Redfern Audio produces audio equipment including headphones. At the Campus Facility, it produces two wireless models, Standard and Enhanced, which differ both in the materials and components used and in the labor skill required. Data for the Campus Plant for the third quarter follow. Units produced Machine-hours Direct labor-hours Direct materials costs Direct labor costs Manufacturing overhead Total costs Standard 29,700 17,820 22,275 $ 594,000 356,400 Enhanced 9,900 11,880 22,275 $ 891,000 757,350 Total 39,600 29,700 44,550 $ 1,485,000 1,113,750 730,620 $ 3,329,370 Required: Compute the predetermined overhead rate assuming that Redfern Audio uses direct labor costs to allocate overhead costs. Note: Round your answer to 2 decimal places.

Redfern Audio produces audio equipment including headphones. At the Campus Facility, it produces two wireless models, Standard and Enhanced, which differ both in the materials and components used and in the labor skill required. Data for the Campus Plant for the third quarter follow. Units produced Machine-hours Direct labor-hours Direct materials costs Direct labor costs Manufacturing overhead Total costs Standard 29,700 17,820 22,275 $ 594,000 356,400 Enhanced 9,900 11,880 22,275 $ 891,000 757,350 Total 39,600 29,700 44,550 $ 1,485,000 1,113,750 730,620 $ 3,329,370 Required: Compute the predetermined overhead rate assuming that Redfern Audio uses direct labor costs to allocate overhead costs. Note: Round your answer to 2 decimal places.

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Description: Redfern Audio produces audio equipment including headphones. At the CampusFacility, it produces two wireless models, Standard and Enhanced, which differboth in the materials and components used and in the labor skill required. Data forthe Campus Pla

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 27E: Plata Company has identified the following overhead activities, costs, and activity drivers for the...

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Redfern Audio produces audio equipment including headphones. At the Campus Facility, it produces two wireless models, Standard and Enhanced, which differ both in the materials and components used and in the labor skill required. Data for the Campus Plant for the third quarter follow. Units produced Machine-hours Direct labor-hours Direct materials costs Direct labor costs Manufacturing overhead Total costs Standard 24,000 14,400 18,000 480,000 288,000 Predetermined overhead rate Enhanced 8,000 9,600 18,000 $ 720,000 612,000 Total 1% of materials cost 32,000 24,000 36,000 Required: Compute the predetermined overhead rate assuming that Redfern Audio uses direct material costs to allocate overhead costs. $ 1,200,000 900,000 864,000 $ 2,964,000
Redfern Audio produces audio equipment including headphones. At the Campus Facility, it produces two wireless models, Standard and Enhanced, which differ both in the materials and components used and in the labor skill required. Data for the Campus Plant for the third quarter follow. Units produced Machine-hours Direct labor-hours Direct materials costs Direct labor costs Manufacturing overhead Total costs Standard 24,000 14,400 18,000 $ 480,000 288,000 Predetermined overhead rate Enhanced 8,000 9,600 18,000 $ 720,000 612,000 Total per direct labor hour 32,000 24,000 36,000 Required: Compute the predetermined overhead rate assuming that Redfern Audio uses direct labor-hours to allocate overhead costs. $ 1,200,000 900,000 864,000 $ 2,964,000
Redfern Audio produces audio equipment including headphones. At the Campus Facility, it produces two wireless models, Standard and Enhanced, which differ both in the materials and components used and in the labor skill required. Data for the Campus Plant for the third quarter follow. Units produced Machine-hours Direct labor-hours Direct materials costs Direct labor costs Manufacturing overhead Total costs Standard 24,000 14,400 18,000 $530,400 330,000 Product costs per unit Standard Enhanced 8,000 9,600 18,000 $ 795,600 675,000 Required: a. Compute the individual product costs per unit assuming that Redfern Audio uses direct labor costs to allocate overhead to the products. b. Compute the individual product costs per unit assuming that Redfern Audio uses material costs to allocate overhead to the products. Enhanced Total Required A Required B Compute the individual product costs per unit assuming that Redfern Audio uses direct labor costs to allocate overhead to the products. Note: Do…
Redfern Audio produces audio equipment including headphones. At the Campus Facility, it produces two wireless models, Standard and Enhanced, which differ both in the materials and components used and in the labor skill required. Data for the Campus Plant for the third quarter follow. Units produced Machine-hours Direct labor-hours Direct materials costs Direct labor costs Manufacturing overhead Total costs Standard 24,000 14,400 18,000 $ 480,000 288,000 Enhanced 8,000 9,600 18,000 $ 720,000 612,000 Total 32,000 24,000 36,000 $ 1,200,000 900,000 864,000 $ 2,964,000 Required: a. Compute the individual product costs per unit assuming that Redfern Audio uses the number of units to allocate overhead to the products. b. Compute the individual product costs per unit assuming that Redfern Audio uses direct labor hours to allocate overhead to the products. c. Compute the individual product costs per unit assuming that Redfern Audio uses machine hours to allocate overhead to the products.
Redfern Audio produces audio equipment including headphones. At the Campus Facility, it produces two wireless models, Standard and Enhanced, which differ both in the materials and components used and in the labor skill required. Data for the Campus Plant for the third quarter follow. Standard Enhanced Total Units produced 25,500 8,500 34,000 Machine-hours 15,300 10,200 25,500 Direct labor-hours 19,125 19,125 38,250 Direct materials costs $ 510,000 $ 765,000 $ 1,275,000 Direct labor costs 306,000 650,250 956,250 Manufacturing overhead 841,500 Total costs Compute the predetermined overhead rate assuming that Redfern Audio uses direct labor costs to allocate overhead costs. Note: Round your answer to 2 decimal places. Predetermined overhead rate % of direct labor cost
ABC; pricingChester Inc. has identified activity centers to which overhead costs are assigned. The cost pool amounts for these centers and their selected activity drivers for the year follow. Activity Centers Costs Activity Drivers Utilities $1,440,000 90,000 machine hours Scheduling and setup 1,310,400 1,170 setups Material handling 3,072,000 2,400,000 pounds of material The company’s products and other operating statistics follow. Product A Product B Product C Direct costs $96,000 $96,000 $108,000 Machine hours 45,000 15,000 30,000 Number of setups 195 570 405 Pounds of material 750,000 450,000 1,200,000 Number of units produced 60,000 30,000 90,000 Direct labor hours 48,000 27,000 75,000 a. Calculate the unit cost for each product using the appropriate cost drivers for each product.Note: Round your final answers to two decimal places (i.e. round $4.355 to $4.36). Product A Product B Product C Unit cost Answer Answer Answer b.…
ABC; pricingChester Inc. has identified activity centers to which overhead costs are assigned. The cost pool amounts for these centers and their selected activity drivers for the year follow. Activity Centers Costs Activity Drivers Utilities $1,440,000 90,000 machine hours Scheduling and setup 1,310,400 1,170 setups Material handling 3,072,000 2,400,000 pounds of material The company’s products and other operating statistics follow. Product A Product B Product C Direct costs $96,000 $96,000 $108,000 Machine hours 45,000 15,000 30,000 Number of setups 195 570 405 Pounds of material 750,000 450,000 1,200,000 Number of units produced 60,000 30,000 90,000 Direct labor hours 48,000 27,000 75,000 b. Before it installed an ABC system, Chester used a traditional costing system that allocated factory overhead to products using direct labor hours. The firm operates in a competitive market and sets product prices at cost plus a 25 percent markup.…
Redfern Audio produces audio equipment including headphones. At the Campus Facility, it produces two wireless models, Standard and Enhanced, which differ both in the materials and components used and in the labor skill required. Data for the Campus Plant for the third quarter follow. Standard Enhanced Total Units produced 24,000 8,000 32,000 Machine-hours 14,400 9,600 24,000 Direct labor-hours 18,000 18,000 36,000 Direct materials costs $ 523,200 $ 784,800 $ 1,308,000 Direct labor costs 324,000 666,000 990,000 Manufacturing overhead 950,400 Total costs $ 3,248,400 Required: Compute the individual product costs per unit assuming that Redfern Audio uses direct labor costs to allocate overhead to the products. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Standard Enhanced Product costs per unit Compute the individual product costs per unit assuming that Redfern Audio…
Angle Max Industries produces a product which goes through two operations, Assembly and Finishing, before it is ready to be shipped. Next year's expected costs and activities are shown below. Direct labor hours Machine hours Overhead costs Multiple Choice Assume that the Assembly Department allocates overhead using a plantwide overhead rate based on machine hours. How much total overhead will be assigned to a product that requires 2 direct labor hour and 3.30 machine hours in the Assembly Department, and 4.50 direct labor hours and 0.4 machine hours in the Finishing Department? O$17.60. Assembly 180,000 DLH 380,000 MH $380,000 $20.40. Finishing 148,000 DLH 91, 200 MH $562, 400
In Class Assignment 1 AlSaleh has assigned overhead on a plantwide basis to its two products (Tables and Chairs) using direct labor hours which are estimated to be 200,000 for the current year. The company has decided to experiment with activity-based costing and has created two activity cost pools and related activity cost drivers. These two cost pools are Ordering and receiving (cost driver is Purchase orders) and machine setup (cost driver is number of setups). Overhead allocated to the ordering and receiving cost pool is $200,000, and $800,000 is allocated to the machine setup cost pool. Additional information related to these pools is as follows: Cost Drivers Tables Chairs Purchase orders 30,000 10,000 number of setups 10,000 30,000 a. Determine the amount of overhead assigned to the table product line and the chairs product line using activity-based costing. b. What amount of overhead would be assigned to the tables and chairs product lines using the traditional approach,…
Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment Number of setups Ordering costs Number of orders Machine costs Receiving Direct materials Direct labor Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Units completed Direct labor hours Number of setups Number of orders $627,000 481,000 16,200 6,400 370 5,800 24,900 3,700 The company's normal activity is 7,900 direct labor hours. Machine hours Receiving hours Required: Model A Model B $482,510 372,000 864,000 410,000 Receiving hours Model A Machine hours $ del B Model B Unit Cost $836,000 497,000 8,500 1,500 240 1. Determine the unit cost for each model using direct labor hours to apply overhead. Round intermediate calculations and final answers to nearest cent. 12,800 18,300 6,300 610 18,600 43,200 10,000 2. Determine the unit cost for…
Approximately Relevant Silven Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Setting up equipment $138,000 Ordering materials 10,200 Machining 92,400 Receiving 18,480 Silven produces two models of cell phones with the following expected activity demands: Model X Model Y 5,000 80 200 Units completed Number of setups Number of orders Machine hours Receiving hours Required: 6,600 385 Activity Driver Activity Capacity Number of setups Number of orders Machine hours Receiving hours 10,000 40 400 4,950 770 120 600 11,550 1,155