acc 214 Lab #4 Chapter 17 (ABC costing)

8 Draw Lab 4 Chapter 11 - ABC Corting po QO Home Insert Page Layout Farms Data Review View Tell me D- Test Call 13 AA E Currency Pete 21 g 5 - % G20 : 4 Une ACE 314 TACCO . then we het die prodatkott D 20 the direct labore had 0.000 9.000 1.700 20.000 2. DOG 1190 7.100 10,000 1,200 1.000 30.00 $110. 400 000 5480.000 SIS.DOC 525,000 500.000 111 Owiednie patai aber machine on pcted to I used 15 Percalculate the total cost of producing and the vergeet per tot Mom en described below Totale 1 Total Labor Cost Inacted amount of glede der in the factory wider Total Average cost perunt Pastate grachrodt and the correctly Modirbed below Toner Tea Directa wataart of Mowery machine how factory wide cove! $325,000 $1,300.000 0.000 540,000 519 11.30.000 Avenger Port de beste water witor the west of ringi but Estimate Labe - Chapter 17 - ABC Costing problem Home Insert Draw Page Layout Formulas Data Review View Tell me Calitriedy - t Y 8 TH + Currency Pry 29.0 10 0A Marge & Cette $% 9 18 Con Form Formatie ronnat Sort G20 x ndo Select 1 Put you decide to sining att bedring will provide a frent, perhaps more accurate sul for the werage cost of producing each product Che cost of proches the regenerating Med below. You get the following information about the dents Estimated amount of Active Contrer condensed for stimated Toll Amount Prody Product Overhead Setup machines of 120 50 250 $100,000 of machines 2.100 3.200 2,200 3300 $910.000 direct later om 20000 7500 3000 0500 #pections 50 $435.000 10 20 100 $215.00 $1,850.000 1 Total Drac Matera ut $1.100.000 $400,000 $125,000 Tetest laborat 51.905,000 $400.000 $150,000 $60.000 13 Alated MOH $610,000 Set of machines bin Asembly 57 on TE AMO Overplication for machine Owerheadpplication rate for one Dverted into formy Orted plication rate for inspection Total Costa A per Part 4 Anme your company decided to use direct labor hours as the cost driver to locate manufacturing videos to units produced part is Uning her hown to alocated near that your company decided to use machine hortoi based conting ABG Carti Dyw cyhoe best prachte wendet weed costo determinand cont per unit) Wywhet? Wie short A AutoSave OFF O. Lab 4 - Chapter 17 - ABC Costing probler Home Home Insert Draw Page Layout Formulas Data Review View Tell me v 2 Wrap Text Currency V = = Merge & Center $ % ) B M H K Use cell references/formulas in highlighted cells Products Calibri (Body) 12 Paste BIU A G20 + x fx A C D 1 Name 2 ACC 214 -- Lab 4: Chapter 17 (ABC Costing) 3 4 The Hitt/Kingston Corporation produces three products: Product X, Product Y and Product Z. 5 6 Direct Labor: $20 per hour is the estimated direct labor cost. 7 Manufacturing Overhead: $1,850,000 estimated total cost 8 9 10 X 11 Number of units to be produced 30,000 12 Number of machine hours expected to be used 2,700 13 Number of direct labor hours expected to be used 20,000 14 15 Part 1: calculate the total cost of producing each product and 16 the average cost per unit allocating MOH as described below. 17 18 Total Direct Materials Used $1,100,000 19 Total Direct Labor Cost $400,000 20 Allocated amount of MOH applied using direct labor hours 21 as the factory wide cost driver 22 Total Cost 23 24 Average cost per unit 25 26 Part 2: calculate the total cost of producing each product 27 and the average cost per unit allocating MOH as described below. 20,000 3,200 7,500 Z 10,000 2,200 3,000 Total 60,000 8,100 30,500 Hint: First- $480,000 $150,000 $325,000 $60,000 $1,905,000 $610,000 O 1 2.700 20,000 2,200 7,500 1 2.200 2,000 8100 30, 500 Hint: Fint calculate the overhead application rates) 51.100.000 $400.000 $450,000 $150,000 $325,000 $60,000 $1,905,000 5610,000 Overhead apelication rate ting how E 12 Number of machine hours expected to be used 1) Number of direct labor hours expected to be used 14 is Part calculate the total cost of producing each product and 16 the average cost per un allocating MOH as described below. 17 11 Total Direct Materials Used 19 Total Direct Labor Cost 20 | Allocated amount of MON applied using direct labor hours 21 as the factory wide cont driver 22 Total cost 25 20 Average cost per unit 5 26 Part 2 calculate the total cost of producing each produkt 27 and the average cost per unitslocating MOH as described below. 23 29 Total Direct Materials Used 10 Total Direct Labor Cout 1 Allocated amount of Mopoleding machine hours the factory wide cont driver 13 Total com $1,100,000 $400,000 5480,000 $150.000 $125,000 560.000 51,905,000 5610.000 Overhead endlication the Machine Hours Average cost per unit Overhead plication rate for machine setup Overheadsplication rate for drilling Overhead appliation rate for assembly Overhead soplication rate for inspection 37 Part 3: You decide to see if using activity based costing will provide a different, perhaps more accurate result for the average cost of producing each unit of product 35 Calculate the total cost of producing each product and the average cost per unit allocating MON as described below 39 40 You get the following information about the overhead costs. 41 Estimated amount of 4.2 Activity Cost driver Estimated cost driver used for Total 43 Amount of Product Product Y Product Z Overhead 45 Setup of machines of setups 120 80 50 250 $300,000 46 Drilling of machine hours 2.700 2,200 2,200 1100 5810,000 47 Assembly #of direct labor hours 20000 7500 3000 10500 $425,000 spection of inspections 50 30 20 100 $215,000 $1.850,000 so 51 Total Direct Materials Used $1,100,000 S430,000 $325,000 51.905,000 Total Direct Labor Cost $400,000 $150,000 S60,000 $610,000 33 Allocated MOH S4 Setup of machines 3 Drilling 56 Assembly 57 Inspection Total Allocated MOH 59 Total 61 12 Average cost per un 54 Part 4 Assume your company decided to use direct labor hours as the cost driver to allocate manufacturing overhead costs to units produced (part 1) Using direct labor hours to allocate overhead means that your company decided not to use machine hours (part 2) or activity-based costing (ABC (part 3) Did your company choose the best approach to allocate manufacturing overhead costs to determine total costs and cost per unt? Why or why not? Write a short paragraph to explain Answer: 55 67 60 60 20 71 72 71 74 75 8 Draw Lab 4 Chapter 11 - ABC Corting po QO Home Insert Page Layout Farms Data Review View Tell me D- Test Call 13 AA E Currency Pete 21 g 5 - % G20 : 4 Une ACE 314 TACCO . then we het die prodatkott D 20 the direct labore had 0.000 9.000 1.700 20.000 2. DOG 1190 7.100 10,000 1,200 1.000 30.00 $110. 400 000 5480.000 SIS.DOC 525,000 500.000 111 Owiednie patai aber machine on pcted to I used 15 Percalculate the total cost of producing and the vergeet per tot Mom en described below Totale 1 Total Labor Cost Inacted amount of glede der in the factory wider Total Average cost perunt Pastate grachrodt and the correctly Modirbed below Toner Tea Directa wataart of Mowery machine how factory wide cove! $325,000 $1,300.000 0.000 540,000 519 11.30.000 Avenger Port de beste water witor the west of ringi but Estimate Labe - Chapter 17 - ABC Costing problem Home Insert Draw Page Layout Formulas Data Review View Tell me Calitriedy - t Y 8 TH + Currency Pry 29.0 10 0A Marge & Cette $% 9 18 Con Form Formatie ronnat Sort G20 x ndo Select 1 Put you decide to sining att bedring will provide a frent, perhaps more accurate sul for the werage cost of producing each product Che cost of proches the regenerating Med below. You get the following information about the dents Estimated amount of Active Contrer condensed for stimated Toll Amount Prody Product Overhead Setup machines of 120 50 250 $100,000 of machines 2.100 3.200 2,200 3300 $910.000 direct later om 20000 7500 3000 0500 #pections 50 $435.000 10 20 100 $215.00 $1,850.000 1 Total Drac Matera ut $1.100.000 $400,000 $125,000 Tetest laborat 51.905,000 $400.000 $150,000 $60.000 13 Alated MOH $610,000 Set of machines bin Asembly 57 on TE AMO Overplication for machine Owerheadpplication rate for one Dverted into formy Orted plication rate for inspection Total Costa A per Part 4 Anme your company decided to use direct labor hours as the cost driver to locate manufacturing videos to units produced part is Uning her hown to alocated near that your company decided to use machine hortoi based conting ABG Carti Dyw cyhoe best prachte wendet weed costo determinand cont per unit) Wywhet? Wie short A AutoSave OFF O. Lab 4 - Chapter 17 - ABC Costing probler Home Home Insert Draw Page Layout Formulas Data Review View Tell me v 2 Wrap Text Currency V = = Merge & Center $ % ) B M H K Use cell references/formulas in highlighted cells Products Calibri (Body) 12 Paste BIU A G20 + x fx A C D 1 Name 2 ACC 214 -- Lab 4: Chapter 17 (ABC Costing) 3 4 The Hitt/Kingston Corporation produces three products: Product X, Product Y and Product Z. 5 6 Direct Labor: $20 per hour is the estimated direct labor cost. 7 Manufacturing Overhead: $1,850,000 estimated total cost 8 9 10 X 11 Number of units to be produced 30,000 12 Number of machine hours expected to be used 2,700 13 Number of direct labor hours expected to be used 20,000 14 15 Part 1: calculate the total cost of producing each product and 16 the average cost per unit allocating MOH as described below. 17 18 Total Direct Materials Used $1,100,000 19 Total Direct Labor Cost $400,000 20 Allocated amount of MOH applied using direct labor hours 21 as the factory wide cost driver 22 Total Cost 23 24 Average cost per unit 25 26 Part 2: calculate the total cost of producing each product 27 and the average cost per unit allocating MOH as described below. 20,000 3,200 7,500 Z 10,000 2,200 3,000 Total 60,000 8,100 30,500 Hint: First- $480,000 $150,000 $325,000 $60,000 $1,905,000 $610,000 O 1 2.700 20,000 2,200 7,500 1 2.200 2,000 8100 30, 500 Hint: Fint calculate the overhead application rates) 51.100.000 $400.000 $450,000 $150,000 $325,000 $60,000 $1,905,000 5610,000 Overhead apelication rate ting how E 12 Number of machine hours expected to be used 1) Number of direct labor hours expected to be used 14 is Part calculate the total cost of producing each product and 16 the average cost per un allocating MOH as described below. 17 11 Total Direct Materials Used 19 Total Direct Labor Cost 20 | Allocated amount of MON applied using direct labor hours 21 as the factory wide cont driver 22 Total cost 25 20 Average cost per unit 5 26 Part 2 calculate the total cost of producing each produkt 27 and the average cost per unitslocating MOH as described below. 23 29 Total Direct Materials Used 10 Total Direct Labor Cout 1 Allocated amount of Mopoleding machine hours the factory wide cont driver 13 Total com $1,100,000 $400,000 5480,000 $150.000 $125,000 560.000 51,905,000 5610.000 Overhead endlication the Machine Hours Average cost per unit Overhead plication rate for machine setup Overheadsplication rate for drilling Overhead appliation rate for assembly Overhead soplication rate for inspection 37 Part 3: You decide to see if using activity based costing will provide a different, perhaps more accurate result for the average cost of producing each unit of product 35 Calculate the total cost of producing each product and the average cost per unit allocating MON as described below 39 40 You get the following information about the overhead costs. 41 Estimated amount of 4.2 Activity Cost driver Estimated cost driver used for Total 43 Amount of Product Product Y Product Z Overhead 45 Setup of machines of setups 120 80 50 250 $300,000 46 Drilling of machine hours 2.700 2,200 2,200 1100 5810,000 47 Assembly #of direct labor hours 20000 7500 3000 10500 $425,000 spection of inspections 50 30 20 100 $215,000 $1.850,000 so 51 Total Direct Materials Used $1,100,000 S430,000 $325,000 51.905,000 Total Direct Labor Cost $400,000 $150,000 S60,000 $610,000 33 Allocated MOH S4 Setup of machines 3 Drilling 56 Assembly 57 Inspection Total Allocated MOH 59 Total 61 12 Average cost per un 54 Part 4 Assume your company decided to use direct labor hours as the cost driver to allocate manufacturing overhead costs to units produced (part 1) Using direct labor hours to allocate overhead means that your company decided not to use machine hours (part 2) or activity-based costing (ABC (part 3) Did your company choose the best approach to allocate manufacturing overhead costs to determine total costs and cost per unt? Why or why not? Write a short paragraph to explain Answer: 55 67 60 60 20 71 72 71 74 75