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ACIS 2116 Midterm: Chapter 4 In-Class Problems Solutions

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tanox42
15 Feb 2020
School
Virginia Tech
Department
Accounting and Information Systems
Course
ACIS 2116
Professor
Jason Sharp

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Document Summary

In-class problem #1 (the following problem is not from this textbook) Precision manufacturing inc. (pmi) makes two types of industrial component parts the ex300 and the. It annually produces 62,000 units of ex300 and 12,700 units of tx500. The company"s traditional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labor dollars as the allocation base. Additional information relating to the company"s two product lines is shown below: The company is considering implementing an activity-based costing system that distributes all of its manufacturing overhead to four activities as shown below: Compute the plantwide overhead rate that would be used in the company"s traditional cost system. (round your answer to 2 decimal places. ) Using the plantwide rate, compute the overhead that would be allocated to the two products. (overhead allocated and overhead applied have the same meaning) 1-c. compute the product cost per unit for each of the two products under the traditional system.

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Related Questions

Greenwood Company manufactures two products—15,000 units of Product Y and 7,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z:

Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity
Machining Machine-hours $ 221,100 11,000 MHs
Machine setups Number of setups $ 107,100 210 setups
Production design Number of products $ 85,000 2 products
General factory Direct labor-hours $ 251,000 10,000 DLHs

Activity Measure Product Y Product Z
Machining 7,100 3,900
Number of setups 60 150
Number of products 1 1
Direct labor-hours 8,100 1,900

Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z? (Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount.)


Greenwood Company manufactures two products—15,000 units of Product Y and 7,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z:


Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity
Machining Machine-hours $ 221,100 11,000 MHs
Machine setups Number of setups $ 107,100 210 setups
Production design Number of products $ 85,000 2 products
General factory Direct labor-hours $ 251,000 10,000 DLHs


Activity Measure Product Y Product Z
Machining 7,100 3,900
Number of setups 60 150
Number of products 1 1
Direct labor-hours 8,100 1,900

2.
Using the plantwide overhead rate, how much manufacturing overhead cost is allocated to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.)

3.
What is the activity rate for the Machining activity cost pool? (Round your answer to 2 decimal places.)

4.
What is the activity rate for the Machine Setups activity cost pool? (Round your answer to 2 decimal places.)




5.
What is the activity rate for the Product Design activity cost pool? (Round your answer to 2 decimal places.)

Greenwood Company manufactures two products—15,000 units of Product Y and 7,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z:


Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity
Machining Machine-hours $ 221,100 11,000 MHs
Machine setups Number of setups $ 107,100 210 setups
Production design Number of products $ 85,000 2 products
General factory Direct labor-hours $ 251,000 10,000 DLHs


Activity Measure Product Y Product Z
Machining 7,100 3,900
Number of setups 60 150
Number of products 1 1
Direct labor-hours 8,100 1,900

2.
Using the plantwide overhead rate, how much manufacturing overhead cost is allocated to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.)

3.
What is the activity rate for the Machining activity cost pool? (Round your answer to 2 decimal places.)

4.
What is the activity rate for the Machine Setups activity cost pool? (Round your answer to 2 decimal places.)

5.
What is the activity rate for the Product Design activity cost pool? (Round your answer to 2 decimal places.)


6.
What is the activity rate for the General Factory activity cost pool? (Round your answer to 2 decimal places.)


.Which of the four activities is a batch-level activity? Machining activityGeneral factory activityProduct design activityMachine setups activity

Machining activity
General factory activity
Product design activity
Machine setups activity

8.Which of the four activities is a product-level activity? Machine setups activityMachining activityGeneral factory activityProduct design activity

Product design activity
Machining activity
Machine setups activity
General factory activity

9.
Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y? (Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount.)


Total manufacturing overhead cost

.
10.Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z? (Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount.)


Total manufacturing overhead cost

11.
Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product Y and Product Z? (Round your answers to 2 decimal places.)

Product Y Product Z
Total overhead cost
%
%
12.
Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z? (Round your answers to 2 decimal places.)

Machining cost
%
%

13.
Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z? (Round your answers to 2 decimal places.)

Machine setups cost
%
%

14.
Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z? (Round your answers to 2 decimal places.)
Product Y Product Z
Product design cost
%
%

15.
Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z? (Round your answers to 2 decimal places.)

General factory cost product Y% product z%

Hickory Company manufactures two products—15,000 units ofProduct Y and 7,000 units of Product Z. The company uses aplantwide overhead rate based on direct labor-hours. It isconsidering implementing an activity-based costing (ABC) systemthat allocates all of its manufacturing overhead to four costpools. The following additional information is available for thecompany as a whole and for Products Y and Z: (The totalestimated overhead cost may not agree with the sum of allocatedoverhead costs to each product.)

Activity CostPool ActivityMeasure Estimated Overhead Cost Expected Activity
Machining Machine-hours $ 227,700 11,000 MHs
Machine setups Number of setups $ 153,900 270 setups
Productiondesign Number of products $ 91,000 2 products
General factory Direct labor-hours $ 257,000 10,000 DLHs

ActivityMeasure Product Y Product Z
Machining 7,700 3,300
Number ofsetups 60 210
Number ofproducts 1 1
Directlabor-hours 8,700 1,300

Required:
Using the ABC system, how muchtotal manufacturing overhead cost would be assigned to ProductY?(Round your intermediate calculations to 2 decimal placesand final answers to the nearest dollar amount.)

Total manufacturingoverhead cost $