Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Help! Using activity based costing (check the attachment), what would you suggest to management about the viability of each of its current products assuming that

Help!

Using activity based costing (check the attachment), what would you suggest to management about the viability of each of its current products assuming that the company is a price taker and has no market power over its pricing?

image text in transcribed

image text in transcribed

Question Sheetv11 - Microsoft Excel Cla Home Insert Page Layout Formulas Data Review View Developer QuickBooks (?) X 2 F54 fx =F46-SUM(F48:F52) B D Note 1: Overhead allocation sheet E F G H J K L M N 0 P 56 57 T500 Activity Machining Setup Product Sustaining Total Cost Driver 204,000 46 2 Total OH Cost 469,200 28,750 187,000 B300 OH Cost assigned=Activity Rate Driver incurred 303,600 OH Rate= Total OH/Total cost driver 2.30 625.00 93500.00 Driver Incurred 132,000 22 1 Driver Incurred 72,000 24 OH Cost assigned=Activity Rate Driver incurred 165,600 15,000 93,500 13,750 93,500 1 58 59 60 61 62 63 64 65 3) 66 67 68 Total 684,950 410,850 274,100 Quantitative Comparison of the traditional and activity based assignment. Traditional costing system B300 T500 %age=B300 Amount/Total Amount 55.8% 64.7% 64.7% Amount 330,000 2,904,000 579,732 Direct material Direct labor manufacturing overhead %age=T500 Amount/Total Amount 44.2% 35.3% 35.3% Amount 261,600 1,584,000 316,218 Total Amount 591,600 4,488,000 895,950 2.161,818 Total cost assigned to product 3.813,732 Selling and administrative Expense Total Cost 5,975,550 1,382,000 7,357,550 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 ABC costing system B300 T500 %age=B30 0 Amount/ %age=T500 otal Amount/To Total Amount Amount Amount tal Amount amount Direct cost: Direct material 330,000 55.8% 261,600 44.2% 591,600 Direct labor 2,904,000 64.7% 1,584,000 35.3% 4,488,000 Selling and Admin Exp 306,000 38.2% 496,000 61.8% 802,000 Indirect Cost: : Machining 303,600 64.7% 165,600 35.3% 469,200 Setup 13,750 47.8% 15,000 52.2% 28,750 Product Sustaining 93,500 50.0% 93,500 50.0% 187,000 Total cost assigned to produc 3,950,850 2,615,700 6,566,550 Cost Not assigned to product Selling and Admin Exp 580,000 (1382000-802000) Other 211,000 Total Cost 7,357,550 Activate Windows Go to PC settings to activate Windows Sheet2031 Sheet2032 Sheet2033 Sheet2034 Shi 80% - + Sheet2023 Sheet2024 Sheet2025 Sheet2026 Sheet2027 Sheet2028 Sheet2029 Sheet2030 Ready X na I 12:14 AM 03/04/21

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Horngrens Financial And Managerial Accounting The Managerial Chapters And The Financial Chapters Plus Pearson Mylab Accounting With Pearson Global Edition

Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura

6th Global Edition

1292270756, 978-1292270753

More Books

Students also viewed these Accounting questions