Wood Limited, a newly established manufacturing company in the Southern Industrial area, manufactures two types of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Wood Limited, a newly established manufacturing company in the Southern Industrial area, manufactures two types of Boardroom Tables. One type of these Boardroom tables is sold locally and the other type is exported to Angola. While the designs are identical, the material used is different to cater for the different climatic conditions of the market segments. The two products are produced with the same equipment and they utilise the same overhead resources. In 2021, the company has budgeted to manufacture 60 000 Boardroom Tables for the local market and 40 000 Boardroom Tables for export to Angola. The manufacturing is done in batches of 1 000 Boardroom Tables each. Other details of the company's activities, inputs and outputs are as follows: Analysis of overhead costs Material handling Material procurement Machine set-up Quality control Production NS 200 000 NS 40 000 NS 180 000 NS 270 000 N$ 610 000 Depreciation NS 200 000 TOTAL N$ 1 500 000 Analysis of cost drivers Overhead Cost driver Material movements Local Еxport Material handling Material procurement Machine set-ups Quality control Depreciation 100 60 Number of orders 200 200 Number of set-ups / batch Number of inspections Machine hours / unit Direct labour hours / unit 150 100 5 Production 0.75 0.50 The company management has been using the "traditional costing approach" to allocate overheads between the two products, with direct labour hours as allocation base. They are thinking of applying the Activity-Based Costing System. REQUIRED: Calculate the overhead cost per unit, using; The Traditional Costing Approach The Activity-Based Costing Approach Marks 3.1 3.2 28 Wood Limited, a newly established manufacturing company in the Southern Industrial area, manufactures two types of Boardroom Tables. One type of these Boardroom tables is sold locally and the other type is exported to Angola. While the designs are identical, the material used is different to cater for the different climatic conditions of the market segments. The two products are produced with the same equipment and they utilise the same overhead resources. In 2021, the company has budgeted to manufacture 60 000 Boardroom Tables for the local market and 40 000 Boardroom Tables for export to Angola. The manufacturing is done in batches of 1 000 Boardroom Tables each. Other details of the company's activities, inputs and outputs are as follows: Analysis of overhead costs Material handling Material procurement Machine set-up Quality control Production NS 200 000 NS 40 000 NS 180 000 NS 270 000 N$ 610 000 Depreciation NS 200 000 TOTAL N$ 1 500 000 Analysis of cost drivers Overhead Cost driver Material movements Local Еxport Material handling Material procurement Machine set-ups Quality control Depreciation 100 60 Number of orders 200 200 Number of set-ups / batch Number of inspections Machine hours / unit Direct labour hours / unit 150 100 5 Production 0.75 0.50 The company management has been using the "traditional costing approach" to allocate overheads between the two products, with direct labour hours as allocation base. They are thinking of applying the Activity-Based Costing System. REQUIRED: Calculate the overhead cost per unit, using; The Traditional Costing Approach The Activity-Based Costing Approach Marks 3.1 3.2 28
Expert Answer:
Answer rating: 100% (QA)
Robbin Limited Activity Cost Driver Rate Total Activity Activity Cost O... View the full answer
Related Book For
Data Analysis and Decision Making
ISBN: 978-0538476126
4th edition
Authors: Christian Albright, Wayne Winston, Christopher Zappe
Posted Date:
Students also viewed these accounting questions
-
The Adrenaline company manufactures ATVs. Adrenaline manufactures two types of ATVs: Regular and Hyper. The Hyper ATV uses a special Turbo engine, which increases the acceleration and power of the...
-
A company manufactures two types of trucks. Each truck must go through the painting shop and the assembly shop. If the painting shop were completely devoted to painting type 1 trucks, 800 per day...
-
A company manufactures two types of electric hedge trimmers, one of which is cordless. The cord-type trimmer requires 2 hours to make, and the cordless model requires 4 hours. The company has only...
-
How do patterns of mental illness differ according to population? Name examples of where one psychological symptom could be interpreted in two different ways based on age/gender/identified problem.
-
Ellynn Kole is the assistant chief accountant at Doman Company, a manufacturer of computer chips and cellular phones. The company presently has total sales of $20 million. It is the end of the first...
-
Selected T-accounts for Jade Mineral Corporation at December 31, 2023, are duplicated below. Dividends were not paid during 2021 or 2022. Dividends of $4.80 per common share were declared and paid...
-
A [0/90/0] laminated beam of length \(L\) is simply supported at both ends and is loaded by a single concentrated load \(P\) at midspan. Find the equation for the maximum flexural deflection of the...
-
Comprehensive Error Analysis on March 5, 2011, you were hired by Hemingway Inc., a closely held company, as a staff member of its newly created internal auditing department. While reviewing the...
-
1- What is the significance of these three matrices regarding their relevance for strategic planning fpr southwest airlines? 2- Describe the key information for each and how information from each...
-
Jackson's Vacuum company makes two types of vacuums: Basic and Advanced. The factory is set up into 3 working departments. Both vacuums utilize process #1 to assemble the basic components. Those...
-
If Cherise observes that the risk-free rate is 3.7% and the market return is 18.0% then, according to the Capital Asset Pricing Model (CAPM), Cherise knows that for a stock with a beta of 1.9, the...
-
Why are the three essentials crucial for each BPM activity?
-
Assume that instead of a uniform distribution, in this market, the quality of cars X follows a triangle distribution from 0 to 100 as depicted in Figure 8.7. Given this new distribution, the formula...
-
List the four main influencers of behavior noting if they are a motivator or constraint and why.
-
Why are printed reports needed in addition to the screen outputs?
-
Briefly describe why organizational trust is critical.
-
In this problem, we are dealing with packaging boxes. You will need to create three classes (all in the same file please, for ease of grading): 1. A RegularBox class (do not declare as public) 2. A...
-
CLASS PERIO Solving Linear Equations: Variable on Both Sides Solve each equation. 1) 6r+ 7 = 13 + 7r 3) -7x-3x+2=-8x-8 5)-14 +66+7-26=1+5b 7) n-3n = 14-4n 2) 13-4x=1-x 4)-8-x= x - 4x 6)n+2=-14-n 8)...
-
A manager of boiler drums wants to use regression analysis to predict the number of worker-hours needed to erect the drums in future projects. Data for 36 randomly selected boilers have been...
-
In the peak-load pricing model, the demand functions have positive and negative coefficients of prices. The negative coefficients indicate that as the price of a product increases, demand for that...
-
In the Red Brand two-product problem, we assumed that the unit shipping costs are the same for both products. Modify the spreadsheet model so that each product has its own unit shipping costs. You...
-
Financial items for George Karatsis IT Services on 31 May 2024 are presented below in alphabetical order. Required (a) Prepare a statement of financial position similar to the one in figure 2.2. (b)...
-
Rebecca Tallance operates a rent a dress business from her home. She keeps her accounting records for business activities completely separate from her records for personal activities. At 30 June...
-
During the year ended 30 June 2024, Skilled Services, a provider of temporary secretary personnel, had collected receipts from clients for a total value of \($250000.\) Wages of \($136000\) had been...
Study smarter with the SolutionInn App