ACC 312 Study Guide - Midterm Guide: Fixed Cost, Scatter Plot, Contribution Margin
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Kubin Companyâs relevant range of production is 25,000 to 33,500 units. When it produces and sells 29,250 units, its average costs per unit are as follows:
Average Cost per Unit | ||
Direct materials | $ | 8.50 |
Direct labor | $ | 5.50 |
Variable manufacturing overhead | $ | 3.00 |
Fixed manufacturing overhead | $ | 6.50 |
Fixed selling expense | $ | 5.00 |
Fixed administrative expense | $ | 4.00 |
Sales commissions | $ | 2.50 |
Variable administrative expense | $ | 2.00 |
Required:
2. Assume the cost object is the Manufacturing Department and that its total output is 29,250 units.
a. How much total manufacturing cost is directly traceable to the Manufacturing Department?
b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department?
2. Assume the cost object is the Manufacturing Department and that its total output is 29,250 units.
a. How much total manufacturing cost is directly traceable to the Manufacturing Department? (Round per unit values to 2 decimal places.)
b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department?
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3. Assume the cost object is the companyâs various sales representatives. Furthermore, assume that the company spent $117,000 of its total fixed selling expense on advertising and the remainder of the total fixed selling expense comprised the fixed portion of the company's sales representativesâ compensation.
a. When the company sells 29,250 units, what is the total direct selling expense that can be readily traced to individual sales representatives?
b. When the company sells 29,250 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?
3. Assume the cost object is the companyâs various sales representatives. Furthermore, assume that the company spent $117,000 of its total fixed selling expense on advertising and the remainder of the total fixed selling expense comprised the fixed portion of the company's sales representativesâ compensation.
a. When the company sells 29,250 units, what is the total direct selling expense that can be readily traced to individual sales representatives? (Round per unit value to 2 decimal places.)
b. When the company sells 29,250 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?
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Student Name:_____________________________________ | |||||||||
Activity-Based Costing | Requirements: | FILL IN THE â¦. | "Blanks" | ||||||
MOH costs: | Rent, Utilities,Insuranceâ¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦ | $ 600,000 | |||||||
Quality control person assigned to batchrunsâ¦â¦â¦â¦â¦â¦â¦ | 36,000 | ||||||||
Machine maintenance costâ¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦.. | 70,000 | ||||||||
IndirectMaterialsâ¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦. | 44,000 | ||||||||
Indirect Labor:Supervisorsâ¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦â¦.. | 30,000 | ||||||||
$ 780,000 | |||||||||
Other data: | Couches | Chairs | Ottomans | Totals | |||||
Number of machine hours | 430 | 225 | 45 | 700 | Machine hrs | ||||
Number of batch runs | 260 | 180 | 60 | 500 | Batch runs | ||||
Number of designs | 9 | 4 | 2 | 15 | designs | ||||
Sq ft of plant occupancy | 40,000 | 18,000 | 2,000 | 60,000 | Sq ft of Plant | ||||
Number of units made | 3,000 | 1,800 | 1,200 | 6,000 | units | ||||
Sq ft of leather (DM) used | 72,000 | 25,000 | 3,000 | 100,000 | sq ft of leather | ||||
Requirement #1: Allocate MOHutilizing DL$ | MOH ratio | MOH allocation rate | |||||||
Calculate the Predetermined MOH allocation rate using DL$ as thecost driverâ¦..use the cells to the right for your calculations.After determining the MOH allocation rate, allocate MOH to allthree products below. Fill-in all blank cells. | |||||||||
Costs: | Couches | Chairs | Ottomans | Totals | |||||
Direct Materials | $ 116,000 | $ 48,000 | $ 12,000 | $ 176,000 | |||||
Direct Labor | 151,000 | 123,400 | 115,600 | 390,000 | |||||
Allocate MOH in these cells | |||||||||
Total Inventoriable Costs | |||||||||
Total Cost per unit (rounded) | |||||||||
Requirement #2: Allocate MOHwith Activity Based Costing. | |||||||||
ABC allocation information: | |||||||||
MOH Cost category | Activity Base Selected | Activity Measure | |||||||
Rent, Utilities, Insurance | |||||||||
Quality control person | |||||||||
Machine maintenance cost | |||||||||
Indirect Materials | |||||||||
Indirect Labor: Supervisors | |||||||||
Calculate Activity Base CostDrivers: Fill-in the blanks. | |||||||||
Cost category | MOH ratio | MOH allocation rate | |||||||
Rent, Utilities, Insurance | |||||||||
Quality control person | |||||||||
Machine maintenance cost | |||||||||
Indirect Materials | |||||||||
Indirect Labor: Supervisors | |||||||||
Update cost data | Couches | Chairs | Ottomans | Totals | |||||
Direct Materials | $ 116,000 | $ 48,000 | $ 12,000 | $ 176,000 | |||||
Direct Labor | 151,000 | 123,400 | 115,600 | 390,000 | |||||
Rent, Utilities, Insurance | |||||||||
Quality control person | |||||||||
Machine maintenance cost | |||||||||
Indirect Materials | |||||||||
Indirect Labor: Supervisors | |||||||||
Total Inventoriable Costs | |||||||||
Total Cost per unit | |||||||||
Requirement #3: Total CostComparison | |||||||||
Summarize your Total Cost per unit from Requirement 1 & 2.Assuming the company is a price setter, calculate the price perunit for both applications in order to achieve a 40% gross marginratio per product line. | |||||||||
Couches | Chairs | Ottomans | |||||||
Total Cost per unit utilizingDL$ (Req1) | |||||||||
Price per unit to achieve 40%gross margin | |||||||||
Total Cost per unit withABC | |||||||||
Price per unit to achieve 40%gross margin |