Urban Elite Cosmetics has used a traditional cost accounting system to apply quality-control costs uniformly to...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Urban Elite Cosmetics has used a traditional cost accounting system to apply quality-control costs uniformly to all products at a rate of 16 percent of direct-labor cost. Monthly direct-labor cost for Satin Sheen makeup is $113,000. In an attempt to more equitably distribute quality-control costs, management is considering activity-based costing. The monthly data shown in the following chart have been gathered for Satin Sheen makeup. Activity Cost Pool Incoming material inspection. In-process inspection. Product certification Cost Driver Type of material Number of units Per order Required: 1. Calculate the monthly quality-control cost to be assigned to the Satin Sheen product line under each of the following product- costing systems. Required 1 Required 2 Pool Rates $26.00 per type 0.32 per unit 145.00 per order a. Traditional system, which assigns overhead on the basis of direct-labor cost. b. Activity-based costing. 2. Does the traditional product-costing system overcost or undercost the Satin Sheen product line with respect to quality-control costs? By what amount? Complete this question by entering your answers in the tabs below. Traditional cyctom Quantity of Driver for Satin Sheen 23 types 48,000 units 40 orders Calculate the monthly quality-control cost to be assigned to the Satin Sheen product line under the Traditional product-costing system and the Activity-based product-costing system. Assigned Cost Urban Elite Cosmetics has used a traditional cost accounting system to apply quality-control costs uniformly to all products at a rate of 16 percent of direct-labor cost. Monthly direct-labor cost for Satin Sheen makeup is $113,000. In an attempt to more equitably distribute quality-control costs, management is considering activity-based costing. The monthly data shown in the following chart have been gathered for Satin Sheen makeup. Activity Cost Pool Incoming material inspection. In-process inspection. Product certification Cost Driver Type of material Number of units Per order Required: 1. Calculate the monthly quality-control cost to be assigned to the Satin Sheen product line under each of the following product- costing systems. Required 1 Required 2 Pool Rates $26.00 per type 0.32 per unit 145.00 per order a. Traditional system, which assigns overhead on the basis of direct-labor cost. b. Activity-based costing. 2. Does the traditional product-costing system overcost or undercost the Satin Sheen product line with respect to quality-control costs? By what amount? Complete this question by entering your answers in the tabs below. Traditional cyctom Quantity of Driver for Satin Sheen 23 types 48,000 units 40 orders Calculate the monthly quality-control cost to be assigned to the Satin Sheen product line under the Traditional product-costing system and the Activity-based product-costing system. Assigned Cost
Expert Answer:
Answer rating: 100% (QA)
Based on the information provided the monthly qualitycontrol cost to be assigned to the Satin Sheen ... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Stylish Manchester Ltd has used a traditional cost accounting system to apply quality control costs uniformly to all products at a rate of 16 per cent of direct labor cost. Monthly direct labor cost...
-
ABC costing Dr Strange Ltd produces premium bed linen. It uses a traditional cost accounting system to apply quality control costs uniformly to all products with a predetermined overhead rate of 16...
-
Discuss in your own words why internal auditors often fail to detect frauds. You should discuss a minimum of four reasons.
-
Research Lenovo's current performance relative to the performance of HP and Dell and comment on how well Chuanzhi's plans seem to be working.
-
On June 15, a newspaper columnist predicted that the coast of State X would be flooded on the following September 1. Relying on this pronouncement, Gullible quit his job and sold his property at a...
-
Verify that both the pressure and the vorticity field satisfy the Laplace equation for Stokes flow. Verify that the velocity field satisfies the biharmonic equation \[\begin{equation*}abla^{4}...
-
Portman Industries just paid a dividend of $2.16 per share. Portman expects dividends to grow by 12% over the next year. The next year, the dividend is expected to grow at a constant rate of 2.4% per...
-
Gitano Products operates a job - order costing system and applies overhead cost to jobs on the basis of direct materials used in production ( not on the basis of raw materials purchased ) . Its...
-
It seems that some countries like China may be developing hybrid HRM systems. What are some of the advantages and disadvantages of the hybrid HRM system?
-
Which radiation is the most dangerous?
-
company received a fixed asset as a donation and the market value of this fixed asset was$ 10,000. The depreciation rate of this asset is 20%pa. Asset was immediately put into use. The company sold...
-
Management Audit Management audits can drive organizational change by identifying opportunities for improvement. They foster accountability among managers by holding them responsible for their...
-
Explore the borrowing of funds to finance the acquisition. How does allocation impact financial statements and performance measurement? If a company purchases a piece of land by obtaining a loan for...
-
How do you allocate joint costs in accounting? In developing forecasts of expenses the analyst must take into consideration that expenses can be broken down into components. What is the difference...
-
A regular hexagon whose center is at the origin has one vertex on the positive y-axis at a distance of 3.5 feet from the center. Find the polar coordinates of the vertices and find the distance...
-
2. The counting rates listed below were obtained when the activity of a certain radioactive sample was measured at different times. Plot the decay curve on semilog paper and determine the half-lives...
-
Consider the reaction of acetic acid in water CH 3 CO 2 H(aq) + H 2 O(l) CH3CO 22 (aq) + H 3 O + (aq) where Ka 5 1.8 3 1025. a. Which two bases are competing for the proton? b. Which is the stronger...
-
How is the concept of product costing applied in service industry firms?
-
Winchester Chemicals uses a Joint process to produce VX4, a chemical used in the manufacture of paints and varnishes: HD10, a chemical used in household cleaning products; and FT5, a by-product that...
-
Define the term economic value added. How does it differ from residual income?
-
Describe the role of a paralegal in a family law practice.
-
Define family law and identify the kinds of issues that are addressed in a family law practice.
-
Describe the characteristics of effective fee agreements, and identify the various types of fee agreements that may be used in divorce cases.
Study smarter with the SolutionInn App