Question
1. A company has two products: A1 and B2. It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for
1. A company has two products: A1 and B2. It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activity cost pools:
Budgeted Activity | |||||||||
Activity Cost Pool | Budgeted Cost | Product A1 | Product B2 | ||||||
Activity 1 | $ | 63,000 | 2,700 | 6,300 | |||||
Activity 2 | $ | 78,000 | 3,740 | 6,260 | |||||
Activity 3 | $ | 110,000 | 8,700 | 2,300 | |||||
Annual production and sales level of Product A1 is 9,980 units, and the annual production and sales level of Product B2 is 23,810 units. What is the approximate overhead cost per unit of Product B2 under activity-based costing?
2.
A company has two products: A and B. It uses activity-based costing and has prepared the following analysis showing budgeted cost and activity for each of its three activity cost pools:
Budgeted Activity | |||||||||
Activity Cost Pool | Budgeted Cost | Product A | Product B | ||||||
Activity 1 | $ | 106,000 | 4,900 | 4,700 | |||||
Activity 2 | $ | 81,000 | 6,400 | 7,400 | |||||
Activity 3 | $ | 131,000 | 4,400 | 7,150 | |||||
Annual production and sales level of Product A is 36,200 units, and the annual production and sales level of Product B is 71,450 units. What is the approximate overhead cost per unit of Product A under activity-based costing?
3.
Lake Erie Company uses a plantwide overhead rate with machine hours as the allocation base. Next year, 627,143 units are expected to be produced taking 0.70 machine hours each. How much overhead will be assigned to each unit produced given the following estimated amounts?
Estimated: | Department 1 | Department 2 | |||||
Manufacturing overhead costs | $ | 3,121,500 | $ | 1,541,000 | |||
Direct labor hours | 157,000 | DLH | 257,000 | DLH | |||
Machine hours | 257,000 | MH | 182,000 | MH | |||
|
4.
Bond Company uses a plantwide overhead rate with direct labor hours as the allocation base. Use the following information to solve for the amount of direct labor hours estimated per unit of product G2.
Direct material cost per unit of G2 | $ | 7 | |
Total estimated manufacturing overhead | $ | 280,000 | |
Total cost per unit of G2 | $ | 32 | |
Total estimated direct labor hours | 160,000 | DLH | |
Direct labor cost per unit of G2 | $ | 5.25 | |
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