Question 6 of 8 Commercial Residential Revenues $288,000 $484,000 Direct materials costs $30,000 $50,000 Direct labor...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Question 6 of 8 Commercial Residential Revenues $288,000 $484,000 Direct materials costs $30,000 $50,000 Direct labor costs 120,000 280,000 Overhead costs 78,000 228,000 184,000 514,000 Operating income (loss) $60,000 $(30,000) 1.17/1.75 The controller, Peggy Kingman, is concerned about the residential product line. She cannot understand why this line is not more profitable given that the installations of window coverings are less complex for residential customers. In addition, the residential client base resides in close proximity to the company office, so travel costs are not as expensive on a per client visit for residential customers. As a result, she has decided to take a closer look at the overhead costs assigned to the two product lines to determine whether a more accurate product costing model can be developed. Here are the three activity cost pools and related information she developed: Activity Cost Pools Scheduling and travel Estimated Overhead Cost Drivers $78,000 Hours of travel Setup time 84,000 Number of setups Supervision 100,000 Direct labor cost Estimated Use of Cost Drivers per Product Commercial Residential Scheduling and travel 700 600 Setup time 350 250 (a1) Your answer is correct. Compute the activity-based overhead rates for each of the three cost pools. (Round overhead rate for supervision to 2 decimal places, eg 0.38.) Overhead Rates Scheduling and travel $ 60 per hour Setup time $ 140 per setup Supervision $ 0.25 per dollar (a2) eTextbook and Media Your answer is correct. Determine the overhead cost assigned to each product line. (b) Commercial Residential Scheduling and travel $ 42000 $ 36000 Setup time $ 49000 $ 35000 Supervision $ $ 30000 70000 Total cost assigned $ 121000 $ 141000 eTextbook and Media * Your answer is incorrect. Compute the operating income for each product line, using the activity-based overhead rates. Operating income (loss) Commercial $ Residential $ eTextbook and Media Save for Later 60000 Attempts: 1 of 3 used Attempts: 1 of 3 used Attempts: 1 of 3 used Submit Answer Question 6 of 8 Commercial Residential Revenues $288,000 $484,000 Direct materials costs $30,000 $50,000 Direct labor costs 120,000 280,000 Overhead costs 78,000 228,000 184,000 514,000 Operating income (loss) $60,000 $(30,000) 1.17/1.75 The controller, Peggy Kingman, is concerned about the residential product line. She cannot understand why this line is not more profitable given that the installations of window coverings are less complex for residential customers. In addition, the residential client base resides in close proximity to the company office, so travel costs are not as expensive on a per client visit for residential customers. As a result, she has decided to take a closer look at the overhead costs assigned to the two product lines to determine whether a more accurate product costing model can be developed. Here are the three activity cost pools and related information she developed: Activity Cost Pools Scheduling and travel Estimated Overhead Cost Drivers $78,000 Hours of travel Setup time 84,000 Number of setups Supervision 100,000 Direct labor cost Estimated Use of Cost Drivers per Product Commercial Residential Scheduling and travel 700 600 Setup time 350 250 (a1) Your answer is correct. Compute the activity-based overhead rates for each of the three cost pools. (Round overhead rate for supervision to 2 decimal places, eg 0.38.) Overhead Rates Scheduling and travel $ 60 per hour Setup time $ 140 per setup Supervision $ 0.25 per dollar (a2) eTextbook and Media Your answer is correct. Determine the overhead cost assigned to each product line. (b) Commercial Residential Scheduling and travel $ 42000 $ 36000 Setup time $ 49000 $ 35000 Supervision $ $ 30000 70000 Total cost assigned $ 121000 $ 141000 eTextbook and Media * Your answer is incorrect. Compute the operating income for each product line, using the activity-based overhead rates. Operating income (loss) Commercial $ Residential $ eTextbook and Media Save for Later 60000 Attempts: 1 of 3 used Attempts: 1 of 3 used Attempts: 1 of 3 used Submit Answer
Expert Answer:
Related Book For
Managerial Accounting Tools for business decision making
ISBN: 978-0470477144
5th edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Posted Date:
Students also viewed these accounting questions
-
Consider the one-dimensional wall shown in the sketch, which is initially at a uniform temperature T j and is suddenly subjected to the convection boundary condition with a fluid at T . For a...
-
Venus Creations sells window treatments (shades, blinds, and awnings) to both commercial and residential customers. The following information relates to its budgeted operations for the current year....
-
Concentric shells r = 20 cm and r = 30 cm are held at V = 0 and V = 50, respectively. If the space between them is filled with dielectric material ( = 3.10, a = 1012 S/m), find: (a) V, E, and D, (b)...
-
Integral control of the plant Gp(s) = 3/(5s+ 1) Results in a system that is too oscillatory. Will D action improve this situation?
-
A 5-cm-diameter cylinder that is 50 cm long is at 55 oC and is to be cooled by crossflow immersion in a 10 oC stream. From Fig. 1.8, if the desired initial cooling rate is 300 W, what should be the...
-
Following data relate to an oil engine working on Otto cycle : Compression ratio \(=6 ;\) B.P. \(=14.8 \mathrm{~kW}\); Suction pressure \(=1\) bar and temp. \(=27^{\circ} \mathrm{C}\); Relative...
-
An electronics engineer is interested in the effect on tube conductivity of five different types of coating for cathode ray tubes in a telecommunications system display device. The following...
-
Add more relevant law and law sections. Also add relevant case law. Issue: Is Earth Care, in its capacity as a GreenCo shareholder, able to contest the contact's validity on the grounds of violation...
-
The table shows information about the number of games consoles sold each month by a shop. Month Jun Jul Aug Sep Oct Nov Dec Number of games consoles 60 85 50 100 94 120 06 Find MSE by using Trend...
-
What product would you like to use to explore the supply chain? Why did you select that specific product? Explain. In your responses to your peers, offer any initial comments or thoughts you may have...
-
Peacemaking criminology is said to be a way of life . How is individual transformation believed to be the means to realize social change?
-
Blair, CPA, uses the cash receipts and disbursements method of reporting. In Year 7, a client gave Blair 100 shares of a listed corporation's stock in full satisfaction of a $5,000 accounting fee the...
-
War Eagle Distributing wants to determine the most efficient method of transporting its new product- The Charles Barkley Paperweight. This item has been offered for sale for several years, but Mr....
-
Find lim 0 2 sin(20) 1 - sin(0)
-
Respond to the following statement and question. What does this mean for you as a leader in this diverse society and professional work world? **The need for developing diversity skills on the part of...
-
A number of years ago the United Food and Commercial Workers Union organized 800 workers of the 1035 employees at one of the Wilson Brothers food operations in Toronto, Ontario. The employees include...
-
When and why should exchange rates change under a fixed-exchange-rate system?
-
Using the diagram in exercise 5, illustrate the effect of the change in Japanese tastes if exchange rates are fixed. What will happen to the foreign exchange market equilibrium? Data from in exercise...
-
How does a currency speculator profit from exchange-rate changes? Give an example of a profitable speculation.
Study smarter with the SolutionInn App