Crane Inc. has two types of handbags: standard and custom. The controller has decided to use...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Crane Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system wer used. Two activity cost pools were developed: machining (machine hours) and machine setup (number of setups). The total estimated machine hours is 2,700, and the total estimated number of setups is 510. Presented below is information related to the company's operations. Direct labor costs Machine hours Number of setups Standard $ 50,000 1,500 120 Custom $ 100,000 1,200 390 Total estimated overhead costs are $ 291,000. Overhead cost allocated to the machining activity cost pool is $ 189,000, and $ 102,000 is allocated to the machine setup activity cost pool. Acti Compute the overhead rate using the traditional (plantwide) approach information related to each product's use of cost drivers. (Round answer to O decimal places, e.g. 12.) Predetermined overhead rate eTextbook and Media Compute the overhead rates using the activity-based costing approach. Machining Machine setup $ % of direct labor cost $ per machine hour per setup hour Activ Go to Determine the difference in allocation between the two approaches. Traditional costing Standard Custom Activity-based costing Standard Custom $ $ $ $ Crane Inc. has two types of handbags: standard and custom. The controller has decided to use a plantwide overhead rate based on direct labor costs. The president has heard of activity-based costing and wants to see how the results would differ if this system wer used. Two activity cost pools were developed: machining (machine hours) and machine setup (number of setups). The total estimated machine hours is 2,700, and the total estimated number of setups is 510. Presented below is information related to the company's operations. Direct labor costs Machine hours Number of setups Standard $ 50,000 1,500 120 Custom $ 100,000 1,200 390 Total estimated overhead costs are $ 291,000. Overhead cost allocated to the machining activity cost pool is $ 189,000, and $ 102,000 is allocated to the machine setup activity cost pool. Acti Compute the overhead rate using the traditional (plantwide) approach information related to each product's use of cost drivers. (Round answer to O decimal places, e.g. 12.) Predetermined overhead rate eTextbook and Media Compute the overhead rates using the activity-based costing approach. Machining Machine setup $ % of direct labor cost $ per machine hour per setup hour Activ Go to Determine the difference in allocation between the two approaches. Traditional costing Standard Custom Activity-based costing Standard Custom $ $ $ $
Expert Answer:
Answer rating: 100% (QA)
Answer a Overhead rate traditional method Estimated overheadestimated labor ... View the full answer
Related Book For
Project Management A Managerial Approach
ISBN: 978-0470226216
7th Edition
Authors: Jack R. Meredith, Samuel J. Mantel,
Posted Date:
Students also viewed these accounting questions
-
The directed reading at the end of this chapter describes four tools for crises in projects. Might any of these be useful to Iceland in their planning?
-
The On the Job example at the end of this chapter provides a brief description of many training methods used in management development. To understand those methods better, the class breaks into teams...
-
You are graduating from college at the end of this semester and after reading. The Business of Life box in this chapter, you have decided to invest $5,000 at the end of each year into a Roth IRA for...
-
Dickletton Attorneys' policy is to bank all receipts in its Trust bank account and at the end of each month the bookkeeper transfers the relevant funds due to Dickletton Attorneys from the trust to...
-
Entities must juggle the costs of holding cash with the costs of not having enough cash. Explain and discuss.
-
F(x) = 1 e-2x x > 0
-
Refer to the information in Exercise 16-12. Prepare a process cost summary using the FIFO method. (Round cost per equivalent unit calculations to two decimal places.) Data From Exercise 16-12 The...
-
Equipment replacement decisions and performance evaluation. Bob Moody manages the Knoxville plant of George Manufacturing. He has been approached by a representative of Darda Engineering regarding...
-
Solve the following DES. a) y (4) - (3) -3y"+5y'-2y=0
-
Ralph and Kathy Gump are married with one 20-year-old dependent child. Ralph earns a total of $98,000 and estimates their itemized deductions to be $28,500 for the year. Kathy is not employed. Use...
-
Starting from rest, Angel and Britney skateboard down a hill as shown. Angel rides down the steep side while Britney rides down the shallow side. Angel has more mass than Britney. Assume that...
-
An example of government ownership of a monopoly is ______. a) the Tennessee Valley Authority b) the New York State Public Service Commission c) AT&T d) General Motors.
-
At the output at which MC = MR, suppose that price were higher than AVC but lower than ATC. What should the firm do in the short run and the long run? Explain your answer.
-
At the output at which a firm maximizes its profits, what two variables are equal? At the output at which a firm minimizes its losses, what two variables are equal?
-
How do the relative elasticities of demand and supply affect the relative tax burdens of the buyer and the seller?
-
What do you think are the defining characteristics of a science? Do you think macroeconomics should be called a science? Why or why not?
-
2. The beam in the figure is made of material having modulus of elasticity E = 200 GPa . The moment of inertia of segments AB and CD of the beam is I = 6.77 10-6 m, while the moment of inertia of...
-
Rosalie owns 50% of the outstanding stock of Salmon Corporation. In a qualifying stock redemption, Salmon distributes $80,000 to Rosalie in exchange for one-half of her shares, which have a basis of...
-
List the seven main characteristics of a project and briefly describe the important features of each.
-
How might we plan for risks that we cannot identify in the risk management section of the project plan?
-
What items should be included in the audit status report?
-
Compare the full sets of public service announcements (PSAs) represented by Figures 7.11, 7.12, and 7.13 by visiting http://city.milwaukee.gov/health/Safe-Sleep-Campaign. Which set is most effective?...
-
In a pair or in small groups, find three online shopping sites that sell similar types of merchandise (e.g., Backcountry.com, Moosejaw.com, REI.com). Consider the following questions: Who are the...
-
Ask someone to follow a set of instructions or to fill out a form. As an alternative, you also might test a document youve created for a course. You also may try ordering food from a website, such as...
Study smarter with the SolutionInn App