Question
1. Foxx Company incurs $410000 overhead costs each year in its three main departments, setup ($35000), machining ($265000), and packing ($110000). The setup department performs
1. Foxx Company incurs $410000 overhead costs each year in its three main departments, setup ($35000), machining ($265000), and packing ($110000). The setup department performs 40 setups per year, the machining department works 5000 hours per year, and the packing department packs 500 orders per year. Information about Foxxs two products is as follows:
Product A1 | Product B1 | |
Number of setups | 20 | 20 |
Machining hours | 1000 | 4000 |
Orders packed | 150 | 350 |
Number of products manufactured | 600 | 400 |
If machining hours are used as a base under traditional casting, how much overhead is assigned to Product A1 each year?
2.Zimmerman Company manufactures two products, Board 12 and Case 165. Zimmermans overhead costs consist of setting up machines, $2240000; machining, $5350000; and inspecting, $1680000. Information on the two products is:
Board 12 | Case 165 | |
Direct labor hours | 15000 | 25000 |
Machine setups | 600 | 400 |
Machine hours | 24000 | 26000 |
Inspections | 800 | 700 |
Overhead applied to Board 12 using traditional costing using direct labor hours is
3.Tidwell Industries has the following overhead costs and cost drivers. Direct labor hours are estimated at 100000 for the year.
Activity Cost Pool | Cost Driver | Est. Overhead | Cost Driver Activity | |
Ordering and Receiving | Orders | $ 55000 | 500 orders | |
Machine Setup | Setups | 238500 | 450 setups | |
Machining | Machine hours | 1337500 | 125000 MH | |
Assembly | Parts | 1070000 | 1000000 parts | |
Inspection | Inspections | 235000 | 500 inspections |
If overhead is applied using traditional costing based on direct labor hours, the overhead application rate is
4.Foxx Company incurs $465000 overhead costs each year in its three main departments, setup ($25000), machining ($305000), and packing ($135000). The setup department performs 40 setups per year, the machining department works 5000 hours per year, and the packing department packs 500 orders per year. Information about Foxxs two products is as follows:
Product A1 | Product B1 | |
Number of setups | 20 | 20 |
Machining hours | 1000 | 4000 |
Orders packed | 150 | 350 |
Number of products manufactured | 600 | 400 |
Using ABC, how much overhead is assigned to Product A1 each year?
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