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CHICO Company is exploring the possibility of adopting activity-based costing (ABC) to assign manufacturing overhead costs to products. A more detailed examination of the company's manufacturing overhead costs reveals that the MOH is comprised of the following activities and related costs: Activity setting up machines machining use inspecting material requisitions purchasing Cost setting up machines machining use inspecting material requisitions purchasing Activity driver (cost driver) $300,000 $1,400,000 $600,000 $750,000 $200,000 # purchase orders Information on the expected activity levels for the two products is: Activity Standard Product Expected activity level for each # machine set ups # machine hours # inspections # material requisitions activity 25 machine set ups 18,000 machine hrs. 100 inspections 3,000 requisitions 50 purchase orders Expected activity level in total for the two products 500 100,000 1,500 15,000 500 Deluxe Product Expected activity level for each activity 475 machine set ups 82,000 machine hrs. 1,400 inspections 12,000 requisitions 450 purchase orders Expected activity level in TOTAL for the two products 500 set ups 100,000 machine hrs. 1,500 inspections 15,000 requisitions 500 purchase orders 02 Styles costing and allocates manufacturing overhead based on direct labour hours. It has estimated manufacturing overhead of $3,250,000 and 20,000 direct labour hours. Required - Part 1 (record your answers on the separate answer sheet provided) a) What is the pre-determined manufacturing overhead rate used by CHICO company to allocate MOH? b) The company plans to produce 10,000 standard units and 5,000 deluxe units. A standard unit requires.5 direct labour hour (30 min) to produce and a deluxe unit requires 3 direct labour hours to produce. Direct materials Direct labour Applied manufacturing overhead? Total manufacturing costs? Manufacturing cost per unit? 1. II. III. Standard 10,000 units Total $500,000 $150,000 Deluxe 5,000 units Total $750,000 $300,,000 How much manufacturing overhead will be applied to the standard and deluxe products? What is the total manufacturing cost for the standard and deluxe units? What is the manufacturing cost per unit for the standard and deluxe units? Font Information on the expected activity levels for the two products is: Standard Product Expected activity level for each activity 25 machine set ups 18,000 machine hrs. setting up machines machining use inspecting material requisitions purchasing 1. Activity II. Paragraph III. 1 Normal No Spac... Heading 1 Deluxe Product Expected activity level for each activity 475 machine set ups 82,000 machine hrs. 100 inspections 3,000 requisitions 1,400 inspections 12,000 requisitions 50 purchase orders 450 purchase orders Heading 2 Styles Expected activity level in TOTAL for the two products Required - Part II( record your answers on the separate answer sheet provided) a) Determine the activity rates for each of the five activities. b) The company plans to produce 10,000 standard units and 5,000 deluxe units. Determine the (10 marks) amount of overhead to be allocated / applied to each product (Standard and Deluxe) using activity- based costing to allocate manufacturing overhead The total manufacturing costs for each product under ABC The unit manufacturing cost for each product under ABC Title 500 set ups 100,000 machine hrs. 1,500 inspections 15,000 requisitions 500 purchase orders Subtitle Subtle Em Question 3 (25 marks) Part 1 CHICO Company manufactures two products, Standard and Deluxe. The company is currently using traditional costing and allocates manufacturing overhead based on direct labour hours. It has estimated manufacturing overhead of $3,250,000 and 20,000 direct labour hours. Required - Part 1 ( record your answers on the separate answer sheet provided) a) What is the pre-determined manufacturing overhead rate used by CHICO company to allocate MOH? I b) The company plans to produce 10,000 standard units and 5,000 deluxe units. A standard unit requires .5 direct labour hour (30 min) to produce and a deluxe unit requires 3 direct labour hours to produce. CHICO Company is exploring the possibility of adopting activity-based costing (ABC) to assign manufacturing overhead costs to products. A more detailed examination of the company's manufacturing overhead costs reveals that the MOH is comprised of the following activities and related costs: Activity setting up machines machining use inspecting material requisitions purchasing Cost setting up machines machining use inspecting material requisitions purchasing Activity driver (cost driver) $300,000 $1,400,000 $600,000 $750,000 $200,000 # purchase orders Information on the expected activity levels for the two products is: Activity Standard Product Expected activity level for each # machine set ups # machine hours # inspections # material requisitions activity 25 machine set ups 18,000 machine hrs. 100 inspections 3,000 requisitions 50 purchase orders Expected activity level in total for the two products 500 100,000 1,500 15,000 500 Deluxe Product Expected activity level for each activity 475 machine set ups 82,000 machine hrs. 1,400 inspections 12,000 requisitions 450 purchase orders Expected activity level in TOTAL for the two products 500 set ups 100,000 machine hrs. 1,500 inspections 15,000 requisitions 500 purchase orders 02 Styles costing and allocates manufacturing overhead based on direct labour hours. It has estimated manufacturing overhead of $3,250,000 and 20,000 direct labour hours. Required - Part 1 (record your answers on the separate answer sheet provided) a) What is the pre-determined manufacturing overhead rate used by CHICO company to allocate MOH? b) The company plans to produce 10,000 standard units and 5,000 deluxe units. A standard unit requires.5 direct labour hour (30 min) to produce and a deluxe unit requires 3 direct labour hours to produce. Direct materials Direct labour Applied manufacturing overhead? Total manufacturing costs? Manufacturing cost per unit? 1. II. III. Standard 10,000 units Total $500,000 $150,000 Deluxe 5,000 units Total $750,000 $300,,000 How much manufacturing overhead will be applied to the standard and deluxe products? What is the total manufacturing cost for the standard and deluxe units? What is the manufacturing cost per unit for the standard and deluxe units? Font Information on the expected activity levels for the two products is: Standard Product Expected activity level for each activity 25 machine set ups 18,000 machine hrs. setting up machines machining use inspecting material requisitions purchasing 1. Activity II. Paragraph III. 1 Normal No Spac... Heading 1 Deluxe Product Expected activity level for each activity 475 machine set ups 82,000 machine hrs. 100 inspections 3,000 requisitions 1,400 inspections 12,000 requisitions 50 purchase orders 450 purchase orders Heading 2 Styles Expected activity level in TOTAL for the two products Required - Part II( record your answers on the separate answer sheet provided) a) Determine the activity rates for each of the five activities. b) The company plans to produce 10,000 standard units and 5,000 deluxe units. Determine the (10 marks) amount of overhead to be allocated / applied to each product (Standard and Deluxe) using activity- based costing to allocate manufacturing overhead The total manufacturing costs for each product under ABC The unit manufacturing cost for each product under ABC Title 500 set ups 100,000 machine hrs. 1,500 inspections 15,000 requisitions 500 purchase orders Subtitle Subtle Em Question 3 (25 marks) Part 1 CHICO Company manufactures two products, Standard and Deluxe. The company is currently using traditional costing and allocates manufacturing overhead based on direct labour hours. It has estimated manufacturing overhead of $3,250,000 and 20,000 direct labour hours. Required - Part 1 ( record your answers on the separate answer sheet provided) a) What is the pre-determined manufacturing overhead rate used by CHICO company to allocate MOH? I b) The company plans to produce 10,000 standard units and 5,000 deluxe units. A standard unit requires .5 direct labour hour (30 min) to produce and a deluxe unit requires 3 direct labour hours to produce. CHICO Company is exploring the possibility of adopting activity-based costing (ABC) to assign manufacturing overhead costs to products. A more detailed examination of the company's manufacturing overhead costs reveals that the MOH is comprised of the following activities and related costs: Activity setting up machines machining use inspecting material requisitions purchasing Cost setting up machines machining use inspecting material requisitions purchasing Activity driver (cost driver) $300,000 $1,400,000 $600,000 $750,000 $200,000 # purchase orders Information on the expected activity levels for the two products is: Activity Standard Product Expected activity level for each # machine set ups # machine hours # inspections # material requisitions activity 25 machine set ups 18,000 machine hrs. 100 inspections 3,000 requisitions 50 purchase orders Expected activity level in total for the two products 500 100,000 1,500 15,000 500 Deluxe Product Expected activity level for each activity 475 machine set ups 82,000 machine hrs. 1,400 inspections 12,000 requisitions 450 purchase orders Expected activity level in TOTAL for the two products 500 set ups 100,000 machine hrs. 1,500 inspections 15,000 requisitions 500 purchase orders 02 Styles costing and allocates manufacturing overhead based on direct labour hours. It has estimated manufacturing overhead of $3,250,000 and 20,000 direct labour hours. Required - Part 1 (record your answers on the separate answer sheet provided) a) What is the pre-determined manufacturing overhead rate used by CHICO company to allocate MOH? b) The company plans to produce 10,000 standard units and 5,000 deluxe units. A standard unit requires.5 direct labour hour (30 min) to produce and a deluxe unit requires 3 direct labour hours to produce. Direct materials Direct labour Applied manufacturing overhead? Total manufacturing costs? Manufacturing cost per unit? 1. II. III. Standard 10,000 units Total $500,000 $150,000 Deluxe 5,000 units Total $750,000 $300,,000 How much manufacturing overhead will be applied to the standard and deluxe products? What is the total manufacturing cost for the standard and deluxe units? What is the manufacturing cost per unit for the standard and deluxe units? Font Information on the expected activity levels for the two products is: Standard Product Expected activity level for each activity 25 machine set ups 18,000 machine hrs. setting up machines machining use inspecting material requisitions purchasing 1. Activity II. Paragraph III. 1 Normal No Spac... Heading 1 Deluxe Product Expected activity level for each activity 475 machine set ups 82,000 machine hrs. 100 inspections 3,000 requisitions 1,400 inspections 12,000 requisitions 50 purchase orders 450 purchase orders Heading 2 Styles Expected activity level in TOTAL for the two products Required - Part II( record your answers on the separate answer sheet provided) a) Determine the activity rates for each of the five activities. b) The company plans to produce 10,000 standard units and 5,000 deluxe units. Determine the (10 marks) amount of overhead to be allocated / applied to each product (Standard and Deluxe) using activity- based costing to allocate manufacturing overhead The total manufacturing costs for each product under ABC The unit manufacturing cost for each product under ABC Title 500 set ups 100,000 machine hrs. 1,500 inspections 15,000 requisitions 500 purchase orders Subtitle Subtle Em Question 3 (25 marks) Part 1 CHICO Company manufactures two products, Standard and Deluxe. The company is currently using traditional costing and allocates manufacturing overhead based on direct labour hours. It has estimated manufacturing overhead of $3,250,000 and 20,000 direct labour hours. Required - Part 1 ( record your answers on the separate answer sheet provided) a) What is the pre-determined manufacturing overhead rate used by CHICO company to allocate MOH? I b) The company plans to produce 10,000 standard units and 5,000 deluxe units. A standard unit requires .5 direct labour hour (30 min) to produce and a deluxe unit requires 3 direct labour hours to produce. CHICO Company is exploring the possibility of adopting activity-based costing (ABC) to assign manufacturing overhead costs to products. A more detailed examination of the company's manufacturing overhead costs reveals that the MOH is comprised of the following activities and related costs: Activity setting up machines machining use inspecting material requisitions purchasing Cost setting up machines machining use inspecting material requisitions purchasing Activity driver (cost driver) $300,000 $1,400,000 $600,000 $750,000 $200,000 # purchase orders Information on the expected activity levels for the two products is: Activity Standard Product Expected activity level for each # machine set ups # machine hours # inspections # material requisitions activity 25 machine set ups 18,000 machine hrs. 100 inspections 3,000 requisitions 50 purchase orders Expected activity level in total for the two products 500 100,000 1,500 15,000 500 Deluxe Product Expected activity level for each activity 475 machine set ups 82,000 machine hrs. 1,400 inspections 12,000 requisitions 450 purchase orders Expected activity level in TOTAL for the two products 500 set ups 100,000 machine hrs. 1,500 inspections 15,000 requisitions 500 purchase orders 02 Styles costing and allocates manufacturing overhead based on direct labour hours. It has estimated manufacturing overhead of $3,250,000 and 20,000 direct labour hours. Required - Part 1 (record your answers on the separate answer sheet provided) a) What is the pre-determined manufacturing overhead rate used by CHICO company to allocate MOH? b) The company plans to produce 10,000 standard units and 5,000 deluxe units. A standard unit requires.5 direct labour hour (30 min) to produce and a deluxe unit requires 3 direct labour hours to produce. Direct materials Direct labour Applied manufacturing overhead? Total manufacturing costs? Manufacturing cost per unit? 1. II. III. Standard 10,000 units Total $500,000 $150,000 Deluxe 5,000 units Total $750,000 $300,,000 How much manufacturing overhead will be applied to the standard and deluxe products? What is the total manufacturing cost for the standard and deluxe units? What is the manufacturing cost per unit for the standard and deluxe units? Font Information on the expected activity levels for the two products is: Standard Product Expected activity level for each activity 25 machine set ups 18,000 machine hrs. setting up machines machining use inspecting material requisitions purchasing 1. Activity II. Paragraph III. 1 Normal No Spac... Heading 1 Deluxe Product Expected activity level for each activity 475 machine set ups 82,000 machine hrs. 100 inspections 3,000 requisitions 1,400 inspections 12,000 requisitions 50 purchase orders 450 purchase orders Heading 2 Styles Expected activity level in TOTAL for the two products Required - Part II( record your answers on the separate answer sheet provided) a) Determine the activity rates for each of the five activities. b) The company plans to produce 10,000 standard units and 5,000 deluxe units. Determine the (10 marks) amount of overhead to be allocated / applied to each product (Standard and Deluxe) using activity- based costing to allocate manufacturing overhead The total manufacturing costs for each product under ABC The unit manufacturing cost for each product under ABC Title 500 set ups 100,000 machine hrs. 1,500 inspections 15,000 requisitions 500 purchase orders Subtitle Subtle Em Question 3 (25 marks) Part 1 CHICO Company manufactures two products, Standard and Deluxe. The company is currently using traditional costing and allocates manufacturing overhead based on direct labour hours. It has estimated manufacturing overhead of $3,250,000 and 20,000 direct labour hours. Required - Part 1 ( record your answers on the separate answer sheet provided) a) What is the pre-determined manufacturing overhead rate used by CHICO company to allocate MOH? I b) The company plans to produce 10,000 standard units and 5,000 deluxe units. A standard unit requires .5 direct labour hour (30 min) to produce and a deluxe unit requires 3 direct labour hours to produce. CHICO Company is exploring the possibility of adopting activity-based costing (ABC) to assign manufacturing overhead costs to products. A more detailed examination of the company's manufacturing overhead costs reveals that the MOH is comprised of the following activities and related costs: Activity setting up machines machining use inspecting material requisitions purchasing Cost setting up machines machining use inspecting material requisitions purchasing Activity driver (cost driver) $300,000 $1,400,000 $600,000 $750,000 $200,000 # purchase orders Information on the expected activity levels for the two products is: Activity Standard Product Expected activity level for each # machine set ups # machine hours # inspections # material requisitions activity 25 machine set ups 18,000 machine hrs. 100 inspections 3,000 requisitions 50 purchase orders Expected activity level in total for the two products 500 100,000 1,500 15,000 500 Deluxe Product Expected activity level for each activity 475 machine set ups 82,000 machine hrs. 1,400 inspections 12,000 requisitions 450 purchase orders Expected activity level in TOTAL for the two products 500 set ups 100,000 machine hrs. 1,500 inspections 15,000 requisitions 500 purchase orders 02 Styles costing and allocates manufacturing overhead based on direct labour hours. It has estimated manufacturing overhead of $3,250,000 and 20,000 direct labour hours. Required - Part 1 (record your answers on the separate answer sheet provided) a) What is the pre-determined manufacturing overhead rate used by CHICO company to allocate MOH? b) The company plans to produce 10,000 standard units and 5,000 deluxe units. A standard unit requires.5 direct labour hour (30 min) to produce and a deluxe unit requires 3 direct labour hours to produce. Direct materials Direct labour Applied manufacturing overhead? Total manufacturing costs? Manufacturing cost per unit? 1. II. III. Standard 10,000 units Total $500,000 $150,000 Deluxe 5,000 units Total $750,000 $300,,000 How much manufacturing overhead will be applied to the standard and deluxe products? What is the total manufacturing cost for the standard and deluxe units? What is the manufacturing cost per unit for the standard and deluxe units? Font Information on the expected activity levels for the two products is: Standard Product Expected activity level for each activity 25 machine set ups 18,000 machine hrs. setting up machines machining use inspecting material requisitions purchasing 1. Activity II. Paragraph III. 1 Normal No Spac... Heading 1 Deluxe Product Expected activity level for each activity 475 machine set ups 82,000 machine hrs. 100 inspections 3,000 requisitions 1,400 inspections 12,000 requisitions 50 purchase orders 450 purchase orders Heading 2 Styles Expected activity level in TOTAL for the two products Required - Part II( record your answers on the separate answer sheet provided) a) Determine the activity rates for each of the five activities. b) The company plans to produce 10,000 standard units and 5,000 deluxe units. Determine the (10 marks) amount of overhead to be allocated / applied to each product (Standard and Deluxe) using activity- based costing to allocate manufacturing overhead The total manufacturing costs for each product under ABC The unit manufacturing cost for each product under ABC Title 500 set ups 100,000 machine hrs. 1,500 inspections 15,000 requisitions 500 purchase orders Subtitle Subtle Em Question 3 (25 marks) Part 1 CHICO Company manufactures two products, Standard and Deluxe. The company is currently using traditional costing and allocates manufacturing overhead based on direct labour hours. It has estimated manufacturing overhead of $3,250,000 and 20,000 direct labour hours. Required - Part 1 ( record your answers on the separate answer sheet provided) a) What is the pre-determined manufacturing overhead rate used by CHICO company to allocate MOH? I b) The company plans to produce 10,000 standard units and 5,000 deluxe units. A standard unit requires .5 direct labour hour (30 min) to produce and a deluxe unit requires 3 direct labour hours to produce. CHICO Company is exploring the possibility of adopting activity-based costing (ABC) to assign manufacturing overhead costs to products. A more detailed examination of the company's manufacturing overhead costs reveals that the MOH is comprised of the following activities and related costs: Activity setting up machines machining use inspecting material requisitions purchasing Cost setting up machines machining use inspecting material requisitions purchasing Activity driver (cost driver) $300,000 $1,400,000 $600,000 $750,000 $200,000 # purchase orders Information on the expected activity levels for the two products is: Activity Standard Product Expected activity level for each # machine set ups # machine hours # inspections # material requisitions activity 25 machine set ups 18,000 machine hrs. 100 inspections 3,000 requisitions 50 purchase orders Expected activity level in total for the two products 500 100,000 1,500 15,000 500 Deluxe Product Expected activity level for each activity 475 machine set ups 82,000 machine hrs. 1,400 inspections 12,000 requisitions 450 purchase orders Expected activity level in TOTAL for the two products 500 set ups 100,000 machine hrs. 1,500 inspections 15,000 requisitions 500 purchase orders 02 Styles costing and allocates manufacturing overhead based on direct labour hours. It has estimated manufacturing overhead of $3,250,000 and 20,000 direct labour hours. Required - Part 1 (record your answers on the separate answer sheet provided) a) What is the pre-determined manufacturing overhead rate used by CHICO company to allocate MOH? b) The company plans to produce 10,000 standard units and 5,000 deluxe units. A standard unit requires.5 direct labour hour (30 min) to produce and a deluxe unit requires 3 direct labour hours to produce. Direct materials Direct labour Applied manufacturing overhead? Total manufacturing costs? Manufacturing cost per unit? 1. II. III. Standard 10,000 units Total $500,000 $150,000 Deluxe 5,000 units Total $750,000 $300,,000 How much manufacturing overhead will be applied to the standard and deluxe products? What is the total manufacturing cost for the standard and deluxe units? What is the manufacturing cost per unit for the standard and deluxe units? Font Information on the expected activity levels for the two products is: Standard Product Expected activity level for each activity 25 machine set ups 18,000 machine hrs. setting up machines machining use inspecting material requisitions purchasing 1. Activity II. Paragraph III. 1 Normal No Spac... Heading 1 Deluxe Product Expected activity level for each activity 475 machine set ups 82,000 machine hrs. 100 inspections 3,000 requisitions 1,400 inspections 12,000 requisitions 50 purchase orders 450 purchase orders Heading 2 Styles Expected activity level in TOTAL for the two products Required - Part II( record your answers on the separate answer sheet provided) a) Determine the activity rates for each of the five activities. b) The company plans to produce 10,000 standard units and 5,000 deluxe units. Determine the (10 marks) amount of overhead to be allocated / applied to each product (Standard and Deluxe) using activity- based costing to allocate manufacturing overhead The total manufacturing costs for each product under ABC The unit manufacturing cost for each product under ABC Title 500 set ups 100,000 machine hrs. 1,500 inspections 15,000 requisitions 500 purchase orders Subtitle Subtle Em Question 3 (25 marks) Part 1 CHICO Company manufactures two products, Standard and Deluxe. The company is currently using traditional costing and allocates manufacturing overhead based on direct labour hours. It has estimated manufacturing overhead of $3,250,000 and 20,000 direct labour hours. Required - Part 1 ( record your answers on the separate answer sheet provided) a) What is the pre-determined manufacturing overhead rate used by CHICO company to allocate MOH? I b) The company plans to produce 10,000 standard units and 5,000 deluxe units. A standard unit requires .5 direct labour hour (30 min) to produce and a deluxe unit requires 3 direct labour hours to produce. CHICO Company is exploring the possibility of adopting activity-based costing (ABC) to assign manufacturing overhead costs to products. A more detailed examination of the company's manufacturing overhead costs reveals that the MOH is comprised of the following activities and related costs: Activity setting up machines machining use inspecting material requisitions purchasing Cost setting up machines machining use inspecting material requisitions purchasing Activity driver (cost driver) $300,000 $1,400,000 $600,000 $750,000 $200,000 # purchase orders Information on the expected activity levels for the two products is: Activity Standard Product Expected activity level for each # machine set ups # machine hours # inspections # material requisitions activity 25 machine set ups 18,000 machine hrs. 100 inspections 3,000 requisitions 50 purchase orders Expected activity level in total for the two products 500 100,000 1,500 15,000 500 Deluxe Product Expected activity level for each activity 475 machine set ups 82,000 machine hrs. 1,400 inspections 12,000 requisitions 450 purchase orders Expected activity level in TOTAL for the two products 500 set ups 100,000 machine hrs. 1,500 inspections 15,000 requisitions 500 purchase orders 02 Styles costing and allocates manufacturing overhead based on direct labour hours. It has estimated manufacturing overhead of $3,250,000 and 20,000 direct labour hours. Required - Part 1 (record your answers on the separate answer sheet provided) a) What is the pre-determined manufacturing overhead rate used by CHICO company to allocate MOH? b) The company plans to produce 10,000 standard units and 5,000 deluxe units. A standard unit requires.5 direct labour hour (30 min) to produce and a deluxe unit requires 3 direct labour hours to produce. Direct materials Direct labour Applied manufacturing overhead? Total manufacturing costs? Manufacturing cost per unit? 1. II. III. Standard 10,000 units Total $500,000 $150,000 Deluxe 5,000 units Total $750,000 $300,,000 How much manufacturing overhead will be applied to the standard and deluxe products? What is the total manufacturing cost for the standard and deluxe units? What is the manufacturing cost per unit for the standard and deluxe units? Font Information on the expected activity levels for the two products is: Standard Product Expected activity level for each activity 25 machine set ups 18,000 machine hrs. setting up machines machining use inspecting material requisitions purchasing 1. Activity II. Paragraph III. 1 Normal No Spac... Heading 1 Deluxe Product Expected activity level for each activity 475 machine set ups 82,000 machine hrs. 100 inspections 3,000 requisitions 1,400 inspections 12,000 requisitions 50 purchase orders 450 purchase orders Heading 2 Styles Expected activity level in TOTAL for the two products Required - Part II( record your answers on the separate answer sheet provided) a) Determine the activity rates for each of the five activities. b) The company plans to produce 10,000 standard units and 5,000 deluxe units. Determine the (10 marks) amount of overhead to be allocated / applied to each product (Standard and Deluxe) using activity- based costing to allocate manufacturing overhead The total manufacturing costs for each product under ABC The unit manufacturing cost for each product under ABC Title 500 set ups 100,000 machine hrs. 1,500 inspections 15,000 requisitions 500 purchase orders Subtitle Subtle Em Question 3 (25 marks) Part 1 CHICO Company manufactures two products, Standard and Deluxe. The company is currently using traditional costing and allocates manufacturing overhead based on direct labour hours. It has estimated manufacturing overhead of $3,250,000 and 20,000 direct labour hours. Required - Part 1 ( record your answers on the separate answer sheet provided) a) What is the pre-determined manufacturing overhead rate used by CHICO company to allocate MOH? I b) The company plans to produce 10,000 standard units and 5,000 deluxe units. A standard unit requires .5 direct labour hour (30 min) to produce and a deluxe unit requires 3 direct labour hours to produce. CHICO Company is exploring the possibility of adopting activity-based costing (ABC) to assign manufacturing overhead costs to products. A more detailed examination of the company's manufacturing overhead costs reveals that the MOH is comprised of the following activities and related costs: Activity setting up machines machining use inspecting material requisitions purchasing Cost setting up machines machining use inspecting material requisitions purchasing Activity driver (cost driver) $300,000 $1,400,000 $600,000 $750,000 $200,000 # purchase orders Information on the expected activity levels for the two products is: Activity Standard Product Expected activity level for each # machine set ups # machine hours # inspections # material requisitions activity 25 machine set ups 18,000 machine hrs. 100 inspections 3,000 requisitions 50 purchase orders Expected activity level in total for the two products 500 100,000 1,500 15,000 500 Deluxe Product Expected activity level for each activity 475 machine set ups 82,000 machine hrs. 1,400 inspections 12,000 requisitions 450 purchase orders Expected activity level in TOTAL for the two products 500 set ups 100,000 machine hrs. 1,500 inspections 15,000 requisitions 500 purchase orders 02 Styles costing and allocates manufacturing overhead based on direct labour hours. It has estimated manufacturing overhead of $3,250,000 and 20,000 direct labour hours. Required - Part 1 (record your answers on the separate answer sheet provided) a) What is the pre-determined manufacturing overhead rate used by CHICO company to allocate MOH? b) The company plans to produce 10,000 standard units and 5,000 deluxe units. A standard unit requires.5 direct labour hour (30 min) to produce and a deluxe unit requires 3 direct labour hours to produce. Direct materials Direct labour Applied manufacturing overhead? Total manufacturing costs? Manufacturing cost per unit? 1. II. III. Standard 10,000 units Total $500,000 $150,000 Deluxe 5,000 units Total $750,000 $300,,000 How much manufacturing overhead will be applied to the standard and deluxe products? What is the total manufacturing cost for the standard and deluxe units? What is the manufacturing cost per unit for the standard and deluxe units? Font Information on the expected activity levels for the two products is: Standard Product Expected activity level for each activity 25 machine set ups 18,000 machine hrs. setting up machines machining use inspecting material requisitions purchasing 1. Activity II. Paragraph III. 1 Normal No Spac... Heading 1 Deluxe Product Expected activity level for each activity 475 machine set ups 82,000 machine hrs. 100 inspections 3,000 requisitions 1,400 inspections 12,000 requisitions 50 purchase orders 450 purchase orders Heading 2 Styles Expected activity level in TOTAL for the two products Required - Part II( record your answers on the separate answer sheet provided) a) Determine the activity rates for each of the five activities. b) The company plans to produce 10,000 standard units and 5,000 deluxe units. Determine the (10 marks) amount of overhead to be allocated / applied to each product (Standard and Deluxe) using activity- based costing to allocate manufacturing overhead The total manufacturing costs for each product under ABC The unit manufacturing cost for each product under ABC Title 500 set ups 100,000 machine hrs. 1,500 inspections 15,000 requisitions 500 purchase orders Subtitle Subtle Em Question 3 (25 marks) Part 1 CHICO Company manufactures two products, Standard and Deluxe. The company is currently using traditional costing and allocates manufacturing overhead based on direct labour hours. It has estimated manufacturing overhead of $3,250,000 and 20,000 direct labour hours. Required - Part 1 ( record your answers on the separate answer sheet provided) a) What is the pre-determined manufacturing overhead rate used by CHICO company to allocate MOH? I b) The company plans to produce 10,000 standard units and 5,000 deluxe units. A standard unit requires .5 direct labour hour (30 min) to produce and a deluxe unit requires 3 direct labour hours to produce.
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Managerial Accounting
ISBN: 978-0176223311
1st Canadian Edition
Authors: Karen Wilken Braun, Wendy Tietz, Walter Harrison, Rhonda Pyp
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