Windsor Company uses activity-based costing to determine product costs. Some of the entries have been completed to
Question:
Windsor Company uses activity-based costing to determine product costs. Some of the entries have been completed to the manufacturing overhead account for the current year, as shown by entry (a) below:
Manufacturing Overhead | ||||
(a) | 2,302,000 | |||
Required:
1. What does entry (a) represent?
multiple choice
Overhead applied or,
Machine-hours or,
Actual manufacturing overhead cost incurred
2. At the beginning of the year, the company made the following estimates of cost and activity for its five activity cost pools:
Activity Cost Pool | Activity Measure | Estimated Overhead Cost | Expected Activity | |||
Labour related | Direct labour-hours | $ | 592,000 | 37,000 | DLHs | |
Purchase orders | Number of orders | 44,080 | 1,520 | orders | ||
Parts management | Number of part types | 363,000 | 398 | part types | ||
Board etching | Number of boards | 451,000 | 2,010 | boards | ||
General factory | Machine-hours | 670,320 | 79,800 | MHs | ||
Compute the activity rate (i.e., predetermined overhead rate) for each of the activity cost pools. (Note: Round your final answers to 1 decimal place).
Activity Cost Pool | Actual Activity |
Labour related | _________ per direct labour-hours |
Purchases orders | _________ per order |
Parts management | _________ per part type |
Board etching | _________ per board |
General factory | _________ per machine-hours |
3. During the year, actual activity was recorded as follows:
Activity Cost Pool | Actual Activity | |
Labour related | 40,300 | DLHs |
Purchase orders | 1,280 | orders |
Parts management | 418 | part types |
Board etching | 2,110 | boards |
General factory | 81,000 | MHs |
Determine the amount of manufacturing overhead cost applied to production for the year. (Note: Round intermediate calculations to 1 decimal place and final answers to the nearest whole dollar amount).
Activity Cost Pool | Applied Overhead |
Labour related | |
Purchase orders | |
Parts management | |
Board etching | |
General Factory | |
Total | $ 0 |
4. Determine the amount of underapplied or overapplied overhead cost for the year. (Note: Round intermediate calculations to 1 decimal place and final answers to the nearest whole dollar amount).
overhead cost |
Introduction to Managerial Accounting
ISBN: 978-1259105708
5th Canadian edition
Authors: Peter C. Brewer, Ray H. Garrison, Eric Noreen, Suresh Kalagnanam, Ganesh Vaidyanathan