Question: Student Name: _____________________________________ Activity-Based Costing Requirements: FILL IN THE . Blanks MOH costs: Rent, Utilities, Insurance $ 600,000 Quality control person assigned to batch runs
| Student Name: _____________________________________ | |||||||||
| Activity-Based Costing | Requirements: | | FILL IN THE . | "Blanks" | |||||
| MOH costs: | Rent, Utilities, Insurance | $ 600,000 | |||||||
| Quality control person assigned to batch runs | 36,000 | ||||||||
| Machine maintenance cost.. | 70,000 | ||||||||
| Indirect Materials. | 44,000 | ||||||||
| Indirect Labor: Supervisors.. | 30,000 | ||||||||
| $ 780,000 | |||||||||
| Other data: | Couches | Chairs | Ottomans | Totals | |||||
| Number of machine hours | 430 | 225 | 45 | 700 | Machine hrs | ||||
| Number of batch runs | 260 | 180 | 60 | 500 | Batch runs | ||||
| Number of designs | 9 | 4 | 2 | 15 | designs | ||||
| Sq ft of plant occupancy | 40,000 | 18,000 | 2,000 | 60,000 | Sq ft of Plant | ||||
| Number of units made | 3,000 | 1,800 | 1,200 | 6,000 | units | ||||
| Sq ft of leather (DM) used | 72,000 | 25,000 | 3,000 | 100,000 | sq ft of leather | ||||
| Requirement #1: Allocate MOH utilizing DL$ | MOH ratio | MOH allocation rate | |||||||
| Calculate the Predetermined MOH allocation rate using DL$ as the cost driver..use the cells to the right for your calculations. After determining the MOH allocation rate, allocate MOH to all three products below. Fill-in all blank cells. | |||||||||
| Costs: | Couches | Chairs | Ottomans | Totals | |||||
| Direct Materials | $ 116,000 | $ 48,000 | $ 12,000 | $ 176,000 | |||||
| Direct Labor | 151,000 | 123,400 | 115,600 | 390,000 | |||||
| Allocate MOH in these cells | |||||||||
| Total Inventoriable Costs | |||||||||
| Total Cost per unit (rounded) | |||||||||
| Requirement #2: Allocate MOH with Activity Based Costing. | |||||||||
| ABC allocation information: | |||||||||
| MOH Cost category | Activity Base Selected | Activity Measure | |||||||
| Rent, Utilities, Insurance | |||||||||
| Quality control person | |||||||||
| Machine maintenance cost | |||||||||
| Indirect Materials | |||||||||
| Indirect Labor: Supervisors | |||||||||
| Calculate Activity Base Cost Drivers: Fill-in the blanks. | |||||||||
| Cost category | MOH ratio | MOH allocation rate | |||||||
| Rent, Utilities, Insurance | |||||||||
| Quality control person | |||||||||
| Machine maintenance cost | |||||||||
| Indirect Materials | |||||||||
| Indirect Labor: Supervisors | |||||||||
| Update cost data | Couches | Chairs | Ottomans | Totals | |||||
| Direct Materials | $ 116,000 | $ 48,000 | $ 12,000 | $ 176,000 | |||||
| Direct Labor | 151,000 | 123,400 | 115,600 | 390,000 | |||||
| Rent, Utilities, Insurance | |||||||||
| Quality control person | |||||||||
| Machine maintenance cost | |||||||||
| Indirect Materials | |||||||||
| Indirect Labor: Supervisors | |||||||||
| Total Inventoriable Costs | |||||||||
| Total Cost per unit | |||||||||
| Requirement #3: Total Cost Comparison | |||||||||
| Summarize your Total Cost per unit from Requirement 1 & 2. Assuming the company is a price setter, calculate the price per unit for both applications in order to achieve a 40% gross margin ratio per product line. | |||||||||
| Couches | Chairs | Ottomans | |||||||
| Total Cost per unit utilizing DL$ (Req1) | |||||||||
| Price per unit to achieve 40% gross margin | |||||||||
| Total Cost per unit with ABC | |||||||||
| Price per unit to achieve 40% gross margin | |||||||||
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