Consider the cost allocation system used at Sandia Custom Furniture and illustrated in Exhibit 6.9 . Required
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Consider the cost allocation system used at Sandia Custom Furniture and illustrated in Exhibit 6.9.
RequiredThe system is referred to as a two-stage cost allocation system, because:a. There are two cost pools.b. There are two cost objects.c. Cost is allocated first to intermediate cost pools and from these pools to cost objects.d. All of the above.e. None of the above.
Transcribed Image Text:
S-66s Total S-72s Units produced 320 80 240 Machine-hours 1,400 4,200 5,600 Direct labor-hours 3,900 6,300 2,400 $ 40,000 $ 36,000 Direct materials $ 76,000 Direct labor 78,000 72,000 150,000 |Manufacturing overhead Utilitiesa 3,360 Suppliesb 3,500 Trainingb 42,000 Supervisionb 76,860 Machine depreciationa 41,370 Plant depreciationa 56,070 Miscellaneousb 28,840 Total manufacturing overhead $252,000 Predetermined Overhead Allocation Base ÷ 5,600 machine-hrs overhead rates = $18 $100,800 ÷ 6,300 direct labor- = $24 $151,200 hours Product Costing Total S-72s S-66s $ 40,000 $ 36,000 Direct materials $ 76,000 Direct labor 72,000 78,000 150,000 Overhead Machine-related (@$18 per machine- hour) 25,200 75,600 100,800 Labor-related (@$24 per direct labor-hour) 57,600 93,600 151,200 $ 82,800 $169,200 $252,000 Total cost $194,800 $283,200 478,000 Unit cost $ 2,435 $ 1,180
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Related Book For
Fundamentals of Cost Accounting
ISBN: 978-1259969478
6th edition
Authors: William N. Lanen, Shannon Anderson, Michael W Maher
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