1) Sukhu Corporation's activity-based costing system has three activity cost pools: Fabricating. Setting Up, and Other. The company's overhead costs have already been allocated to these cost pools as follows: Fabricating Setting Up Other $ S 19,900 10,300 Costs in the Fabricating cost pool are assigned to products based on machine hours (MH) and costs in the Setting Up Cost pool are assigned to products based on the number of batches. Costs in the Other cost pool are not assigned to products. The following table shows the machine-hours and number of batches associated with each of the company's two products: Product MO Product P9 Total MHS 7.500 2.500 10.000 Batches 300 700 1.000 Required: Calculate activity rates for each activity cost pool using activity-based costing and assign the costs to the two products. 2) Weisgarber Corporation is conducting a time-driven activity-based costing study in its Customer Service Department. The company has provided the following data to aid in that study: Weisgarber Corporation Customer Support Department Data Inputs Resource Data: Number of employees Average salary per employee Weeks of employment per year Minutes available per week (40 hours x 60 minutes) Practical capacity percentage 19 $ 39,960 -50 2.400 90 % Activity Data: Minutes per unit of the activity Processing Orders 16 Resolving Queries Credit Reviews Customer G Cost Object Data: Number of orders processed Number of queries resolved Number of credit reviews processed All Customers 49,020 23,320 2,110 Required: a. Prepare a time-driven activity-based costing Customer Cost Analysis report that determines the total Customer Service Department cost assigned to Customer G. b. Prepare a time-driven activity-based costing Capacity Analysis report for the Customer Service Department that determines the impact on expenses of matching capacity with demand. 3) The direct labor budget of Faver Corporation for the upcoming year 2 contains the following details concerning budgeted direct labor-hours 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Budgeted direct labor-hours 9,000 9.200 9.500 9.800 The company's variable manufacturing overhead rate is $4.00 per direct labor-hour, and the company's fixed manufacturing overhead is $60,000 per quarter. The only soncash item included in the fixed manufacturing overhead is depreciation which is $20,000 per quarter. 80% of manufacturing overhead are paid in the month incurred with the remaining costs are paid the first week of the next month. The accounts payable balance December 31, Year ! is $36.000 Required: Prepare Faver Corporation's manufacturing overhead budget for the upcoming fiscal year. Show both manufacturing overhead expense and cash disbursements for manufacturing overhead 4) Dinham Kennel uses tenant-days as its measure of activity an animal housed in the kennel for one day is counted as one tenant day. During March, the kennel budgeted for 2,000 tenant-days, but its actual level of activity was 2.010 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for March: Data used in budgeting Fixed element per month Revenue Wages and salaries Food and supplies Facility expenses Administrative expenses Total expenses 3.000 400 9,600 7,800 20.800 Variable element per tenant-day 35.40 6.60 12.20 2.30 0.20 21.30 $ Actual results for March Revenue Wages and salaries Food and supplies Facility expenses Administrative expenses 69,576 16,204 25,008 14,122 8,238
