Question
Requirement 1. Compute the cost allocation rate for each activity. First identify the formula, then compute the rate for each activity. Activity cost / =
Requirement 1. Compute the cost allocation rate for each activity. First identify the formula, then compute the rate for each activity.
|
|
|
|
|
| Activity cost |
|
|
|
| / |
| = | allocation rate | |
| Mat. handling |
| / |
| = |
| per part |
| Mach setup |
| / |
| = |
| per setup |
| Insertion |
| / |
| = |
| per part |
| Finishing |
| / |
| = |
| per hour |
Requirement 2. Compute the manufacturing overhead cost that should be assigned to Job 420.
| Activity | MOH Cost |
|
| Materials handling |
| |
| Machine setup |
| |
| Insertion of parts |
| |
| Finishing |
| |
| Total |
|
|
Requirement 3. Compute the manufacturing overhead cost that should be assigned to Job 510.
| Activity | MOH Cost |
|
| Materials handling |
| |
| Machine setup |
| |
| Insertion of parts |
| |
| Finishing |
| |
| Total |
|
|
Requirement 1. Compute the cost allocation rate for each activity. First identify the formula, then compute the rate for each activity.
|
|
|
|
|
| Activity cost |
|
|
|
| / |
| = | allocation rate | |
| Mat. handling |
| / |
| = |
| per part |
| Mach setup |
| / |
| = |
| per setup |
| Insertion |
| / |
| = |
| per part |
| Finishing |
| / |
| = |
| per hour |
Requirement 2. Compute the manufacturing overhead cost that should be assigned to Job 420.
| Activity | MOH Cost |
|
| Materials handling |
| |
| Machine setup |
| |
| Insertion of parts |
| |
| Finishing |
| |
| Total |
|
|
Requirement 3. Compute the manufacturing overhead cost that should be assigned to Job 510.
| Activity | MOH Cost |
|
| Materials handling |
| |
| Machine setup |
| |
| Insertion of parts |
| |
| Finishing |
| |
| Total |
|
|
northstar
uses ABC to account for its chrome wheel manufacturing process. Company managers have identified four manufacturing activities that incur manufacturing overhead costs: materials handling, machine setup, insertion of parts, and finishing. The budgeted activity costs for the upcoming year and their allocation bases are as follows:
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NorthstarNorthstar
expects to produce
1 comma 0001,000
chrome wheels during the year. The wheels are expected to use
3 comma 0003,000
parts, require
2020
setups, and consume
2 comma 0002,000
hours of finishing time.
Job 420 used
100100
parts, required
44
setups, and consumed
150150
finishing hours.
Job 510 used
500500
parts, required
66
setups, and consumed
330330
finishing hours.
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.
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Principles Of Financial Accounting Ch 1 17
Authors: Robert Libby, Patricia Libby, Fred Phillips, Stacey Whitecotton
1st Edition
0077370457, 9780077370459
