Filling Smoker Company (FSC) makes two types of barbeque smokers - Basic and Hi-Tech. Here is...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Filling Smoker Company (FSC) makes two types of barbeque smokers - Basic and Hi-Tech. Here is information about these two product lines: Selling price per unit Direct materials per unit Direct labour per unit Direct labour hours per unit Estmated annual unit sales Basic Hi-Tech $ 430 $ 670 165 425 60 90 2.0 75,000 3.0 25,000 (assume inventory is constant) FSC has a traditional costing system where manufacturing overhead is applied to units on the basis of direct labour hours. FSC estimates that for the upcoming year it will incur: Estimated manufacturing overhead Estimated total direct labour hours $ 2,700,000 225,000 75,000 Required (where possible complete your work in the space immediately below each question. If you need more space insert additional rows): 1 What is the total cost and gross margin per unit for the Basic and Hi-Tech models assuming FSC uses a traditional costing system? FSC is looking at adopting an activity based costing system instead of using the traditional costing system. Preliminary work shows that manufacturing overhead costs can be sorted into 4 activity cost pools as follows: Expected Activity Estimated Activity Activity Measure Overhead Costs Basic Hi-Tech Total direct labour Supporting direct labour hours $ 1,150,000 150,000 75,000 Batch costs # of setups 1,240,000 Product related Other # of products square feet 210,000 75 1 275 1 225,000 350 2 $ 100,000 2,700,000 15,000 17,500 32,500 What is the total cost and the gross margin per unit for the Basic and the Hi-tech models using Activity Based Costing? Comment on the difference in the resulting cost per unit for each model between the traditional costing and activity based costing. Which is more accurate? Why? Filling Smoker Company (FSC) makes two types of barbeque smokers - Basic and Hi-Tech. Here is information about these two product lines: Selling price per unit Direct materials per unit Direct labour per unit Direct labour hours per unit Estmated annual unit sales Basic Hi-Tech $ 430 $ 670 165 425 60 90 2.0 75,000 3.0 25,000 (assume inventory is constant) FSC has a traditional costing system where manufacturing overhead is applied to units on the basis of direct labour hours. FSC estimates that for the upcoming year it will incur: Estimated manufacturing overhead Estimated total direct labour hours $ 2,700,000 225,000 75,000 Required (where possible complete your work in the space immediately below each question. If you need more space insert additional rows): 1 What is the total cost and gross margin per unit for the Basic and Hi-Tech models assuming FSC uses a traditional costing system? FSC is looking at adopting an activity based costing system instead of using the traditional costing system. Preliminary work shows that manufacturing overhead costs can be sorted into 4 activity cost pools as follows: Expected Activity Estimated Activity Activity Measure Overhead Costs Basic Hi-Tech Total direct labour Supporting direct labour hours $ 1,150,000 150,000 75,000 Batch costs # of setups 1,240,000 Product related Other # of products square feet 210,000 75 1 275 1 225,000 350 2 $ 100,000 2,700,000 15,000 17,500 32,500 What is the total cost and the gross margin per unit for the Basic and the Hi-tech models using Activity Based Costing? Comment on the difference in the resulting cost per unit for each model between the traditional costing and activity based costing. Which is more accurate? Why?
Expert Answer:
Answer rating: 100% (QA)
1 Total Cost and Gross Margin per Unit for the Basic and HiTech Models using Traditional Costing System Basic Model Direct Materials per unit 165 Dire... View the full answer
Related Book For
Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura
Posted Date:
Students also viewed these finance questions
-
This assignment requires you to complete the 2022 tax reporting for a fictional woman named Anna Smith. Question 1 T1 - step 4 - line 66 This is Anna's taxable income Answer: Question 2 T1 - step...
-
LLJ Satellites: Variance Analysis and Budgeting Jack Childs is nervous about his company's future performance. The Childs family own 40% of the shares of LLJ Satellites, and generally has control...
-
Refer to the Journal of Experimental Psychology-Applied (June 2000) name-retrieval study, presented in Exercise. The data for the study are saved in the NAMEGAME2 file. a. Find a 99% confidence...
-
Explain why pressure substantially affects the solubility of O2 in water but has little effect on the solubility of NaCl in water?
-
The bank reconciliation for Widgets Inc. included the following items: $30 bank service charge; NSF check of $275; bank error of $30; EFT collection from a customer for $2,335. Based on the...
-
Use technology and the data in StudentSurvey to construct a graph of the relationship between class Year and Gender for the situation in Exercise 2.37. Data From Exercise 2.37: Class Year by Gender...
-
Ellis Co. issued bonds with a face value of $150,000 on January 1, 2013. The bonds had a 6 percent stated rate of interest and a five-year term. The bonds were issued at face value. Required a. What...
-
Evaluate the sum. 14 4) (24-4n) n = 1 Write a formula for the nth term of the geometric sequence. 64 5), 8, 5, 25 8
-
Le Roi du Plastique Sarl has two processes extrusion and thermo-assembly. Consider the June 2022 data for physical units in the thermo-assembly process of Le Roi du Plastique: opening work in...
-
A company borrows $250,000 which should be paid in equal installment over the next 6 years with i = 8% per year. (i) What is annual installment amounts? (ii) What if all payments are delayed by one...
-
No one likes doing chores. In happiness surveys, housework is ranked down there with commuting as activities that people enjoy the least. Maybe thats why figuring out who does which chores usually...
-
Ludlow Inc. started business in 2017. It uses the simplified dollar-value LIFO inventory method. Ending inventories at actual prices are as follows: The price index in 2017, 2018 and 2019 is \(120...
-
Blueway Pharmacy and Redway Pharmacy commonly sell one another prescription drug products when one or the other is out of stock. They also sell prescription drug products to a local physician for his...
-
A hospital pharmacist regularly resold his excess inventory to a drug wholesaler. Although the PDMA was not an issue in this case, perhaps it should have been. The PDMA was passed in 1987 in part to...
-
\(Y\) uses the FIFO method in computing its inventory. On January 1, 2018, its beginning inventory of 3,500 units consisted of the following: During 2018, Y purchased the following units: During...
-
Design a summing amplifier that will average eight input voltages. Use input resistances of 10 K each.
-
Consider a game of poker being played with a standard 52-card deck (four suits, each of which has 13 different denominations of cards). At a certain point in the game, six cards have been exposed. Of...
-
Consider the following time series data. a. Construct a time series plot. What type of pattern exists in the data? b. Show the four-quarter and centered moving average values for this time series. c....
-
Refer to exercise 35. a. Deseasonalize the time series using the adjusted seasonal indexes computed in part (c) of exercise 35. b. Using Minitab or Excel, compute the linear trend regression equation...
-
The following table reports prices and usage quantities for two items in 2009 and 2011. a. Compute price relatives for each item in 2011 using 2009 as the base period. b. Compute an unweighted...
Study smarter with the SolutionInn App