Sturdy Doors, Inc., produces two types of doors, interior and exterior. The company's simple costing system...
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Sturdy Doors, Inc., produces two types of doors, interior and exterior. The company's simple costing system has two direct cost categories (materials and labor) and one indirect cost pool. The simple costing system allocates indirect costs on the basis of machine-hours. Recently, the owners of Sturdy Doors have been concerned about a decline in the market share for their interior doors, usually their biggest seller. Information related to Sturdy Doors production for the most recent year follows: (Click the icon to view the production data.) a (Click the icon to view additional information.) Read the requirements. Requirement 1. Calculate the cost of an interior door and an exterior door under the existing simple costing system. Before calculating the cost of an interior and exterior door, begin by calculating the overhead rate under the simple costing system. First select the formula, then enter the applicable amounts and calculate the rate. (Round your answer to the nearest cent. Abbreviations used: bgt. budgeted, qty quantity.) Budgeted overhead rate Simple costing system = Data table Interior Exterior Units sold 3,200 1,800 Selling price 160 $ 260 Direct material cost per unit 40 $ 50 Direct manufacturing labor cost per hour $ 16 $ 16 Direct manufacturing labor-hours per unit 1.50 2.30 Production runs 35 75 Material moves 72 162 Machine setups 40 130 Machine-hours 5,500 4,500 Number of inspections 220 140 %24 %24 %24 More info The owners have heard of other companies in the industry that are now using an activity-based costing system and are curious how an ABC system would affect their product costing decisions. After analyzing the indirect cost pool for Sturdy Doors, the owners identify six activities as generating indirect costs: production scheduling, material handling, machine setup, assembly, inspection, and marketing. Sturdy Doors collected the follovwing data related to the indirect cost activities: Activity Activity Cost Activity Cost Driver Production scheduling 84,700 Production runs Material handling 43,290 Material moves Machine setup 20,740 Machine setups Assembly $ 60,000 Machine-hours Inspection $ 14,400 Number of inspections Marketing costs were determined to be 4% of the sales revenue for each type of door. %24 %24 %24 Sturdy Doors, Inc., produces two types of doors, interior and exterior. The company's simple costing system has two direct cost categories (materials and labor) and one indirect cost pool. The simple costing system allocates indirect costs on the basis of machine-hours. Recently, the owners of Sturdy Doors have been concerned about a decline in the market share for their interior doors, usually their biggest seller. Information related to Sturdy Doors production for the most recent year follows: (Click the icon to view the production data.) a (Click the icon to view additional information.) Read the requirements. Requirement 1. Calculate the cost of an interior door and an exterior door under the existing simple costing system. Before calculating the cost of an interior and exterior door, begin by calculating the overhead rate under the simple costing system. First select the formula, then enter the applicable amounts and calculate the rate. (Round your answer to the nearest cent. Abbreviations used: bgt. budgeted, qty quantity.) Budgeted overhead rate Simple costing system = Data table Interior Exterior Units sold 3,200 1,800 Selling price 160 $ 260 Direct material cost per unit 40 $ 50 Direct manufacturing labor cost per hour $ 16 $ 16 Direct manufacturing labor-hours per unit 1.50 2.30 Production runs 35 75 Material moves 72 162 Machine setups 40 130 Machine-hours 5,500 4,500 Number of inspections 220 140 %24 %24 %24 More info The owners have heard of other companies in the industry that are now using an activity-based costing system and are curious how an ABC system would affect their product costing decisions. After analyzing the indirect cost pool for Sturdy Doors, the owners identify six activities as generating indirect costs: production scheduling, material handling, machine setup, assembly, inspection, and marketing. Sturdy Doors collected the follovwing data related to the indirect cost activities: Activity Activity Cost Activity Cost Driver Production scheduling 84,700 Production runs Material handling 43,290 Material moves Machine setup 20,740 Machine setups Assembly $ 60,000 Machine-hours Inspection $ 14,400 Number of inspections Marketing costs were determined to be 4% of the sales revenue for each type of door. %24 %24 %24
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Related Book For
Cost Accounting A Managerial Emphasis
ISBN: 978-0133428704
15th edition
Authors: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
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