Churchill Products is considering updating its cost system to an activity-based costing system and is interested...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Churchill Products is considering updating its cost system to an activity-based costing system and is interested in understanding the effects. The company's cost accountant has identified three overhead cost pools along with appropriate cost drivers for each pool. Cost Pools Utilities $ Scheduling and setup Material handling Costs 280,000 300,000 820,000 Activity Drivers 56,000 machine-hours 600 setups 1,640,000 pounds of material The company manufactures three models of water basins (Oval, Round, and Square). The plans for production for the next year and the budgeted direct costs and activity by product line are as follows. Total direct costs (material and labor) Total machine-hours Total number of setups Total pounds of material Total direct labor-hours Number of units produced Required: Oval Products Round Square $ 90,000 $ 30,000 60 70,000 $ 80,000 8,000 300 18,000 240 490,000 3,000 320,000 2,000 830,000 5,000 3,800 1,800 6,500 a. The current cost accounting system charges overhead to products based on direct labor-hours. What unit product costs will be reported for the three products if the current cost system continues to be used? b. What are the cost driver rates for the three cost pools identified by the cost accountant? c. What unit product costs will be reported for the three products if the ABC system suggested by the cost accountant's classification of cost pools is used? Complete this question by entering your answers in the tabs below. Required A Required B Required C The current cost accounting system charges overhead to products based on direct labor-hours. What unit product costs will be reported for the three products if the current cost system continues to be used? (Do not round intermediate calculations. Round "Per unit cost" answers to 2 decimal places.) Total cost Per unit cost Oval Round Square Churchill Products is considering updating its cost system to an activity-based costing system and is interested in understanding the effects. The company's cost accountant has identified three overhead cost pools along with appropriate cost drivers for each pool. Cost Pools Utilities $ Scheduling and setup Material handling Costs 280,000 300,000 820,000 Activity Drivers 56,000 machine-hours 600 setups 1,640,000 pounds of material The company manufactures three models of water basins (Oval, Round, and Square). The plans for production for the next year and the budgeted direct costs and activity by product line are as follows. Total direct costs (material and labor) Total machine-hours Total number of setups Total pounds of material Total direct labor-hours Number of units produced Required: Oval Products Round Square $ 90,000 $ 30,000 60 70,000 $ 80,000 8,000 300 18,000 240 490,000 3,000 320,000 2,000 830,000 5,000 3,800 1,800 6,500 a. The current cost accounting system charges overhead to products based on direct labor-hours. What unit product costs will be reported for the three products if the current cost system continues to be used? b. What are the cost driver rates for the three cost pools identified by the cost accountant? c. What unit product costs will be reported for the three products if the ABC system suggested by the cost accountant's classification of cost pools is used? Complete this question by entering your answers in the tabs below. Required A Required B Required C The current cost accounting system charges overhead to products based on direct labor-hours. What unit product costs will be reported for the three products if the current cost system continues to be used? (Do not round intermediate calculations. Round "Per unit cost" answers to 2 decimal places.) Total cost Per unit cost Oval Round Square
Expert Answer:
Related Book For
Fundamentals of Cost Accounting
ISBN: 978-1259565403
5th edition
Authors: William Lanen, Shannon Anderson, Michael Maher
Posted Date:
Students also viewed these accounting questions
-
destroyed-and completely jumbled. Rapid Electronics has hired you to help figure out the missing pieces of the accounting puzzle. Assume that the Raw Materials Inventory contains only direct...
-
Churchill Products is considering updating its cost system to an activity-based costing system and is interested in understanding the effects. The company's cost accountant has identified three...
-
1.The purpose of using a balanced scorecard is for: Multiple Choice A.companies to make sure their business activities align with strategy. B.companies to compare themselves with their competitors....
-
Fit and Fantastic produces and sells a range of fitness equipment. Its capital expenditure for the current year of new plant was $130 000, and dividends paid were $20 000. Current liabilities and...
-
What are the core principles of Zero Trust Security Architecture, and how can organizations implement micro-segmentation and strict identity verification to reduce the risk of lateral movement in...
-
Ozarch Ltd is in the process of preparing direct labour and factory overhead budgets for the year ending 30 June 2025. Relevant data are set out below. Required (a) Prepare the direct labour budget...
-
Give two reasons stockholders might be indifferent between owning the stock of a firm with volatile cash flows and that of a firm with stable cash flows.
-
Fanshawe college Course Code : MGMT 6147 : Trends in Management & Leadership Module & Case: #10: Motivated reasoning, leadership, and team performance. 1) Please provide a brief summary of the case....
-
How is the Federal Reserve designed to be independent of the rest of the government? Explain.
-
13) Using a mid-year convention and the assumptions below, calculate enterprise value (S in millions) Assumptions FCF 2013E FCF 2014E FCF 2015E FCF 2016E FCF 2017E EBITDA 2017E A. $1,624 million B....
-
One of the key distinctions made in the analysis of the Solow growth model is between changes in levels and changes in growth rates. How does an increase in the saving rate change the steady-state...
-
Aunt Mary has 11 ounces of gold. She would like to give the gold to her nieces, P1, and P2. Mary decides she wants P1 and P2 to play an alternating offers bargaining game in order to determine how...
-
3. The following conditions exist in the foreign exchange market: Current spot rate: $1.80/pound Annualized interest rate on 90-day dollar-denominated bonds: 8% (2% for 90 days) Annualized interest...
-
A travel agency has recently lost several medium-sized and large corporate customers due to complaints about poor customer service. The management team of the travel agency decided to appoint a team...
-
Briefly discuss the cost of quality theories each of these men proposed: Crosby, Juran, and Deming.
-
When you weigh yourself on good old terra firma (solid ground), your weight is 142 lb. In an elevator your apparent weight is 121 lb. What are the direction and magnitude of the elevator's...
-
Show that \(\mu_{2}^{\prime}\) and, hence, \(\sigma^{2}\) do not exist for the probability density of Exercise 5.6. Data From Exercise 5.6 5.6 Given the probability density f(x) = -
-
Find \(\mu\) for the distribution of the satisfactory service of Exercise 5.10. Data From Exercise 5.10 5.10 The length of satisfactory service (years) provided by a certain model of laptop computer...
-
Find \(\mu\) and \(\sigma\) for the distribution of the phase error of Exercise 5.9. Data From Exercise 5.9 5.9 Let the phase error in a tracking device have probabil- ity density f(x) = (9) = { o...
Study smarter with the SolutionInn App