6-41 Solution : http://www.chegg.com/homework-help/comprehensive-problem-abc-costing-animal-gear-company-makes-chapter-6-problem-35p-solution-9780133428834-exc
6-40 Comprehensive problem with ABC costing. Animal Gear Company makes two pet carriers, the Cat-allac and the Dog-eriffic. They are both made of plastic with metal doors, but the Cat-allac is smal ler. Information for the two products for the month of April is given in the following tables: Input Prices Direct materials Plastc Meta $5 per pound $4 per pound $10 per direct manufacturing labor-hour Direct manufacturing labor 242 CHAPTER 6 MASTER BUDGET AND RESPONSBILITY ACCOUNTING Input Qusntities per Unit of Output Cat-allac Direct materials 6 pounds 1 pound 5 hours Past c Meta Direct manufacturing labor-hours Machine-hours (MHI 4pounds 0.5 pounds 3 hours 11 MH 19 MH Inventory Information, Direct Materials Beginning inventory Target ending inventory Cost of beginning inventory Plastic 290 pounds 410 pounds Metal 0 pounds 65 pounds $217 $1,102 Animal Gear accounts for direct materials using a FIFO cost-flow assumption. Sales and Inventory Information, Finished Goods Cat-llac Dog-eriffic Expected sales in units Selling price Target ending inventory in units Beginning inventory in units Beginning inventory in dollars S 310 10 19 S 205 10 $1,000 Animal Gear uses a FIFO cost-flow assumption for finished-goods inventory. Animal Gear uses an activity-based costing system and classifies overhead into three activity pools: Setup. Processing, and Inspection. Activity rates for these activities are $105 per setup-hour, $10 per machine-hour, and $15 per inspection-hour, respectively. Other information follows: Number of units per batch Setup time per batch Inspection time per batch Cat-allac 25 1.50 hours 0.5 hour 1.75 hours 0.7 hour 6-40 Comprehensive problem with ABC costing. Animal Gear Company makes two pet carriers, the Cat-allac and the Dog-eriffic. They are both made of plastic with metal doors, but the Cat-allac is smal ler. Information for the two products for the month of April is given in the following tables: Input Prices Direct materials Plastc Meta $5 per pound $4 per pound $10 per direct manufacturing labor-hour Direct manufacturing labor 242 CHAPTER 6 MASTER BUDGET AND RESPONSBILITY ACCOUNTING Input Qusntities per Unit of Output Cat-allac Direct materials 6 pounds 1 pound 5 hours Past c Meta Direct manufacturing labor-hours Machine-hours (MHI 4pounds 0.5 pounds 3 hours 11 MH 19 MH Inventory Information, Direct Materials Beginning inventory Target ending inventory Cost of beginning inventory Plastic 290 pounds 410 pounds Metal 0 pounds 65 pounds $217 $1,102 Animal Gear accounts for direct materials using a FIFO cost-flow assumption. Sales and Inventory Information, Finished Goods Cat-llac Dog-eriffic Expected sales in units Selling price Target ending inventory in units Beginning inventory in units Beginning inventory in dollars S 310 10 19 S 205 10 $1,000 Animal Gear uses a FIFO cost-flow assumption for finished-goods inventory. Animal Gear uses an activity-based costing system and classifies overhead into three activity pools: Setup. Processing, and Inspection. Activity rates for these activities are $105 per setup-hour, $10 per machine-hour, and $15 per inspection-hour, respectively. Other information follows: Number of units per batch Setup time per batch Inspection time per batch Cat-allac 25 1.50 hours 0.5 hour 1.75 hours 0.7 hour
