1 Icy Cool manufacturers two types of products, Refrigerators and Freezers. In the past year, Icy...
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1 Icy Cool manufacturers two types of products, Refrigerators and Freezers. In the past year, Icy Cool manufactured 24,000 Refrigerators in 2,000 Freezers. Currently, Icy Cool uses a traditional costing system with machine hours as 13 the allocation base. In anticipation of developing an activity-based costing system, Icy Cool has identified the 4 following overhead cost pools and activities associated with production: 5 6 7 8 9 10 11 12 13 14 15 Activities Machine Set-Ups Extruding Quality Control Total Acitivites Machine Set-Ups Extruding Quality Control $ $ $ $ Activity Costs 196,000.00 480,000.00 160,000.00 836,000.00 Cost Drivers Number of Set-Ups Machine Hours Number of Inspections 16 17 18 There are 3 parts to this question below. Refrigerators 300 60,000 5,000 Freezers 484 20,000 3,000 17 18 "There are 3 parts to this question below. 19 1.Using the current traditional costing method that assigns overhead costs based on machine hours, 20 calculate the total overhead cost allocated to each type of product for the current year. (3 Marks) 21 22 23 24 25 26 27 28 29 30 + 31 32 33 2. Under activity-based costing (ABC): Determine the activity rate for each of the three activities. (3 Marks) 34 35 42 43 44 3. Using activity-based costing (ABC), determine the total activity costs allocated to each product line (3 Marks) 45 46 47 48 49 50 51 52 53 1 Icy Cool manufacturers two types of products, Refrigerators and Freezers. In the past year, Icy Cool manufactured 24,000 Refrigerators in 2,000 Freezers. Currently, Icy Cool uses a traditional costing system with machine hours as 13 the allocation base. In anticipation of developing an activity-based costing system, Icy Cool has identified the 4 following overhead cost pools and activities associated with production: 5 6 7 8 9 10 11 12 13 14 15 Activities Machine Set-Ups Extruding Quality Control Total Acitivites Machine Set-Ups Extruding Quality Control $ $ $ $ Activity Costs 196,000.00 480,000.00 160,000.00 836,000.00 Cost Drivers Number of Set-Ups Machine Hours Number of Inspections 16 17 18 There are 3 parts to this question below. Refrigerators 300 60,000 5,000 Freezers 484 20,000 3,000 17 18 "There are 3 parts to this question below. 19 1.Using the current traditional costing method that assigns overhead costs based on machine hours, 20 calculate the total overhead cost allocated to each type of product for the current year. (3 Marks) 21 22 23 24 25 26 27 28 29 30 + 31 32 33 2. Under activity-based costing (ABC): Determine the activity rate for each of the three activities. (3 Marks) 34 35 42 43 44 3. Using activity-based costing (ABC), determine the total activity costs allocated to each product line (3 Marks) 45 46 47 48 49 50 51 52 53
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To answer the three parts of the question lets first analyze the information provided 1 Using the current traditional costing method that assigns overhead costs based on machine hours calculate the to... View the full answer
Related Book For
Statistics For Managers Using Microsoft Excel
ISBN: 9780133130805
7th Edition
Authors: David M. Levine, David F. Stephan, Kathryn A. Szabat
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