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1 Chapter 4: Applying Excel Enter a formula into each of the cells marked with a ? below Review Problem: Activity-Based Costing 6 Data Deluxe 2,000 $25 7. 8 Annual sales in units 9 Direct materials per unit LO Direct labor-hours per unit 11 12 Direct labor rate 13 14 15 16 Activities and Activity Measures 17 Labor related (direct labor-hours) 18 Machine setups (setups) 19 Production orders (orders) 20 General factory (machine-hours) 21 Tourist 10,000 $17 4 $12 per DLH Estimated Overhead Expected Activity Tourist Cost Deluxe Total 2$ 150,000 70,000 80.000 ? 3,000 2,000 ?. 100 300 250,000 ? 12,000 28,000 22 Compute the predetermined overhead rate Estimated total manufacturing overhead (a) 25 Estimated total amount of the allocation base (b) 26 Predetermined overhead rate (a) + (b) 27 28 Compute the manufacturing overhead applied 29 Direct labor-hours per unit (a) 30 Predetermined overhead rate (b) 31 Manufacturing overhead applied per unit (a) x (b) 32 33 Compute traditional unit product costs 34 Direct materials 35 Direct labor 36 Manufacturing overhead applied 37 Traditonal unit product cost ? ? DLHS ? per DLH Deluxe Tourist ? DLHS ? per DLH ? DLHS ? per DLH ? Deluxe Tourist ? ? ? 38 39 Compute activity rates Estimated Overhead 31 Activities 12 Labor related 13 Machine setups 14 Production orders 15 General factory Total Expected Activity ? DLHS ? setups ? orders Cost Activity Rate ? per DLH ? per setup ? per order ? per MH ? ? MHs 17 Compute the ABC overhead cost per unit 18 19 Activities s0 Labor related 51 Machine setups 52 Production orders 53 General factory 54 Total overhead cost assigned (a) 55 Number of units produced (b) 56 ABC overhead cost per unit (a) + (b) 57 58 Compute the ABC unit product costs 59 Direct materials 50 Direct labor 51 ABC overhead cost per unit (see above) 52 ABC unit product cost 53 54 55 56 57 Deluxe Expected Tourist Expected Activity Rate Activity Amount Activity Amount ? ? ? ? ? Deluxe Tourist ? ? ? Requirement 1: (a). Which of the following statements are true concerning the predetermined overhead rate when the direct labor-hour requirement for the Deluxe model dropped from 5 hours to 2 hours? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) The predetermined overhead rate increased because the total estimated overhead cost increased. The predetermined overhead rate decreased because the total direct labor-hours dropped. The predetermined overhead rate decreases because the total estimated overhead cost increased. The predetermined overhead rate increased because the total direct labor-hours dropped. (b). Which of the following statements are true concerning the unit product costs for the Tourist model when the direct labor-hour requirement for the Deluxe model drops from 5 hours to 2 hours? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Economically, the fact that the Deluxe model's direct labor-hour requirement changed should have little or no impact on the cost of the Tourist model. The ABC unit product cost of the Tourist model increases when the Deluxe model's direct labor- hour requirement decreases, but by not by as much as the traditional unit product cost. The traditional unit product cost of the Tourist model increases when the Deluxe model's direct labor-hour requirement decreases. ). Which of the following statements are true? (You may select more than one answer. Single ick the box with the question mark to produce a check mark for a correct answer and double ick the box with the question mark to empty the box for a wrong answer. Any boxes left with question mark will be automatically graded as incorrect.) The traditional unit product costs for the two models have been changed by the change in production orders because traditional overhead allocations based on direct labor-hours ignore other cost drivers such as production orders. The traditional unit product costs for the two models are unchanged by the change in production orders because traditional overhead allocations based on direct labor-hours ignore other cost drivers such as production orders. The traditional unit product costs for the two models are unchanged by the change in production orders because neither the total estimated overhead cost nor the total direct labor-hours were affected. (d). Which of the following statements are true concerning the effects of the change in production orders on the ABC unit product costs? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) The ABC unit product cost of the Deluxe model has increased and the ABC unit product cost of the Tourist model has decreased because a lower proportion of the production orders are now attributable to the Deluxe model. The ABC unit product cost of the Deluxe model has increased and the ABC unit product cost of the Tourist model has decreased because a higher proportion of the production orders are now attributable to the Deluxe model. The ABC unit product cost of the Deluxe model has decreased and the ABC unit product cost of the Tourist model has increased because a lower proportion of the production orders are now attributable to the Deluxe model. The ABC unit product cost of the Deluxe model has decreased and the ABC unit product cost of the Tourist model has increased because a higher proportion of the production orders are now attributable to the Deluxe model. 1 Chapter 4: Applying Excel Enter a formula into each of the cells marked with a ? below Review Problem: Activity-Based Costing 6 Data Deluxe 2,000 $25 7. 8 Annual sales in units 9 Direct materials per unit LO Direct labor-hours per unit 11 12 Direct labor rate 13 14 15 16 Activities and Activity Measures 17 Labor related (direct labor-hours) 18 Machine setups (setups) 19 Production orders (orders) 20 General factory (machine-hours) 21 Tourist 10,000 $17 4 $12 per DLH Estimated Overhead Expected Activity Tourist Cost Deluxe Total 2$ 150,000 70,000 80.000 ? 3,000 2,000 ?. 100 300 250,000 ? 12,000 28,000 22 Compute the predetermined overhead rate Estimated total manufacturing overhead (a) 25 Estimated total amount of the allocation base (b) 26 Predetermined overhead rate (a) + (b) 27 28 Compute the manufacturing overhead applied 29 Direct labor-hours per unit (a) 30 Predetermined overhead rate (b) 31 Manufacturing overhead applied per unit (a) x (b) 32 33 Compute traditional unit product costs 34 Direct materials 35 Direct labor 36 Manufacturing overhead applied 37 Traditonal unit product cost ? ? DLHS ? per DLH Deluxe Tourist ? DLHS ? per DLH ? DLHS ? per DLH ? Deluxe Tourist ? ? ? 38 39 Compute activity rates Estimated Overhead 31 Activities 12 Labor related 13 Machine setups 14 Production orders 15 General factory Total Expected Activity ? DLHS ? setups ? orders Cost Activity Rate ? per DLH ? per setup ? per order ? per MH ? ? MHs 17 Compute the ABC overhead cost per unit 18 19 Activities s0 Labor related 51 Machine setups 52 Production orders 53 General factory 54 Total overhead cost assigned (a) 55 Number of units produced (b) 56 ABC overhead cost per unit (a) + (b) 57 58 Compute the ABC unit product costs 59 Direct materials 50 Direct labor 51 ABC overhead cost per unit (see above) 52 ABC unit product cost 53 54 55 56 57 Deluxe Expected Tourist Expected Activity Rate Activity Amount Activity Amount ? ? ? ? ? Deluxe Tourist ? ? ? Requirement 1: (a). Which of the following statements are true concerning the predetermined overhead rate when the direct labor-hour requirement for the Deluxe model dropped from 5 hours to 2 hours? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) The predetermined overhead rate increased because the total estimated overhead cost increased. The predetermined overhead rate decreased because the total direct labor-hours dropped. The predetermined overhead rate decreases because the total estimated overhead cost increased. The predetermined overhead rate increased because the total direct labor-hours dropped. (b). Which of the following statements are true concerning the unit product costs for the Tourist model when the direct labor-hour requirement for the Deluxe model drops from 5 hours to 2 hours? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Economically, the fact that the Deluxe model's direct labor-hour requirement changed should have little or no impact on the cost of the Tourist model. The ABC unit product cost of the Tourist model increases when the Deluxe model's direct labor- hour requirement decreases, but by not by as much as the traditional unit product cost. The traditional unit product cost of the Tourist model increases when the Deluxe model's direct labor-hour requirement decreases. ). Which of the following statements are true? (You may select more than one answer. Single ick the box with the question mark to produce a check mark for a correct answer and double ick the box with the question mark to empty the box for a wrong answer. Any boxes left with question mark will be automatically graded as incorrect.) The traditional unit product costs for the two models have been changed by the change in production orders because traditional overhead allocations based on direct labor-hours ignore other cost drivers such as production orders. The traditional unit product costs for the two models are unchanged by the change in production orders because traditional overhead allocations based on direct labor-hours ignore other cost drivers such as production orders. The traditional unit product costs for the two models are unchanged by the change in production orders because neither the total estimated overhead cost nor the total direct labor-hours were affected. (d). Which of the following statements are true concerning the effects of the change in production orders on the ABC unit product costs? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) The ABC unit product cost of the Deluxe model has increased and the ABC unit product cost of the Tourist model has decreased because a lower proportion of the production orders are now attributable to the Deluxe model. The ABC unit product cost of the Deluxe model has increased and the ABC unit product cost of the Tourist model has decreased because a higher proportion of the production orders are now attributable to the Deluxe model. The ABC unit product cost of the Deluxe model has decreased and the ABC unit product cost of the Tourist model has increased because a lower proportion of the production orders are now attributable to the Deluxe model. The ABC unit product cost of the Deluxe model has decreased and the ABC unit product cost of the Tourist model has increased because a higher proportion of the production orders are now attributable to the Deluxe model.
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