Cromatik Kaydet Caner des 2 Chapter 4 Assignment (2- Korumal Grnm Gozden Gegir Gorunum Yardm Dosya Girs Eiche Sayfa Dzeni Formuler Veri Nadamalar J K 1 M N 0 S U V w Picture 8 G A B C E F ( G H I 7 As you learned in the previous chapters. Current Designs has two main product lines- 8 composite kayaks, which are handmade and very labor-intensive, and rotomolded 9 kayaks, which require less labor but employ more expensive equipment Current 10 Designs' controller, Diane Buswell, is now evaluating several different methods of 11 assigning overhead to these products. It is important to ensure that costs are 12 appropriately assigned to the company's products. At the same time, the system that is used must not be so complex that its costs are greater than its benefits. Diane has 13 decided to use the following activities and costs to evaluate the methods of assigning 14 overhead. 15 16 Designing new models $121,100 17 Creating and testing prototypes 152.000 18 Creating molds for kayaks 188,500 19 Operating oven for the rotomolded kayaks 10.000 20 Operating the vacuum line for the composite kayaks 28,000 21 Supervising production employees 180 000 22 Curing time (the time that is needed for the chemical processes to finish 23 before the next step in the production process, many of these costs are 24 related to the space required in the building) 190.400 Total $900.000 1 27 As Diane examines the data, she decides that the cost of operating the oven for the 29 rotomolded kayaks and the cost of operating the vacuum line for the composite kayaks 29 can be directly assigned to each of these product lines and do not need to be allocated with the other costs 30 31 Required 32 Use sheet tab Part 1. 33 For purposes of this analysis assume that Current Designs uses $234 000 in direct labor 34 costs to produce 1,000 composite kayaks and $286,000 in direct labor costs to produce 35 4,000 rotomolded kayaks each year (a) One method of allocating overhoed would allocale the common costs lo cach produd 37 30 Ine by using an alocation basis such as the number of employees in working on each type of kayak or the amount of factory space used for the production of each type of 39 kayak. Diane knows that about 50% of the area of the plant and 50% of the 40 employees work on the composite kayaks, and the remaining space and other 41 employees work on the rotomolded kayaks Using this infomation and remembering that the cost of operating the oven and vacuum line have been directly assigned, 43 delemine the lotal amount to be assigned lo the composile kayak line and the 44 rotomoided kayak line, and the amount to be assigned to each of the units in each 45 line 46 b) Another method of allocating overhead is to use direct labor dollars as an allocation 47 basis. Remembering that the costs of the oven and the vacuum linc have been Problem Statement Part 1 Part 2 110 Aramak iin buraya yazin O Kd 10 TUR 132 2012P1 F Cromatik Kaydet Chapter 4 Assignment (2- Korumal Grnm Candes 2 Dosya Giri Ede Sayfa Dzeni Formule Veri Gozden Ger Gornum Yardm damalar J K 1 M N 0 S U V w X Picture 8 br A B C E F G G H 43 determine the total amount to be assigned to the composite kayak line and the 44 rolomolded kayak line, and the amount to be assigned to each of the units in each 45 Ine 46 b) Another method of allocating overhead is lo use direct labor dollars as an allocalion 47 basis. Remembering that the costs of the oven and the vacuum line have been 48 assigned directly to the product lines, alocate the remaining costs using direct labor 49 dollars as the allocation basis. Then, determine the amount of overhead that should 50 be assigned to each unit of each product line using this method. 51 (c) Aclivily-based costing requires a cusl driver for each cosi pool. Use the following information to assign the costs to the product lines using the activity based costing 53 Driver Amount for 54 Composite Rotomolded Activity Cost Driver Kayaks Kayaks 55 Designing new models Number of models 3 1 Creating and testing prototypes Number of prototypes 2 57 Creating molds for kayaks Number of molds 12 1 58 Supervising production employees Number of employees 12. 12 59 Curing time Number of days of curing time 15,000 2,000 61 What amount of overhead should be assigned to each composite kayak using this method? What amount of overhead should be assigned to each rotomolded kayak using this method? 63 (d) Which of the three methods do you think Current Designs should use? Why? 65 WHAT-IF? 68 2. Perform what-if analysis to answer the following independent questions: 57 a. Suppose the number of prototypes of composite kayaks increases to 45 as a result of 68 additional testing required by the American Boating Council. Create a column sparkline 89 using the overhead costs assigned to each kayak model under activity-based costing with 70 and without this change. Visually identify what effect this will have on the cost of each 71 model of kayak. What occurs to the total costs of employee supervision? T2 b. Suppose instead, that the estimated cost of creating and testing prototypes increased by 73 $100,000. Determine the percentage change in the prototype cost allocations for each 74 kayak model. Explain how the effect of this change in the unit cost of each model of kayak 75 differs from the change in number of prototypes 76 17 78 79 80 81 82 Problem Statement Part 1 Part 2 110 Aramak iin buraya yazn O 10 TUR 1320 2110201 Cromatik Kaydet Chapter 4 Assignment. Korumal Gornam- Candes 2 Dosya Gins Ede Sayfa Dzeni Formuler Veri Gozden Geir Gorrum Yardm Paylasilamalar J22 H 1 L N N o P R S T . B D E F 1 Chapter 4: Part 1 2 3 Data 4 5 Activity Cost 6 Designing new models $ 121.100 7 Creating and testing prototypes 152.000 8 Creating molds for kayaks 188.500 9 Operating oven for the rotomolded kayaks 40.000 10 Operating the vacuum line for the composite kayaks 28.000 11 Supervising production employees 180.000 Curing time (the time that is needed for the chemical processes to finish before the next step in the production process, many of 12 these costs are related to the space required in the bullding) 190.400 13 Total $ 900.000 14 15 Driver Amount for Composite Rotomolded 16 Activity Cost Driver Kayaks Kayaks 17 Designing new models Number of models 3 1 18 Creating and testing prototypes Number of prototypes 6 6 2 19 Creating molds for kayaks Number of molds 12 1 20 Supervising production employees Number of employees 12 12 21 Curing time Number of days of curing time 15.000 2.000 22 23 Direct labor costs for composite kayaks $ 234.000 24 Direct labor costs for rotomolded kayaks $ 286.000 25 Number of composite kayaks 1.000 26 Number of rotomolded kayaks 4.000 27 28 Percentage of employees and percentage of square feet used 29 For composite kayaks 50% 30 For rotomolded kayaks 50% 31 32 33 Required 34 Follow the step-by-step directions to determine the cost allocations for Current Designs. Problem Statement Part 1 Part 2 Aramak iin buraya yazn O E- 10 TUR 13:20 2110201 Onomatik Kaydet Chapter 4 Assignment - Korumal Gornum Candes 2 Dosya Gins Ede Sayfa Duzeni Formuler Veri Gozden Geir Gornum Yardm Pays Mamalar H L M N P R S T Rotomolded J22 G B c D E F G 31 32 33 Required 34 Follow the step-by-step directions to determine the cost allocations for Current Designs. 35 36 37 (a) Composite Rotomolded 38 Directly assigned costs 39 Remaining cost allocation: 40 Remaining costs 41 Cost allocation 42 Total direct and allocated costs 43 Number of kayaks 44 Cost assigned to each kayak 45 46 (b) Composite 47 Directly assigned costs 48 Remaining cost allocation: 49 Remaining costs 50 Overhead rate 51 Cost allocation 52 Total direct and allocated costs 53 Number of kayaks 54 Cost assigned to each kayak 55 56 (c) Estimated Expected Overhead Use of Cost Activity-Based Overhead 57 Activity Cost Pools Cost Drivers Rates 58 Design 59 Prototypes 60 Molds 61 Supervision 52 Curing time 63 64 Composite Rotomolded Expected Expected Use Problem Statement Part 1 Part 2 Aramak iin buraya yazn O Kd 10 TUR 13:27 ALIM21 F Cromatik Kaydet Chapter 4 Assignment. Korumal Gornam- Cangrer 2 Dosya Gins Ede Sayfa Duzeni Formule Veri Guaden Geir Gorunum Yardm Paylaldamalar J24 D E F F H 1 K M N O P R S T U V G Part 2 A B C 1 Chapter 4: 2 3 Data 4 5 Activity 6 Designing now models 7 Creating and testing prototypes B Creating molds for Kavaks 9 Operating oven for the rotomolded kayaks 10 Operating the vacuum line for the composite kayaks 11 Supervising production employees 12 curing time the time that is needed for the chemical processes to 13 Total 14 15 Cost $ 121.100 252 DOO 186 500 40.000 28.000 180.000 190 4IXI S1 000 000 Driver Amount for Composite Rotomolded 16 Activity Cost Driver Kayaks Kayaks 17 Designing new models Number of model 3 1 18 Creating and testing prototypes Number of prototypes 19 Creating molds for kayaks Number of molds 12 1 20 Supervising production employees Number of employees 12 12 21 Curing time Number of days of uning time 15 DOXI 2 DDO 2 22 23 Direct labor costs for composite kayaks $ 234.000 24 Direct labor costs for rotomoked kayaks $ 286 000 25 Number of composite kayaks 1.000 28 Number of rotomolded kayaks 4.000 27 28 Number of employees percentage For composite kayaks 50% Forholdend kayaks 50% 31 32 33 Required 31 Follow the step by step 'what if directions to determine the cost allocations for Current Designs. 35 37 Estimated Expected Overhead Use of Cost Problem Statement Part 1 Part 2 Activity Based Overhead + 110 Aramak iin buraya yazin O E. 10 TUR 13:27 ALIM21 Otomatik Kaydet Chapter 4 Assignment - Korumal Grnm - Cangrer 2 Dosya Gins Ede Sayfa Dzeni Formuler Veri Gozden Geir Gornum Yardm Payla Aldamalar J24 6 H 1 K L M N O P R S T U V A C D E F G G 31 32 33 Required 34 Follow the step-by-step 'whal-if directions to delermine the cost allocalions for Current Designs 35 Drivers Activity-Based Overhead Rates Rotomolded 37 Estimated Expected Overhead Use of Cost 38 Activity Cost Pools Cost 39 Design 40 Prototypes 41 Mods 42 Supervision 43 Curing time 44 45 Composite Expected Use of Cosi Overhoud 46 Activity Cost Pools Drivers Rates 17 Design 48 Prototypes 49 Mods 50 Supervision 51 Curing time 52 Total amount allocated 53 Cost directly assigned 54 Total cost 55 Number of kayaks 56 Cast assigned to each kayak Cost Assigned Fxpected Use of Cost Drivers Overhead Rates Cost Assigned 58 What-if? 59 Part 2a Composite Rotomokled Increase in prototypes for composite kayaks 80 61 No change in number of prototypes Problem Statement Part 1 Part 2 + 110 Aramak iin buraya yazn O E. Kd 10 TUR 13:28 2110201 Cromatik Kaydet Chapter 4 Assignment (2- Korumal Grnm Cangi Dosya Gins Ede Sayfa Dzeni Formuler Veri Guaden Geir Gornum Yardm Paylaldamalar J24 G C D G H K M N O P R S T u V Overhead Rates Cost Assigned F Expected Use of Cost Drivers Overhead Rates Cost Assigned A B Expected Use of Cost 46 Activity Cost Pools Drivers 47 Design 48 Prototypes 49 Molds 50 Supervision 51 Curing time 52 Total amount allocated 53 Cost directly assigned 54 Total cost 55 Number of kayaks 56 Cost assigned to each Kayak 57 58 What-it? 59 Part 2a Composite Ratamokled Increase in prototypes for composite kayaks No change in number of prototypes 63 84 55 Part 2 56 Cost all cation 67 Original cost allocation for prololypes Composite Rotomolded 114.000 38.000 89 Percentage change 71 72 73 71 75 76 77 79 Problem Statement Part 1 Part 2 110 Aramak iin buraya yazn O E 10 TUR 13:28 2110201 Cromatik Kaydet Caner des 2 Chapter 4 Assignment (2- Korumal Grnm Gozden Gegir Gorunum Yardm Dosya Girs Eiche Sayfa Dzeni Formuler Veri Nadamalar J K 1 M N 0 S U V w Picture 8 G A B C E F ( G H I 7 As you learned in the previous chapters. Current Designs has two main product lines- 8 composite kayaks, which are handmade and very labor-intensive, and rotomolded 9 kayaks, which require less labor but employ more expensive equipment Current 10 Designs' controller, Diane Buswell, is now evaluating several different methods of 11 assigning overhead to these products. It is important to ensure that costs are 12 appropriately assigned to the company's products. At the same time, the system that is used must not be so complex that its costs are greater than its benefits. Diane has 13 decided to use the following activities and costs to evaluate the methods of assigning 14 overhead. 15 16 Designing new models $121,100 17 Creating and testing prototypes 152.000 18 Creating molds for kayaks 188,500 19 Operating oven for the rotomolded kayaks 10.000 20 Operating the vacuum line for the composite kayaks 28,000 21 Supervising production employees 180 000 22 Curing time (the time that is needed for the chemical processes to finish 23 before the next step in the production process, many of these costs are 24 related to the space required in the building) 190.400 Total $900.000 1 27 As Diane examines the data, she decides that the cost of operating the oven for the 29 rotomolded kayaks and the cost of operating the vacuum line for the composite kayaks 29 can be directly assigned to each of these product lines and do not need to be allocated with the other costs 30 31 Required 32 Use sheet tab Part 1. 33 For purposes of this analysis assume that Current Designs uses $234 000 in direct labor 34 costs to produce 1,000 composite kayaks and $286,000 in direct labor costs to produce 35 4,000 rotomolded kayaks each year (a) One method of allocating overhoed would allocale the common costs lo cach produd 37 30 Ine by using an alocation basis such as the number of employees in working on each type of kayak or the amount of factory space used for the production of each type of 39 kayak. Diane knows that about 50% of the area of the plant and 50% of the 40 employees work on the composite kayaks, and the remaining space and other 41 employees work on the rotomolded kayaks Using this infomation and remembering that the cost of operating the oven and vacuum line have been directly assigned, 43 delemine the lotal amount to be assigned lo the composile kayak line and the 44 rotomoided kayak line, and the amount to be assigned to each of the units in each 45 line 46 b) Another method of allocating overhead is to use direct labor dollars as an allocation 47 basis. Remembering that the costs of the oven and the vacuum linc have been Problem Statement Part 1 Part 2 110 Aramak iin buraya yazin O Kd 10 TUR 132 2012P1 F Cromatik Kaydet Chapter 4 Assignment (2- Korumal Grnm Candes 2 Dosya Giri Ede Sayfa Dzeni Formule Veri Gozden Ger Gornum Yardm damalar J K 1 M N 0 S U V w X Picture 8 br A B C E F G G H 43 determine the total amount to be assigned to the composite kayak line and the 44 rolomolded kayak line, and the amount to be assigned to each of the units in each 45 Ine 46 b) Another method of allocating overhead is lo use direct labor dollars as an allocalion 47 basis. Remembering that the costs of the oven and the vacuum line have been 48 assigned directly to the product lines, alocate the remaining costs using direct labor 49 dollars as the allocation basis. Then, determine the amount of overhead that should 50 be assigned to each unit of each product line using this method. 51 (c) Aclivily-based costing requires a cusl driver for each cosi pool. Use the following information to assign the costs to the product lines using the activity based costing 53 Driver Amount for 54 Composite Rotomolded Activity Cost Driver Kayaks Kayaks 55 Designing new models Number of models 3 1 Creating and testing prototypes Number of prototypes 2 57 Creating molds for kayaks Number of molds 12 1 58 Supervising production employees Number of employees 12. 12 59 Curing time Number of days of curing time 15,000 2,000 61 What amount of overhead should be assigned to each composite kayak using this method? What amount of overhead should be assigned to each rotomolded kayak using this method? 63 (d) Which of the three methods do you think Current Designs should use? Why? 65 WHAT-IF? 68 2. Perform what-if analysis to answer the following independent questions: 57 a. Suppose the number of prototypes of composite kayaks increases to 45 as a result of 68 additional testing required by the American Boating Council. Create a column sparkline 89 using the overhead costs assigned to each kayak model under activity-based costing with 70 and without this change. Visually identify what effect this will have on the cost of each 71 model of kayak. What occurs to the total costs of employee supervision? T2 b. Suppose instead, that the estimated cost of creating and testing prototypes increased by 73 $100,000. Determine the percentage change in the prototype cost allocations for each 74 kayak model. Explain how the effect of this change in the unit cost of each model of kayak 75 differs from the change in number of prototypes 76 17 78 79 80 81 82 Problem Statement Part 1 Part 2 110 Aramak iin buraya yazn O 10 TUR 1320 2110201 Cromatik Kaydet Chapter 4 Assignment. Korumal Gornam- Candes 2 Dosya Gins Ede Sayfa Dzeni Formuler Veri Gozden Geir Gorrum Yardm Paylasilamalar J22 H 1 L N N o P R S T . B D E F 1 Chapter 4: Part 1 2 3 Data 4 5 Activity Cost 6 Designing new models $ 121.100 7 Creating and testing prototypes 152.000 8 Creating molds for kayaks 188.500 9 Operating oven for the rotomolded kayaks 40.000 10 Operating the vacuum line for the composite kayaks 28.000 11 Supervising production employees 180.000 Curing time (the time that is needed for the chemical processes to finish before the next step in the production process, many of 12 these costs are related to the space required in the bullding) 190.400 13 Total $ 900.000 14 15 Driver Amount for Composite Rotomolded 16 Activity Cost Driver Kayaks Kayaks 17 Designing new models Number of models 3 1 18 Creating and testing prototypes Number of prototypes 6 6 2 19 Creating molds for kayaks Number of molds 12 1 20 Supervising production employees Number of employees 12 12 21 Curing time Number of days of curing time 15.000 2.000 22 23 Direct labor costs for composite kayaks $ 234.000 24 Direct labor costs for rotomolded kayaks $ 286.000 25 Number of composite kayaks 1.000 26 Number of rotomolded kayaks 4.000 27 28 Percentage of employees and percentage of square feet used 29 For composite kayaks 50% 30 For rotomolded kayaks 50% 31 32 33 Required 34 Follow the step-by-step directions to determine the cost allocations for Current Designs. Problem Statement Part 1 Part 2 Aramak iin buraya yazn O E- 10 TUR 13:20 2110201 Onomatik Kaydet Chapter 4 Assignment - Korumal Gornum Candes 2 Dosya Gins Ede Sayfa Duzeni Formuler Veri Gozden Geir Gornum Yardm Pays Mamalar H L M N P R S T Rotomolded J22 G B c D E F G 31 32 33 Required 34 Follow the step-by-step directions to determine the cost allocations for Current Designs. 35 36 37 (a) Composite Rotomolded 38 Directly assigned costs 39 Remaining cost allocation: 40 Remaining costs 41 Cost allocation 42 Total direct and allocated costs 43 Number of kayaks 44 Cost assigned to each kayak 45 46 (b) Composite 47 Directly assigned costs 48 Remaining cost allocation: 49 Remaining costs 50 Overhead rate 51 Cost allocation 52 Total direct and allocated costs 53 Number of kayaks 54 Cost assigned to each kayak 55 56 (c) Estimated Expected Overhead Use of Cost Activity-Based Overhead 57 Activity Cost Pools Cost Drivers Rates 58 Design 59 Prototypes 60 Molds 61 Supervision 52 Curing time 63 64 Composite Rotomolded Expected Expected Use Problem Statement Part 1 Part 2 Aramak iin buraya yazn O Kd 10 TUR 13:27 ALIM21 F Cromatik Kaydet Chapter 4 Assignment. Korumal Gornam- Cangrer 2 Dosya Gins Ede Sayfa Duzeni Formule Veri Guaden Geir Gorunum Yardm Paylaldamalar J24 D E F F H 1 K M N O P R S T U V G Part 2 A B C 1 Chapter 4: 2 3 Data 4 5 Activity 6 Designing now models 7 Creating and testing prototypes B Creating molds for Kavaks 9 Operating oven for the rotomolded kayaks 10 Operating the vacuum line for the composite kayaks 11 Supervising production employees 12 curing time the time that is needed for the chemical processes to 13 Total 14 15 Cost $ 121.100 252 DOO 186 500 40.000 28.000 180.000 190 4IXI S1 000 000 Driver Amount for Composite Rotomolded 16 Activity Cost Driver Kayaks Kayaks 17 Designing new models Number of model 3 1 18 Creating and testing prototypes Number of prototypes 19 Creating molds for kayaks Number of molds 12 1 20 Supervising production employees Number of employees 12 12 21 Curing time Number of days of uning time 15 DOXI 2 DDO 2 22 23 Direct labor costs for composite kayaks $ 234.000 24 Direct labor costs for rotomoked kayaks $ 286 000 25 Number of composite kayaks 1.000 28 Number of rotomolded kayaks 4.000 27 28 Number of employees percentage For composite kayaks 50% Forholdend kayaks 50% 31 32 33 Required 31 Follow the step by step 'what if directions to determine the cost allocations for Current Designs. 35 37 Estimated Expected Overhead Use of Cost Problem Statement Part 1 Part 2 Activity Based Overhead + 110 Aramak iin buraya yazin O E. 10 TUR 13:27 ALIM21 Otomatik Kaydet Chapter 4 Assignment - Korumal Grnm - Cangrer 2 Dosya Gins Ede Sayfa Dzeni Formuler Veri Gozden Geir Gornum Yardm Payla Aldamalar J24 6 H 1 K L M N O P R S T U V A C D E F G G 31 32 33 Required 34 Follow the step-by-step 'whal-if directions to delermine the cost allocalions for Current Designs 35 Drivers Activity-Based Overhead Rates Rotomolded 37 Estimated Expected Overhead Use of Cost 38 Activity Cost Pools Cost 39 Design 40 Prototypes 41 Mods 42 Supervision 43 Curing time 44 45 Composite Expected Use of Cosi Overhoud 46 Activity Cost Pools Drivers Rates 17 Design 48 Prototypes 49 Mods 50 Supervision 51 Curing time 52 Total amount allocated 53 Cost directly assigned 54 Total cost 55 Number of kayaks 56 Cast assigned to each kayak Cost Assigned Fxpected Use of Cost Drivers Overhead Rates Cost Assigned 58 What-if? 59 Part 2a Composite Rotomokled Increase in prototypes for composite kayaks 80 61 No change in number of prototypes Problem Statement Part 1 Part 2 + 110 Aramak iin buraya yazn O E. Kd 10 TUR 13:28 2110201 Cromatik Kaydet Chapter 4 Assignment (2- Korumal Grnm Cangi Dosya Gins Ede Sayfa Dzeni Formuler Veri Guaden Geir Gornum Yardm Paylaldamalar J24 G C D G H K M N O P R S T u V Overhead Rates Cost Assigned F Expected Use of Cost Drivers Overhead Rates Cost Assigned A B Expected Use of Cost 46 Activity Cost Pools Drivers 47 Design 48 Prototypes 49 Molds 50 Supervision 51 Curing time 52 Total amount allocated 53 Cost directly assigned 54 Total cost 55 Number of kayaks 56 Cost assigned to each Kayak 57 58 What-it? 59 Part 2a Composite Ratamokled Increase in prototypes for composite kayaks No change in number of prototypes 63 84 55 Part 2 56 Cost all cation 67 Original cost allocation for prololypes Composite Rotomolded 114.000 38.000 89 Percentage change 71 72 73 71 75 76 77 79 Problem Statement Part 1 Part 2 110 Aramak iin buraya yazn O E 10 TUR 13:28 2110201