Activity Cost Pools, Activity Rates, and Product Costs usingActivity-Based Costing
Caldwell Home Appliances Inc. is estimating the activity costassociated with producing ovens and refrigerators. The indirectlabor can be traced into four separate activity pools, based ontime records provided by the employees. The budgeted activity costand activity-base information are provided as follows:
Activity Activity Pool Cost Activity Base Procurement $144,480 Number of purchase orders Scheduling 6,300 Number of production orders Materials handling 30,420 Number of moves Product development 23,400 Number of engineering changes Total cost $204,600
The estimated activity-base usage and unit information for twoproduct lines was determined as follows:
Number of
Purchase Orders Number of
Production Orders Number of
Moves Number of
Engineering Change Orders
Units Ovens 570 230 460 130 1,390 Refrigerators 550 120 320 50 1,040 Totals 1,120 350 780 180 2,430
a. Determine the activity rate for eachactivity cost pool. If required, round your answers to the nearestdollar.
Procurement (per purchase order) $ Scheduling (per production order) $ Materials handling (per move) $ Product development (per engineering change order) $
b. Determine the activity-based cost per unitof each product. Round your answers to the nearest cent.
Ovens $ per unit Refrigerators $ per unit
Activity Cost Pools, Activity Rates, and Product Costs usingActivity-Based Costing
Caldwell Home Appliances Inc. is estimating the activity costassociated with producing ovens and refrigerators. The indirectlabor can be traced into four separate activity pools, based ontime records provided by the employees. The budgeted activity costand activity-base information are provided as follows:
| Activity | Activity Pool Cost | Activity Base | |||
| Procurement | $144,480 | Number of purchase orders | |||
| Scheduling | 6,300 | Number of production orders | |||
| Materials handling | 30,420 | Number of moves | |||
| Product development | 23,400 | Number of engineering changes | |||
| Total cost | $204,600 | ||||
The estimated activity-base usage and unit information for twoproduct lines was determined as follows:
| Number of Purchase Orders | Number of Production Orders | Number of Moves | Number of Engineering Change Orders | Units | ||||||||||||
| Ovens | 570 | 230 | 460 | 130 | 1,390 | |||||||||||
| Refrigerators | 550 | 120 | 320 | 50 | 1,040 | |||||||||||
| Totals | 1,120 | 350 | 780 | 180 | 2,430 | |||||||||||
a. Determine the activity rate for eachactivity cost pool. If required, round your answers to the nearestdollar.
| Procurement (per purchase order) | $ |
| Scheduling (per production order) | $ |
| Materials handling (per move) | $ |
| Product development (per engineering change order) | $ |
b. Determine the activity-based cost per unitof each product. Round your answers to the nearest cent.
| Ovens | $ per unit |
| Refrigerators | $ per unit |
Related questions
#20
Panamint Systems Corporation is estimating activity costsassociated with producing disk drives, tapes drives, and wiredrives. The indirect labor can be traced to four separate activitypools. The budgeted activity cost and activity base data by productare provided below.
Activity | Activity Base | |||||
| Procurement | $ 370,000 | Number ofpurchase orders | ||||
| Scheduling | 250,000 | Number ofproduction orders | ||||
| Materials handling | 500,000 | Number ofmoves | ||||
| Product development | 730,000 | Number ofengineering changes | ||||
| Production | 1,500,000 | Machinehours | ||||
| ? Number of | ? Number of ProductionOrders | ? ? Number | ? ? Number of Engineering | ? ? ? Machine | ? ? Number | |
| Disk drives | 4,000 | 300 | 1,400 | 10 | 2,000 | 2,000 |
| Tape drives | 4,000 | 150 | 800 | 10 | 8,000 | 4,000 |
| Wire drives | 12,000 | 800 | 4,000 | 25 | 10,000 | 2,500 |
?
?
Determine the activity-based cost for each wire drive unit.
| a. | $204.13 | |
| b. | $394.12 | |
| c. | $744.06 | |
| d. | $173.51 |
#26
Sifton Electronics Corporation manufactures and assembleselectronic motor drives for video cameras. The company assemblesthe motor drives for several accounts. The process consists of alean cell for each customer. The following information relates onlyto one customer's lean cell for the coming year. Projected laborand overhead, $7,370,000; materials costs, $28 per unit. Plannedproduction included 4,000 hours to produce 27,500 motor drives.Actual production for August was 1,600 units, and motor drivesshipped amounted to 1,380 units.
?
From the foregoing information, determine the amount of theconversion costs charged to Raw and In Process Inventory duringAugust.
| a. | $408,480 | |
| b. | $428,800 | |
| c. | $473,600 | |
| d. | $369,840 |
#29
Which of the following is characteristic of a lean productionlayout?
| a. | Decentralized maintenance and small production batches | |
| b. | Decemtralized maintenance and organization around processes | |
| c. | Organization around processes and small production batches | |
| d. | Large production batches and organization around processes. |
#32
Conan Electronics Corporation manufactures and assembleselectronic motor drives for video cameras. The company assemblesthe motor drives for several accounts. The process consists of alean cell for each customer. The following information relates onlyto one customer's lean cell. For the year, planned labor andoverhead was $80,000,000; materials costs, $25 per unit. Plannedproduction included 9,600 hours to produce 76,800 motor drives.Actual production for the month of August was 5,200 units, andmotor drives shipped amounted to 5,040 units. From the foregoinginformation, determine the budgeted cell conversion cost perhour.
| a. | $8,333 | |
| b. | $800 | |
| c. | $7,200 | |
| d. | $8,025 |
#34
Sifton Electronics Corporation manufactures and assembleselectronic motor drives for video cameras. The company assemblesthe motor drives for several accounts. The process consists of alean cell for each customer. The following information relates onlyto one customer's lean cell for the coming year. Projected laborand overhead, $7,370,000; materials costs, $28 per unit. Plannedproduction included 4,000 hours to produce 27,500 motor drives.Actual production for August was 1,600 units, and motor drivesshipped amounted to 1,380 units.
?
From the foregoing information, determine the production coststransferred to Cost of Goods Sold during August.
| a. | $369,840 | |
| b. | $428,800 | |
| c. | $408,480 | |
| d. | $473,600 |
PLEASE HELP!!!!
