IceeBee61 Manufacturers uses activity based costing model to compute product costs. During the coming year the company expects to produce 25000 units of Reg model and 6500 units of Super Model. Data on these products is as follows: Cost Center Cost Driver Level of activity Estimated overheads (K) Reg Super Total Labour Direct labour hours 8000 2000 10000 80000 Machine setup Number of set ups 500 900 1400 420000 Product testing Number of tests 6400 1600 8000 600000 General factory Machine hours 30000 15000 45000 90000 Total 1190000 In a tabular format, calculate the Overhead absorption rates for each cost center In a tabular format, calculate the total overhead cost assigned to each product Calculate the overhead cost to be included in the cost of each unit.
IceeBee61 Manufacturers uses activity based costing model to compute product costs. During the coming year the company expects to produce 25000 units of Reg model and 6500 units of Super Model. Data on these products is as follows: Cost Center Cost Driver Level of activity Estimated overheads (K) Reg Super Total Labour Direct labour hours 8000 2000 10000 80000 Machine setup Number of set ups 500 900 1400 420000 Product testing Number of tests 6400 1600 8000 600000 General factory Machine hours 30000 15000 45000 90000 Total 1190000 In a tabular format, calculate the Overhead absorption rates for each cost center In a tabular format, calculate the total overhead cost assigned to each product Calculate the overhead cost to be included in the cost of each unit.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 11E: Ripley, Inc., costs products using a normal costing system. The following data are available for...
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IceeBee61 Manufacturers uses activity based costing model to compute product costs. During the coming year the company expects to produce 25000 units of Reg model and 6500 units of Super Model. Data on these products is as follows:
Cost Center |
Cost Driver |
Level of activity |
Estimated |
||
Reg |
Super |
Total |
|
||
Labour |
Direct labour hours |
8000 |
2000 |
10000 |
80000 |
Machine setup |
Number of set ups |
500 |
900 |
1400 |
420000 |
Product testing |
Number of tests |
6400 |
1600 |
8000 |
600000 |
General factory |
Machine hours |
30000 |
15000 |
45000 |
90000 |
Total |
|
|
|
|
1190000 |
- In a tabular format, calculate the Overhead absorption rates for each cost center
- In a tabular format, calculate the total overhead cost assigned to each product
- Calculate the overhead cost to be included in the cost of each unit.
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