Cost Pool Machine setups Special processing General factory Activity Measure Number of setups Machine-hours Estimated Overhead Cost Rims $ 34,760 $ 136,670 Direct labor-hours $ 819,000 110 1,000 4,200 Posts 90 0 Total 200 55,300 1,000 59,500 2. Determine the unit product cost of each product according to the ABC system. (Do not round intermediate…arrow_forwardSage Corporation manufactures two products with the following characteristics. Product 1 Product 2 Unit Contribution Margin $47.25 $36.70 Machine Hours Required for Production Contribution margin per unit of limited resource Sage Corporation should produce. 0,15 hours If Sage's machine hours are limited to 2,000 per month, determine which product it should produce. 0.10 hours $ Product 11 Product 2arrow_forward
- Sage Corporation manufactures two products with the following characteristics. Unit Contribution Machine Hours Margin Required for Production Product 1 $46.80 0.15 hours Product 2 $36.10 0.10 hours If Sage's machine hours are limited to 2,000 per month, determine which product it should produce. Product 1 Product 2 295 $ 370 Contribution margin per unit of limited resource Sage Corporation should produce Product 2 %24arrow_forwardi RequIred Informatlon The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 units of each product. Its average cost per unit for each product at this level of activity are given below Alpha $ 42 42 Beta $ 24 Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses 24 34 31 27 Total cost per unit $173 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 11. How many pounds of raw material are needed to make one unit of each of the two products? Beta Pounds of raw materials per unit of 15 e to search 五 。 F4 F5 F7 F8 F10arrow_forwardRequired Informatlon [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 units of each product. Its average cost per unit for each product at this level of activity are given below Alpha Beta $ 24 Direct materials 3. 24 Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses 42 34 27 Total cost per unit $173 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 3. Assume that Cane expects to produce and sell 99,000 Alphas during the current year. One of Cane's sales representatives has found a new customer who is willing to buy…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax CollegeCornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage LearningEssentials of Business Analytics (MindTap Course ...StatisticsISBN:9781305627734Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. AndersonPublisher:Cengage Learning
- Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Essentials of Business Analytics (MindTap Course ...
Statistics
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning