Your company is Boysenberries Company Your company manufactures two sizes of box springs: twin and double...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Your company is Boysenberries Company Your company manufactures two sizes of box springs: twin and double Presented below is the budget estimates for material cost & labor cost per unit and the budgeted overhead within the activity cost pools. Production Data Material Cost per unit Labor Cost per unit Budgeted Production Estimate Activity Cost Pool Framing Padding Filling Labeling Inspection Twin 27 50 4800 Driver Square feet of pine Square feet of quiting Square feet of filling Number of boses Number of inspections Double 41 64 8700 Estimated Overhead 195,800 194400 320,700 250,100 234.200 Use per Twin 4,661 108,000 501,093 833.666 15.613 Use per Double 1,865 86,400 300,657 416,814 7,807 A) If the company currently uses a traditional plantwide overhead allocation rate based of 150% of labor cost, calculate the unit cost of the twin and double boxsprings. B) The company is investigating the use of activity-based costing and has created the activity cost pools shown above. Calculate the unit cost of the twin and double boxsprings using ABC. Note: The use of ABC or traditional costing does not change the total overhead amount but instead simply changes the way it is allocated. q Analyze the results. If you believe the ABC numbers are more accurate, discuss the potential impact to pricing of the twin and double if the sales price is determined by the cost. Your company is Boysenberries Company Your company manufactures two sizes of box springs: twin and double Presented below is the budget estimates for material cost & labor cost per unit and the budgeted overhead within the activity cost pools. Production Data Material Cost per unit Labor Cost per unit Budgeted Production Estimate Activity Cost Pool Framing Padding Filling Labeling Inspection Twin 27 50 4800 Driver Square feet of pine Square feet of quiting Square feet of filling Number of boses Number of inspections Double 41 64 8700 Estimated Overhead 195,800 194400 320,700 250,100 234.200 Use per Twin 4,661 108,000 501,093 833.666 15.613 Use per Double 1,865 86,400 300,657 416,814 7,807 A) If the company currently uses a traditional plantwide overhead allocation rate based of 150% of labor cost, calculate the unit cost of the twin and double boxsprings. B) The company is investigating the use of activity-based costing and has created the activity cost pools shown above. Calculate the unit cost of the twin and double boxsprings using ABC. Note: The use of ABC or traditional costing does not change the total overhead amount but instead simply changes the way it is allocated. q Analyze the results. If you believe the ABC numbers are more accurate, discuss the potential impact to pricing of the twin and double if the sales price is determined by the cost.
Expert Answer:
Related Book For
Accounting
ISBN: 978-0324662962
23rd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
Posted Date:
Students also viewed these finance questions
-
Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin is $25 per unit and $40 is used in direct labor, while the direct material for the double is $40...
-
Canada Corporation manufactures two sizes of calculators, regular and jumbo. The following information applies to their expectations for the following period: Cost Pool Overhead Costs Cost driver...
-
Cambridge Metal Works manufactures two sizes of gears. The smaller gear requires 4 hr of machining and 1 hr of polishing and yields a profit of $25. The larger gear requires 1 hr of machining and 1...
-
An order book displays the following information for stock ABC: Bid Shares 200 100 300 200 Price 25.76 25.66 25.62 25.54 Ask Price 25.82 25.94 25.98 26.06 Shares 100 200 200 400 What is the total...
-
Kathleen and Mary (KM) operate a small coffee shop. They produce regular coffee available from many other similar businesses and also produce gourmet coffee for special orders. Their accountant...
-
Chrystal borrowed $1,000,000 from MQ Bank for one year at simple interest rate of 6.4% p.a. Unfortunately, she misread the documentation for the loan, and has misunderstood the interest charge. In...
-
At a ski resort, water at \(40{ }^{\circ} \mathrm{F}\) is pumped through a 3-in.diameter, 2000-ft-long steel pipe from a pond at an elevation of \(4286 \mathrm{ft}\) to a snow-making machine at an...
-
1. Determine whether this case would be prosecuted as a criminal or civil offense, and state reasons to support your conclusion. 2. Who are the victims of this late-trading scheme, and what losses do...
-
You have an object with an unknown electric charge. In other words, it could be neutral, negatively charged, or positively charged. You make two observations about this object. 1. The object of an...
-
Spectrum Sound, Inc. manufactures compact disc players with unusual features in its St. Louis Division. The divisional sales manager has estimated the following demand-curve data. Quantity Sold per...
-
Use the following information to answer questions. Assuming short selling is not allowed. E(R) =6% E (R4) =12% E(R) = 12% 0= 2.83% P12=-1 0= 1.41% P13= 1 E (R) = 14% 03= 4.24% P14=0 E(R) =E(R) = 12%...
-
The following transactions are for Sandhill Company, 1 On December 3, Sandhill Company sold 5647,000 of merchandise to Monty Co., on account, terms 2/10, n/30, FOB destination. Sandhill pald $400 for...
-
Can you please assist with the creation of a SOA for financial advice. The following are questions i need to give for the Case study. CAn you include diagrams please? 1. Superannuation...
-
Over the winter months, Cullumber Co. pre-sells fertilizing and weed control lawn services to be performed from May through September, inclusive. If payment is made in full by April 1, a 5% discount...
-
Solve and please show all steps 1 4 ^ x + 1 5 ( 1 4 ) ^ - x = 8
-
How would you implement your public health campaign on teenage vaping . you may explain two potential barriers that might impact the implementation process and one way you might address one barrier....
-
With reference to the data given where 1,700 shares is owned by Akiko, 30,000 outstanding shares: 25,000 Additional shares issue. Assume that the current book value of shares if 500,000 and the new...
-
Why should you not model a decision variable as a random variable with a probability distribution?
-
Daan Corporation wholesales repair products to equipment manufacturers. On March 1, 2010, Daan Corporation issued $24,000,000 of five-year, 12% bonds at an effective interest rate of 10%, receiving...
-
Gemini Steel Company produces three grades of steel: high, good, and regular grade. Each of these products (grades) has high demand in the market, and Gemini is able to sell as much as it can produce...
-
The following data were taken from recent annual reports of Southwest Airlines, which operates a low-fare airline service to over 50 cities in the United States. (a) Determine the number of times...
-
The PFD in Figure 11.63 shows a process in which two liquid products, A and B, are produced from a feed stream of raw material R. In the process, the reactor feed is preheated to \(300^{\circ}...
-
Consider a process with the following streams: (a) Compute \(\Delta T_{\text {thres }}\) as well as the minimum external heating and cooling requirements as a function of \(\Delta T_{\text {min }}\)....
-
Design a HEN to meet the MER targets for \(\Delta T_{\text {min }}=10^{\circ} \mathrm{C}\) and \(N_{H X, \text { min }}\) for a process involving five hot streams and one cold stream as introduced by...
Study smarter with the SolutionInn App