LO3, LO4 Plata Company has identified the following overhead activitics, costs, and activity dri- vers for...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
LO3, LO4 Plata Company has identified the following overhead activitics, costs, and activity dri- vers for the coming year: Activity Expected Cost Activity Driver Activity Capacity 300 Setting up equipment $120,000 Number of setups 90,000 210,000 100,000 Number of orders Ordering costs Machine costs Receiving 9,000 21,000 5,000 Machine hours Receiving hours Plata produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B Direct materials $150,000 $200,000 S120,000 Direct labor $120,000 Units completed Direct labor hours 8,000 4,000 3,000 1,000 100 6,000 9,000 3,500 Number of setups 200 Number of orders 3,000 12,000 1,500 Machine hours Receiving hours The company's normal activity is 4,000 direct labor hours. Chapter 4 Activity-Based Costing Required: 1. Determine the unit cost for cach model using direct labor hours to apply over- head. 2. Determine the unit cost for each model using the four activity drivers. 3. Which method produces the more accurate cost assignment? Why? LO3, LO4 Plata Company has identified the following overhead activitics, costs, and activity dri- vers for the coming year: Activity Expected Cost Activity Driver Activity Capacity 300 Setting up equipment $120,000 Number of setups 90,000 210,000 100,000 Number of orders Ordering costs Machine costs Receiving 9,000 21,000 5,000 Machine hours Receiving hours Plata produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B Direct materials $150,000 $200,000 S120,000 Direct labor $120,000 Units completed Direct labor hours 8,000 4,000 3,000 1,000 100 6,000 9,000 3,500 Number of setups 200 Number of orders 3,000 12,000 1,500 Machine hours Receiving hours The company's normal activity is 4,000 direct labor hours. Chapter 4 Activity-Based Costing Required: 1. Determine the unit cost for cach model using direct labor hours to apply over- head. 2. Determine the unit cost for each model using the four activity drivers. 3. Which method produces the more accurate cost assignment? Why?
Expert Answer:
Answer rating: 100% (QA)
Plantwide Overhead rate Overhead costs are all the costs other than direct material and direct labor that are not tied to the production Kenton 2019 Businesses use the manufacturing overhead rate to a... View the full answer
Related Book For
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins
Posted Date:
Students also viewed these accounting questions
-
1. Plata Company has identified the following overhead activities, costs, and activity drivers for the coming year: Plata produces two models of microwave ovens with the following activity demands:...
-
The investment committee of a company has identified the following seven projects with positive NPVs. If the board of directors has approved a $3 million capital budget for the current period, which...
-
The investment committee of a company has identified the following seven projects with positive NPVs. If the board of directors has approved a $4.5 million capital budget for the current period,...
-
In Problems, use a calculator to give a decimal approximation of the numbers to three decimal places. e 4
-
In exercise 29.7, we considered how low teaser interest rates impact borrowing when college students are present-biased. We now consider the difference in borrowing responses to such teaser rates by...
-
1. According to the case, what external trends did managers at Kohls have to deal with? In addition to these, what other external components might be important to these managers? (See Exhibit) How...
-
Petitioner Atlantic Marine Company was a contractor located in Virginia. It entered into a subcontract with J-Crew Management, Inc., a Texas corporation, that contained a forum-selection clause...
-
Rodriguez, Inc., is preparing its direct labor budget for 2014 from the following production budget based on a calendar year. Quarter Units 1 ..... 20,000 2 ..... 25,000 3 ..... 35,000 4 ..... 30,000...
-
Sales for a new car is expected to grow according to the equation: S = 150000(1-e -0.06t ), where t = months i) Calculate the number of cars sold after one year. ii) Calculate the number of cars sold...
-
Explain why expected net income is also called "accretion of discount."
-
A Lessee insists on structuring a lease that will have the easier accounting result of an operating lease that is, equal annual lease payments expensed as equal annual expenses The equipment leased...
-
Some would argue that there is a radical divergence between family systems therapies and the more traditional psychotherapeutic approaches. Others would challenge this view, arguing that there are...
-
What kinds of images and descriptions of family do you see in the story? Do the narrator and Sonny understand who and what constitutes a family in the same way? What happens when Sonny moves in with...
-
What would be the purpose of a capital investment decision based on the details below: ABC Incorporated manufactures the best products in town. Because the business is thriving several departments...
-
Mary must make payments on $ 4 0 , 0 0 0 in student loans at 7 % interest compounded monthly, a house payment on an outstanding $ 1 0 0 , 0 0 0 home loan compounded monthly for 3 0 years, and wants...
-
Describe the page you chose and discuss how it differs and resembles today's sports pages. Choose a particular story on the page and discuss the writing of that articleis it interesting, in today's...
-
Virtual Teams: Making It Work Virtual teams are composed of employees who are physically dispersed throughout the nation or around the world. They are linked by various forms of electronic...
-
Find the radius of convergence of? 1.2.3 1.3.5 (2n-1) r2n+1 -1
-
Jill Lewis is the office manager of PureBreds, Inc. Her office has 30 employees whose collective job is to process applications by dog owners who want to register their pets with the firm. There is...
-
List some of the behavioral, implementation, and legal problems to be anticipated in the use of relevant cost analysis.
-
Henderson Equipment Company has produced a pilot run of 50 units of a recently developed cylinder used in its finished products. The cylinder has a one-year life, and the company expects to produce...
-
True or False: Annual worth analysis is the most popular DCF measure of economic worth.
-
Consider a palletizer at a bottling plant that has a first cost of \($150,000,\) operating and maintenance costs of \($17,500\) per year, and an estimated net salvage value of \($25,000\) at the end...
-
True or False: Unless non-monetary considerations dictate otherwise, choose the mutually exclusive investment alternative that has the greatest annual worth over the planning horizon.
Study smarter with the SolutionInn App