Answer all questions - Question 1 thru 6

Question 1

Required information [The following information applies to the questions displayed below.] Rusties Company recently implemented an activity-based costing system. At the beginning of the year, management made the following estimates of cost and activity in the company's five activity cost pools: Expected Overhead Expected Activity Cost Pool Activity Measure Cost Activity Labor-related Direct labor-hours $ 36, 380 2, 140 DLHS Purchase orders Number of orders $ 1, 440 480 orders Product testing Number of tests $ 6, 210 345 tests Template etching Number of templates $ 1, 450 50 templates General factory Machine-hours $ 42, 600 7, 100 MHS Required: 1. Compute the activity rate for each of the activity cost pools. Activity Cost Pool Activity Rate Labor-related per DLH Purchase orders per order Product testing per test Template etching per template General factory per MHRequired information Expected Overhead Activity Cost Pool Activity Measure Cost Laborrelated Direct laborhours $36,388 Purchase orders Number of orders $ 1,446 Product testing Number of tests $ 6,218 Template etching Number of templates $ 1,458 General 'Factor'y Machine-hours $42,568 (The following information applies to the questions displayed beiowj Rusties Company recently implemented an activitybased costing system. At the beginning of the yea r, management made the following estimates of cost and activity in the company's five activity cost pools: Expected Activity 2J 14B DLHS 438 orders 345 tests 56 templates 'i, we MHs 2. The expected activity for the year was distributed among the company's four products as follows: Expected Activitx Activity Cost Pool Product A Product B Product C Product D Laborrelated (DLHs) 61'5 65 7'96 1'60 Purchase orders (orders) 60 15B 136 1?0 Product testing (tests) 223 56 8 '5 Template etching {templates} 6 3-3 18 2 General factory (MI-ls] 2,563 1,766 1,296 1,?60 Using the ABC data, determine the total amount of overhead cost assigned to each product. Precision Manufacturing Inc. [PMI] makes two types of industrial component partsthe EXBOO and the TXEOO. |t annually produces 59,000 units of EXBOO and 12,400 units of TXBOO. The company's conventional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labor dollars as the allocation base. Additional information relating to the company's two product lines is shown below: EXSM TXSBB' Total Direct materials $365,325 $161,553 $525,3?5 Direct labor $119,099 5 42, 333 $151, 383 ' The company is considering implementing an activitybased costing system that distributes a\" of its manufacturing overhead to four activities as shown below: Activity Activity cost Pool Manufacturing (and Activity Measure] Overhead E1388 \"583 Total Machining [machinehours) $283,353 89,883 62,808 151,883 Setups (setup hours) 148,483 Ir'3 298 363 Product-level (number of products) 95,893 1 1 2 General factory (direct labor dollars) 5?,963 $119,883 $42,308 $151,883 Total manufacturing overhead cost $4991193 Required: ia. Compute the plantwide overhead rate that would be used in the company's conventional cost system. 1b. Using the plantwide rate, compute the unit product cost for each product. 2-a. Compute the activity rate for each activity cost pool. 2-b. Using the activity rates, compute the unit product cost for each product. Req u ired informatio n [The foiiowing information applies to the questions dispiayed below} For many years, Thomson Company manufactured a single product called LEC 40. Then three years ago, the company automated a portion of its plant and at the same time introduced a second product called LEC 90 that has become increasingly popular. The LEC 90 is a more complex product, requiring 0.80 hours of direct labor time per unit to manufacture and extensive machining in the automated portion ofthe plant. The LEC 40 requires only 0.40 hours of direct labor time per unit and only a small amount of machining. Manufacturing overhead costs are currently assigned to products on the basis of direct laborhours. Despite the growing popularity of the company's new LEC 90, prots have been declining steadily. Management is beginning to believe that there may be a problem with the company's costing system. Direct material and direct labor costs per unit are as follows: L Direct materials $2 . Direct labor (-8.40 hours and 0.86 hours @ $10.06 per hour) 35 ' Management estimates that the company will incur $?28,000 in manufacturing overhead costs during the current year and 60,000 units of the LEC 40 and 20,000 units of the LE: 90 will be produced and sold. Required: 1-a. Compute the predetermined overhead rate assuming that the company continues to apply manufacturing overhead cost on the basis of direct labor-hours. 1-b. Using this rate and other data from the problem, determine the unit product cost of each product. Required information [The following information applies to the questions displayed below.] For many years, Thomson Company manufactured a single product called LEC 40. Then three years ago, the company automated a portion of its plant and at the same time introduced a second product called LEC 90 that has become increasingly popular. The LEC 90 is a more complex product, requiring 0.80 hours of direct labor time per unit to manufacture and extensive machining in the automated portion of the plant. The LEC 40 requires only 0.40 hours of direct labor time per unit and only a small amount of machining. Manufacturing overhead costs are currently assigned to products on the basis of direct labor-hours. Despite the growing popularity of the company's new LEC 90, profits have been declining steadily. Management is beginning to believe that there may be a problem with the company's costing system. Direct material and direct labor costs per unit are as follows: LEC 40 LEC 90 Direct materials $ 20.00 $ 40.00 Direct labor (0.40 hours and 0.80 hours @ $10.00 per hour) $ 4.00 $ 8.00 Management estimates that the company will incur $728,000 in manufacturing overhead costs during the current year and 60,000 units of the LEC 40 and 20,000 units of the LEC 90 will be produced and sold. 3. Using the activity rates you computed in part (2), do the following: a. Determine the per unit amount of manufacturing overhead cost that would be assigned to each product using the activity-based costing system. b. Compute the unit product cost of each product.Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 2B Compute the plantwide overhead rate that would be used in the company's conventional cost system. (Round your answer to 2 decimal places.) Predetermined overhead rate per DL$ Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 2B Using the plantwide rate, compute the unit product cost for each product. (Round your intermediate calculations and final answers to 2 decimal places.) EX300 TX500 Unit product cost Complete lis quaon byenterilg your answers in line labs below. Compute the activity rate for each activity oust pool. {Round your Machining and General factory activity rates to 2 decimal places.) m General factory _ per DL$ Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 2B Using the activity rates, compute the unit product cost for each product. (Round your intermediate calculations and final answers to 2 decimal places. ) EX300 TX500 Unit product costRequired: ia. Compute the predetermined overhead rate assuming that the company continues. to apply manufacturing overhead cost on the basis of direct labor-hours. 1b. Using this rate and other data from the problem, determine the unit product cost of each product. Complete this question by entering your answers in the tabs below. Req 1A Req 13 Compute the predetermined overhead late assuming that the company oontinues to apply manufacturing overhead oost on the basis of direct laborhours. (Round your answer to 2 decimal places.) per D LH Required: 1-a. Compute the predetermined overhead rate assuming that the company continues to apply manufacturing overhead cost on the basis of direct laborhours. 1-b. Using this rate and other data from the problem, determine the unit product cost of each product. Complete this question by entering your answers in the labs below. Using this rate and other data from the problem, determine the unit product cost of each product. (Do not round intermediate calculations. Round your nal answers to 2 decimal places.) 0 Required information [The foiiowing information applies to the questions dispiayed .beioiwr'.,ir For many years, Thomson Company manufactured a single product called LEC 40. Then three years ago, the company automated a portion of its plant and at the same time introduced a second product called LEC 90 that has become increasingly popular. The LEC 90 is a more complex product, requiring 0.80 hours of direct labor time per unit to manufacture and extensive machining in the automated portion of the plant The LEC 40 requires only 0.40 hours of direct labor time per unit and only a small amount of machining. Manufacturing overhead costs are currently assigned to products on the basis of direct laborhours. Despite the growing popularity of the company's new LEC 90, prots have been declining steadily. Management is beginning to believe that there may be a problem with the company's costing system. Direct material and direct labor costs per unit are as follows: LEC 43 LEC 90 Direct materials $28.66 $48.66 Direct labor (8.48 hours and 8.36 hours 9 $18.68 per hour) 1. 4.68 $ 3.66 Management estimates that the company will incur $728,000 in manufacturing overhead costs during the current year and 60,000 units of the LEC 40 and 20,000 units of the LEC 90 will be _and sold. 2. Management is considering using activitybased costing to assign manufacturing overhead cost to products. The activitybased costing system would have the following four activity cost pools: Estimated Activity Cost Pool Activity Measure Overhead Cost Maintaining parts inventory Number of part types $ 148,866 Processing purchase orders Number of purchase orders 88,866 Quality control Number of tests run 28,866 Machinerelated Machinehours 483,866 5 728,666 [ EEEected Activity Activity Pleasure LEC 4-8 LEC 98 Total Number of part types 488 1,688 1,466 Number of purchase orders 1,288 8.88 2,866 Number of tests run 588 1,588 2,866 Machine-hours 3,888 5,668 3,866 Determine the activity rate for each of the four activityr cost pools. {Round your answers to 2 decimal places.) Maintaining inventory - per part type Processing purchase orders - Guam mm - 3. Using the activity rates you computed in parti2], do the following: a. Determine the per unit amount of manufacturing overhead cost that would be assigned to each product using the activity-based costing system. b. Compute the unit product cost of each product. Complete this question by entering your answers in the tabs below. RBI] 3!! RBI] BB Using the activity:r rates you computed in part {2), determine the per unit amount of manufacturing overhead cost that would be assigned to each product using the activitybased costing system. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Manufacturing overhead per unit of LEC 40 Manufacturing overhead per unit of LEC 9|] Complete this question by entering your answers in the tabs below. Req 3A Req 3B Using the activity rates you computed in part (2), compute the unit product cost of each product. (Do not round intermediate calculations. Round your final answers to 2 decimal places) Unit product cost for LEC 40 Unit product cost for LEC 90