4041 ON 6% Thu 9:04 PM nts AutoSave ( OFF) 71 6 . 6 4 - Ch 4 Homework... Home Insert Q ~ Search Sheet Draw Page Layout Formulas Data Review > > Share Commer Idea A Conditional Formatting v Clipboard Font Alignment Number Format as Table Cell Styles v Cells Editing Ideas Sen B50 * X V fx A B C D 16 me the following activities occurred in February for each product: E F G 17 Nerds Stars Fashions 18 Units produced 1000 units 400 units 540 units 19 Direct material costs $5,000.00 $2,060.00 $2,290.00 20 Direct labor hours 430 hours 160 hours 150 hours 21 Orders 6 orders 6 orders 4 orders 22 Production Runs 2 runs runs 2 runs 23 Pounds of materials 430 lbs 320 lbs 350 lbs 24 Machine-hours 230 mach hrs 180 mach hrs 100 mach hrs 25 Inspections 4 inspections 3 inspections 2 inspections 26 Units Shipped 970 units 540 units 280 units 27 28 uired: Complete parts a, b, c, and d as shown below -- SHOW ALL WORK. 29 30 ompute overhead allocation rates (POHR) for each of the cost drivers and for direct labor. ROUND TO NEAREST CENT or 2 decimal places. 31 x Hint? Activity Rate (or P 32 Activity Estimated OH Costs Estimated cost driver Activity Rate (predetermined overhead rate) $29,000 130 223.080 per run 33 Production setup $51,400 210 244.760 per order 34 Order processing $31,800 6600 4.820 per pound (Ib) 35 Materials handling $70,500 9700 7.270 per machine hour 36 Equip deprec & maint $46,300 140 330.710 per inspection 37 Quality mangement $70,200 28250 2.480 per unit 38 Packing and shipping 39 6.644 40 $299,200 45030 per direct labor hour hour Direct labor * Hint? Base is the Direct DL Rate Self Check: 1 total overhead for estimated cost using DL as base) 42 43 44 impute the production costs (DM, DL and Overhead applied) using direct labor as the ONLY allocation base for overhead. ROUND to the nearest dollar, if necessary (NO decimals) 45 w calculations in the row below) Fashions Nerds Stars Direct material Feb 46 $2,060.00 $2,290.00 Hint? $5,000.00 Aren an 47 ct materials A Homework Settings + + 100 - Enter 10% 2 X MUF R 2AutoSave OFF A6 68 Ch 4 Homework.. Q Search Sheet Its Home Insert Draw Page Layout Formulas Data Review Share Com A Conditional Formatting v de Clipboard Font Format as Table v Alignment Number Cells Cell Styles ~ Editing Ideas B50 X V fx B D E F 2 3 Problem A Sunshield Company makes three types of sunglasses: Nerds, Stars, and Fashions. Sunshield presently allocates overhead to products using a rate based on direct labor-hours. A consultant recommended that Sunshield switch to activity-based costing. Management decided to give ABC a try and identified the following activities, cost drivers, and costs for a typical year for each activity center. Use this information to compute the overhead rates for each cost driver. Activity Cost Driver Overhead Costs Est. Cost driver units Production setup Production runs $29,000 130 runs Order processing Orders $51,400 210 orders 8 Materials handling Pounds of materials used $31,800 6600 pounds Equipment depreciation and Machine-hours $70,500 9700 machine-hours 9 maintenance 10 Quality Control Inspections $46,300 140 inspections 11 Packaging and Shipping Units Shipped $70,200 28250 units 12 Total Overhead $299,200 13 4 In addition, there are 12200 direct labor-hours in a typical year and direct labor costs are $23 per hour. 15 6 Assume the following activities occurred in February for each product: 17 Nerds Stars Fashions 540 units 18 Units produced 1000 units 400 units Direct material costs $5,000.00 $2,060.00 $2,290.00 19 430 hours 160 hours 150 hours 20 Direct labor hours 21 Orders 6 orders 6 orders 4 orders 22 Production Runs 2 runs 2 runs 2 runs 23 Pounds of materials 430 lbs 320 lbs 350 lbs 24 Machine-hours 230 mach hrs 180 mach hrs 100 mach hrs 3 inspections 2 inspections 25 Inspections 4 inspections A Homework Settings + + 1009 Enter IT 0% 2 R X O MacBook AirON 66% Thu 9:04 PM AutoSave OFF Abu Ja = Ch 4 Homework. Home Insert Q ~ Search Sheet Draw Page Layout Formulas Data Review > > Share A Comments Conditional Formatting v Clipboard Font Alignment O Number Format as Table v Cell Styles v Cells Editing Ideas Sensitiv B50 X V fx A D 43 F G 44 (b)Compute the production costs (DM, DL and Overhead applied) using direct labor as the ONLY allocation base for overhead. 45 (Show calculations in the row below) 46 ROUND to the nearest dollar, if necessary (NO decimals) Nerds Stars Fashions 47 Direct materials $5,000.00 $2,060.00 $2,290.00 48 Direct labor * Hint ? Direct material Febr $430.00 $160.00 $150.00 Hint? (Feb. DL hours x Dire 49 (show calculations in this row) 50 Overhead applied * Hint ? (Feb DL hours x POHR 51 (show calculations in this row) 52 TOTAL COST 53 Stars Self Check: 54 55 ( c) Compute the production costs (DM, DL, and Overhead applied using Activity based costing. (Show calculations in the row below) 56 ROUND to the nearest dollar, if necessary (NO decimals) 57 Nerds Stars Fashions Same as part b abov 58 Direct Materials $5,000.00 $2,060.00 $2,290.00 * Hint ? Hint ? Same as part b abov 59 Direct Labor $430.00 $160.00 $150.00 60 Overhead applied: heading only -- do not enter in this line Hint ? Actual production ru 61 Production setup 62 (show calculations in this row) Hint ? Actual orders for eac 63 Order processing 64 (show calculations in this row) Hint ? Actual pounds of ma 65 Materials handling 66 (show calculations in this row) x Hint? Actual machine hour 67 Equip deprec & maint Hint ? Actual inspections fo 68 (show calculations in this row) 59 Quality mangement x Hint ? Actual units shipped 70 (show calculations in this row) 71 Packing and shipping 72 (show calculations in this row) $2,220.00 $2,440.00 $5,430.00 73 TOTAL COST 74 Nerds Self Check: 75 (d) Analysis: Management has seen your numbers and wants to know how you account for the discrepancy between the product costs s as the allocation base and using activity-based costing. Write a brief response to management. + + 100% Homework Settings Enter IT 2 MacBook Air