Question
Managerial Accounting: Creating Value in a Dynamic Business Environment (11th Edition) Ch. 5 prob 52 parts 1, 2, and 3 I think I understand what
Managerial Accounting: Creating Value in a Dynamic Business Environment (11th Edition)
Ch. 5 prob 52 parts 1, 2, and 3
I think I understand what to do, but I'd like to check my answers to be sure.
My answers are bold.
| 1) | Activity cost pool | Budgeted Overhead Cost | Cost driver | Budgeted Level | Rate | Needed per 1,000 boxes | Activity Cost Pool |
| Machine setups | $ 250,000 | No. of setups | 125 | $ 2,000 | 5 | $ 10,000 | |
| Material handeling | $ 75,000 | Weight of material | 37500 | $ 2 | 10000 | $ 20,000 | |
| Hazardous waste control | $ 25,000 | Weight of haz chem | 5000 | $ 5 | 2000 | $ 10,000 | |
| Quality control | $ 75,000 | No. of inspections | 1000 | $ 75 | 10 | $ 750 | |
| Other | $ 200,000 | Machine hours | 20000 | $ 10 | 500 | $ 5,000 | |
| Total | $ 625,000 | $ 45,750 | |||||
| 2) | Activity Cost pool | $ 45,750 | |||||
| No. of boxes | 1000 | ||||||
| Overhead cost per unit | $ 45.75 | ||||||
| 3) | Budgeted Overhead | $ 625,000 | |||||
| Machine hours | 20000 | ||||||
| Predetermined overhead rate (per hr.) | $ 31.25 | ||||||
| Total overhead for job | $ 45,750 | ||||||
| Machine hours needed for job | 500 | ||||||
| Adjusted predetermined rate (per hr.) | $ 91.50 |
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Construction accounting and financial management
Authors: Steven j. Peterson
2nd Edition
135017114, 978-0135017111
