roblem 7A-1 Activity-Based Costing Product Costs for External Reports [LO6) ata concerning Cranur Architects Corporation's two major business lines are given below Commercial Residential $ 5.00 $ 52 $ 3.50 $ 39.00 Direct materials per square metre Direct labour per square metre Direct labour-hours per square metre Estimated annual output 0.2 DLHS 0.15 DLHS 36,000 2 252,000 m2 The company has a traditional costing system in which architecture department overhead is applied to units (square metres of architectural drawings) based on direct labour-hours. Data concerning architecture department overhead and direct labour-hours for the upcoming year appear belo $603,000 Estimated total architecture department overhead Estimated total direct labour-hours 45,000 DLHs Required. 1. Determine the unit costs of the Commercial and Residential products under the company's traditional costing system. (Round your answers to 2 decimal places.) Commercial Residential Unit cost 2. The company is considering replacing its traditional costing system for determining unit product costs for external reports with an ABC system. The ABC system would have the following three activity cost pools: Expected Activity Estimated Overhead Cost $540,000 Activities and Activity Measures Supporting direct labour (direct labour-hours) Drawing software modifications (changes) Quality review and technical checks (tests) Coamercial Residenti 37,800 45 36 7,200 180 144 Total 45,000 225 180 54,000 9,000 Total service department overhead cost $603,000 Determine the unit costs (cost per square metre of architectural drawings) of the Commercial and Residential lines of business under the ABC system. (Round your answers to 2 decimal places.) Commercial Residential Unit cost KPre 3 of 6 Next Exercise 7-9 Computing Activity-Based Costing Product Costs [LO2, LO3 High-Calbre Products Corporation makes two products: titanium rims and posts. Data regarding the two products follow Direct Labour- Hours per Unit 0.60 0.30 Annual Production 22,000 units 90,000 units Rims Posts Additional information about the company follows: a. Rims require $19 in direct materials per unit, and posts require $12. b. The direct labour wage rate is $18 per hour. Rims are more complex to manufacture than posts, and they require special equipment. d. The ABC system has the following activity cost pools: Activity Estimated Overhead Activity Measure Cost Rims s $24,400 Activity Cost Pool Machine setups Special processing General factory Total 200 4,400 Direct labour-hours $562,800 13,200 27,000 40,200 110 $206,800 4,400 90 Number of setups Machine-hours Required 1. Compute the activity rate for each activitv cost pool. Prev 4 of 6 Next> Special processing General factory Machine-hours Direct labour-hours $562, 800 13,200 $206, 800 4,400 0 4,400 Required 1. Compute the activity rate for each activity cost pool. Activity Cost Pool Machine setups Special processing General factory Activity Rate per setup per MH per DLH 2. Determine the unit cost of each product according to the ABC system, including direct materials and direct labour. (Round your intermediate calculations and final answers to 2 decimal places.) Rims Posts Unit cost KPrev 4 of 6 Next> Exercise 7-10 First-Stage Allocations [LO2] The operations vice-president of the Regal Bank of Canada, Kristin Wu, has been interested in investigating the efficiency of the bank's operations. She has been particularly concerned about the costs of handling routine transactions at the bank and would like to compare these costs at the bank's various branches. If the branches with the most efficient operations can be identified, their methods can be studied and then replicated elsewhere. While the bank malntains meticulous records of wages and other costs, there has been no attempt thus far to show how those costs are related to the various services provided by the bank. Wu has asked for your help in conducting an ABC study of bank operations. In particular, she would like to know the cost of opening an account, the cost of processing deposits and withdrawals, and the cost of processing other customer transactions The Windsor branch of the Regal Bank of Canada submitted the following cost data for last year: Teller wages Assintant branch manager salary Branch manager salary $164,000 77,000 5,500 Total 336,500 Virtually all of the other costs of the branch-rent, depreciation, utilities, and so on-are organization-sustaining costs that cannot be meaningfully assigned to individual customer transactions, such as depositing cheques In addition to the cost data above, the employees of the Windsor branch have been interviewed concerning how their time was distributed last year across the activities included in the ABC study. The results of those interviews appear below Distribution of Resource Consumption acroas Activities Processing Processing Deposits and Other CustonerOther Opening Check my work meaningfully assigned to individual customer transactions, such as depositing cheques. In addition to the cost data above, the employees of the Windsor branch have been interviewed concerning how their time was distributed last year across the activities included in the ABC study. The results of those interviews appear below Distribution of Resource Consumption across Activities Processing Processing Opening Deposits and Other Customer Other Accounts Withdravals Transactions Activities Totals 0% 15t 70% Teller wagen Assistant branch manager salary Branch manager salary 201 25% 20 108 408 80 100% 100% 100 20 O% Required Prepare the first-stage allocation for Wu. (Do not leave any empty spaces; input a O wherever it is required.) Opening Processing Deposits Customer Processing Other Other Totals Accounts and Withdrawals Activities Transactions Teller wages Assistant branch manager salary Branch manager salary Total cost Problem 7-22 Activity Rates and Activity-Based Management [L02, LO3] Onassis Catering is a Greek company that provides passenger and crew meals to airlines operating out of two international airports in Athens and Corfu. The operations at the two airports are managed separately, and top management believes that there may be benefits to greater sharing of information between the two operations To better compare the two operations, an ABC system has been designed with the active participation of the managers at both airports. The ABC system is based on the following activity cost pools and activity measures: Activity Cost Poo1 Meal preparation Flight-related activities Customer service Other (conts of idle capacity and Activity Measure Number of meals Number of flights Number of customers organization-sustaining costs) NA The operation at Athens International Airport (AIA) serves 1 million meals annually on 5,000 flights for 10 different airlines. (Each airline is considered one customer) The annual cost of running the AIA airport operation, excluding only the costs of raw materials for meals, totals 3,706,650. Note: The currency in Greece is the euro, denoted by Annual Cost of the AIA Operation Cooks and delivery personnel wages kitchen supplies Chef salaries Equipment depreciation Administrative wages and salaries Building costs 3,020,000 35,150 228,000 77,000 192,500 154,000 Total cost 3,706,650 To help determine the activity rates, employees were interviewed and asked how they divided their time among the four major activities. The results of employee interviews at AIA are displayed below: Distribution of Resource Consumption across Activities at the AIA Operation Meal Flight-Customer Preparation Related Service Other 5t 08 58 Total 100 100 100 100 100 100 75 20% 08 20% 0% 25% 0u 08 ot 40% Cooks and delivery personnel vages Kitchen supplies Chef salaries Equipment depreciation Administrative wages and salaries Building costs 1008 358 65% 0N 0% 35 50% 08 25% 100% Required 1. Perform the first-stage allocation of costs to the activity cost pools. (Do not leave any empty spaces; input a O wherever it is required.) Meal Preparati Customer Other Totals Related Service Cooks and delivery personnel wages Kitchen supplies Chef salaries Administrative wages and salaries Buiding costs Total cost Prey 6 of 6 Next > Check my wo Building costs Total cost 2. Compute the activity rates for the activity cost pools. (Round your activity rates for meal preparation to 4 decimal places and flight-related to 2 decimal places. Do not leave any empty spaces; input a 0 wherever it is required.) Meal Preparation 5,000 nightsairlines Customer Flight-Related Service 10 Activity at AIA Cooks and delivery personnel wages Kitchen supplies Chef salaies Equipment depreciation Administrative wages and salaries Building costs Total cost 3. Not available in Connect.