Digiprint Corporation owns a small printing press that prints leaflets, brochures, and advertising materials. Digiprint classifies...
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Digiprint Corporation owns a small printing press that prints leaflets, brochures, and advertising materials. Digiprint classifies its various printing jobs as standard jobs or special jobs. (Click the icon to view additional information.) To see how activity-based costing would affect the costs of standard and special jobs, Digiprint collects the following information for the fiscal year 2020 that just ended. (Click the icon to view the information.) Read the requirements. Requirement 1. Calculate the cost of a standard job and a special job under the sim Simple Costing System Cost of supplies per job Direct manufacturing labor cost per job Indirect cost allocated to each job Total costs More info Standard Job Data table A B C D 1 Standard Job Special Job Total 2 Number of printing jobs 1,800 900 3 Price per job S 1,300 $ 1,600 4 Cost of supplies per job $ 240 $ 260 5 Direct labor costs per job $ 150 $ 280 - X 6 Printing machine-hours per job 10 10 7 Cost of printing machine operations 7 8 8 Setup-hours per job 9 Setup costs 10 Total number of purchase orders 390 490 $ 11 Purchase order costs Digiprint's simple job-costing system has two direct-cost categories (direct materials and direct labor) and a single indirect-cost pool. Digiprint operates at capacity and allocates all indirect costs using printing machine-hours as the allocation base. Digiprint is concerned about the accuracy of the costs assigned to standard and special jobs and therefore is planning to implement an activity-based costing system. Digiprint's ABC system would have the same direct-cost categories as its simple costing system. However, instead of a single indirect-cost pool there would now be six categories for assigning indirect costs design, purchasing, setup, printing machine operations, marketing, and administration. 12 Design costs 13 Marketing costs as a percentage of revenues 14 Administration costs E Cause-and-Effect Relationship Between Allocation Base and Activity Cost Indirect costs of operating printing machines $ 621,000 increase with printing machine-hours $ 514,800 Indirect setup costs increase with setup-hours Indirect purchase order costs increase with 27,280 number of purchase orders Design costs are allocated to standard and special jobs based on a special study of the design 39,000 department $ 5,000 $ 6% 34,000 $ 6% $ 226,800 Demand for administrative resources increases $ 224,460 with direct labor costs = X Digiprint Corporation owns a small printing press that prints leaflets, brochures, and advertising materials. Digiprint classifies its various printing jobs as standard jobs or special jobs. (Click the icon to view additional information.) To see how activity-based costing would affect the costs of standard and special jobs, Digiprint collects the following information for the fiscal year 2020 that just ended. (Click the icon to view the information.) Read the requirements. Requirement 1. Calculate the cost of a standard job and a special job under the sim Simple Costing System Cost of supplies per job Direct manufacturing labor cost per job Indirect cost allocated to each job Total costs More info Standard Job Data table A B C D 1 Standard Job Special Job Total 2 Number of printing jobs 1,800 900 3 Price per job S 1,300 $ 1,600 4 Cost of supplies per job $ 240 $ 260 5 Direct labor costs per job $ 150 $ 280 - X 6 Printing machine-hours per job 10 10 7 Cost of printing machine operations 7 8 8 Setup-hours per job 9 Setup costs 10 Total number of purchase orders 390 490 $ 11 Purchase order costs Digiprint's simple job-costing system has two direct-cost categories (direct materials and direct labor) and a single indirect-cost pool. Digiprint operates at capacity and allocates all indirect costs using printing machine-hours as the allocation base. Digiprint is concerned about the accuracy of the costs assigned to standard and special jobs and therefore is planning to implement an activity-based costing system. Digiprint's ABC system would have the same direct-cost categories as its simple costing system. However, instead of a single indirect-cost pool there would now be six categories for assigning indirect costs design, purchasing, setup, printing machine operations, marketing, and administration. 12 Design costs 13 Marketing costs as a percentage of revenues 14 Administration costs E Cause-and-Effect Relationship Between Allocation Base and Activity Cost Indirect costs of operating printing machines $ 621,000 increase with printing machine-hours $ 514,800 Indirect setup costs increase with setup-hours Indirect purchase order costs increase with 27,280 number of purchase orders Design costs are allocated to standard and special jobs based on a special study of the design 39,000 department $ 5,000 $ 6% 34,000 $ 6% $ 226,800 Demand for administrative resources increases $ 224,460 with direct labor costs = X
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Related Book For
Cost Accounting A Managerial Emphasis
ISBN: 978-0133428704
15th edition
Authors: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
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