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Complete the following questions using Microsoft Excel. No other submission format is allowed. Review the grading rubric to confirm you are meeting the assignment requirements.

Complete the following questions using Microsoft Excel. No other submission format is allowed. Review the grading rubric to confirm you are meeting the assignment requirements.

Consider the following information for Hamburg Corporation:

Units

Beginning inventory

80,000

Units started during the year

150,000

Ending inventory

62,000

Inventory is 100% complete as to materials and 60% complete as to conversion.

Materials

Conversion

Beginning costs (SAR)

420,000

687,000

Costs added during the period (SAR)

1,250,000

983,000

Using the WEIGHTED AVERAGE method:

  1. Calculate the number of units completed during the period.
  2. Calculate equivalent units for conversion during the period.
  3. Calculate cost per equivalent units for Materials.

Mannheim Corporation manufactures small camping tents and family camping tents. Estimated direct labor time to produce each type of tent is as follows:

Small

Family

Estimated tents produced

25,000

10,000

Direct labor hours per tent

2

5

Estimated overhead for the period = 1,200,000 SAR.

  1. Compute the overhead cost assigned to each type of tent assuming direct labor hours are used to allocate overhead costs.

The controller is not satisfied with the traditional method of allocating overhead because he believes that most of the overhead costs relate to the family tent product line because of its complexity. He therefore developed the following three activity cost pools and related cost drivers to better understand the costs.

Activity Cost Pools

Expected Use of Cost Drivers

Estimated Overhead Costs (SAR)

Setting up machines

1,000 setups

220,000

Assembling

90,000 labor hours

990,000

Inspection

1,200 inspections

240,000

  1. Calculate the activity-based overhead rates for these three cost pools.
  2. Compute the cost that is assigned to each bicycle product line using activity-based costing system, given the following information.

Expected Use of Cost Drivers per Product

Small

Family

Number of setups

150

850

Direct labor hours

30,000

60,000

Number of inspections

100

1,100

  1. What do you believe the controller should do and why?

You must show your work for credit.

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