Speedrat Company manufactures specialised gaming mice. It has provided the following information so that overhead costs...
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Speedrat Company manufactures specialised gaming mice. It has provided the following information so that overhead costs could be assigned to each job: Activity Name Material handling Machining Packing The company received a job order $11 from a customer that had the following production details: Direct material Direct labour No of units to be produced No of machine hours No of packing orders (a) (b) Required: (Round up all the answers to 2 decimal places if necessary) Using machine hours as the basis of allocating overheads, compute: (i) the plantwide overhead rate per machine hour. (c) Overhead Cost $ 12,000 38,000 10,000 (d) (ii) Activity Driver 30,000 units 2,000 machine hours 8,000 packing orders $37,000 $9,400 6,000 700 2,000 (ii) (iii) the total overhead cost assigned to job order $11. Using the associated activity driver, calculate the activity rate for: Material handling. Machining. Packing. (2 marks) (1 mark) (3 marks) Calculate the unit product cost for job order S11 using activity-based costing. (6 marks) Briefly explain why activity-based cost assignment is more accurate than a single plantwide overhead rate. (3 marks) Speedrat Company manufactures specialised gaming mice. It has provided the following information so that overhead costs could be assigned to each job: Activity Name Material handling Machining Packing The company received a job order $11 from a customer that had the following production details: Direct material Direct labour No of units to be produced No of machine hours No of packing orders (a) (b) Required: (Round up all the answers to 2 decimal places if necessary) Using machine hours as the basis of allocating overheads, compute: (i) the plantwide overhead rate per machine hour. (c) Overhead Cost $ 12,000 38,000 10,000 (d) (ii) Activity Driver 30,000 units 2,000 machine hours 8,000 packing orders $37,000 $9,400 6,000 700 2,000 (ii) (iii) the total overhead cost assigned to job order $11. Using the associated activity driver, calculate the activity rate for: Material handling. Machining. Packing. (2 marks) (1 mark) (3 marks) Calculate the unit product cost for job order S11 using activity-based costing. (6 marks) Briefly explain why activity-based cost assignment is more accurate than a single plantwide overhead rate. (3 marks)
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a 1 Plantwide overhead rate per machine hour Total Overhead Cost Total Machine Hours 38000 2000 1900 ... View the full answer
Related Book For
Cornerstones of Managerial Accounting
ISBN: 978-0324660135
3rd Edition
Authors: Mowen, Hansen, Heitger
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