Question
Stillicum Corporation makes ultra light-weight backpacking tents. Data concerning the companys two product lines appear below: Deluxe Standard Direct materials per unit $ 50.00 $
Stillicum Corporation makes ultra light-weight backpacking tents. Data concerning the companys two product lines appear below:
| Deluxe | Standard | |||||
| Direct materials per unit | $ | 50.00 | $ | 38.00 | ||
| Direct labor per unit | $ | 8.00 | $ | 6.80 | ||
| Direct labor-hours per unit | 0.70 | DLHs | 1.40 | DLHs | ||
| Estimated annual production | 10,000 | units | 50,000 | units | ||
|
| ||||||
The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below:
| Estimated total manufacturing overhead | $ | 514,000 | |
| Estimated total direct labor-hours | 77,000 | DLHs | |
|
| |||
Required:
1. Determine the unit product costs of the Deluxe and Standard products under the companys traditional costing system.
2. The company is considering replacing its traditional costing system with an activity-based absorption costing system that would have the following three activity cost pools:
| Expected Activity | |||||
| Activity Cost Pools and Activity Measures | Estimated Overhead Cost | Deluxe | Standard | Total | |
| Supporting direct labor (direct labor-hours) | $ | 385,000 | 7,000 | 70,000 | 77,000 |
| Batch setups (setups) | 78,000 | 200 | 100 | 300 | |
| Safety testing (tests) | 51,000 | 30 | 70 | 100 | |
| Total manufacturing overhead cost | $ | 514,000 | |||
|
| |||||
Determine the unit product costs of the Deluxe and Standard products under the activity-based absorption costing system.
Stillicum Corporation makes ultra light-weight backpacking tents. Data concerning the companys two product lines appear below:
| Deluxe | Standard | |||||
| Direct materials per unit | $ | 50.00 | $ | 38.00 | ||
| Direct labor per unit | $ | 8.00 | $ | 6.80 | ||
| Direct labor-hours per unit | 0.70 | DLHs | 1.40 | DLHs | ||
| Estimated annual production | 10,000 | units | 50,000 | units | ||
|
| ||||||
The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below:
| Estimated total manufacturing overhead | $ | 514,000 | |
| Estimated total direct labor-hours | 77,000 | DLHs | |
|
| |||
Required:
1. Determine the unit product costs of the Deluxe and Standard products under the companys traditional costing system.
2. The company is considering replacing its traditional costing system with an activity-based absorption costing system that would have the following three activity cost pools:
| Expected Activity | |||||
| Activity Cost Pools and Activity Measures | Estimated Overhead Cost | Deluxe | Standard | Total | |
| Supporting direct labor (direct labor-hours) | $ | 385,000 | 7,000 | 70,000 | 77,000 |
| Batch setups (setups) | 78,000 | 200 | 100 | 300 | |
| Safety testing (tests) | 51,000 | 30 | 70 | 100 | |
| Total manufacturing overhead cost | $ | 514,000 | |||
|
| |||||
Determine the unit product costs of the Deluxe and Standard products under the activity-based absorption costing system. Stillicum Corporation makes ultra light-weight backpacking tents. Data concerning the companys two product lines appear below:
| Deluxe | Standard | |||||
| Direct materials per unit | $ | 50.00 | $ | 38.00 | ||
| Direct labor per unit | $ | 8.00 | $ | 6.80 | ||
| Direct labor-hours per unit | 0.70 | DLHs | 1.40 | DLHs | ||
| Estimated annual production | 10,000 | units | 50,000 | units | ||
|
| ||||||
The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below:
| Estimated total manufacturing overhead | $ | 514,000 | |
| Estimated total direct labor-hours | 77,000 | DLHs | |
|
| |||
Required:
1. Determine the unit product costs of the Deluxe and Standard products under the companys traditional costing system.
2. The company is considering replacing its traditional costing system with an activity-based absorption costing system that would have the following three activity cost pools:
| Expected Activity | |||||
| Activity Cost Pools and Activity Measures | Estimated Overhead Cost | Deluxe | Standard | Total | |
| Supporting direct labor (direct labor-hours) | $ | 385,000 | 7,000 | 70,000 | 77,000 |
| Batch setups (setups) | 78,000 | 200 | 100 | 300 | |
| Safety testing (tests) | 51,000 | 30 | 70 | 100 | |
| Total manufacturing overhead cost | $ | 514,000 | |||
|
| |||||
Determine the unit product costs of the Deluxe and Standard products under the activity-based absorption costing system.
Stillicum Corporation makes ultra light-weight backpacking tents. Data concerning the companys two product lines appear below:
| Deluxe | Standard | |||||
| Direct materials per unit | $ | 50.00 | $ | 38.00 | ||
| Direct labor per unit | $ | 8.00 | $ | 6.80 | ||
| Direct labor-hours per unit | 0.70 | DLHs | 1.40 | DLHs | ||
| Estimated annual production | 10,000 | units | 50,000 | units | ||
|
| ||||||
The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below:
| Estimated total manufacturing overhead | $ | 514,000 | |
| Estimated total direct labor-hours | 77,000 | DLHs | |
|
| |||
Required:
1. Determine the unit product costs of the Deluxe and Standard products under the companys traditional costing system.
2. The company is considering replacing its traditional costing system with an activity-based absorption costing system that would have the following three activity cost pools:
| Expected Activity | |||||
| Activity Cost Pools and Activity Measures | Estimated Overhead Cost | Deluxe | Standard | Total | |
| Supporting direct labor (direct labor-hours) | $ | 385,000 | 7,000 | 70,000 | 77,000 |
| Batch setups (setups) | 78,000 | 200 | 100 | 300 | |
| Safety testing (tests) | 51,000 | 30 | 70 | 100 | |
| Total manufacturing overhead cost | $ | 514,000 | |||
|
| |||||
Determine the unit product costs of the Deluxe and Standard products under the activity-based absorption costing system. Stillicum Corporation makes ultra light-weight backpacking tents. Data concerning the companys two product lines appear below:
| Deluxe | Standard | |||||
| Direct materials per unit | $ | 50.00 | $ | 38.00 | ||
| Direct labor per unit | $ | 8.00 | $ | 6.80 | ||
| Direct labor-hours per unit | 0.70 | DLHs | 1.40 | DLHs | ||
| Estimated annual production | 10,000 | units | 50,000 | units | ||
|
| ||||||
The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below:
| Estimated total manufacturing overhead | $ | 514,000 | |
| Estimated total direct labor-hours | 77,000 | DLHs | |
|
| |||
Required:
1. Determine the unit product costs of the Deluxe and Standard products under the companys traditional costing system.
2. The company is considering replacing its traditional costing system with an activity-based absorption costing system that would have the following three activity cost pools:
| Expected Activity | |||||
| Activity Cost Pools and Activity Measures | Estimated Overhead Cost | Deluxe | Standard | Total | |
| Supporting direct labor (direct labor-hours) | $ | 385,000 | 7,000 | 70,000 | 77,000 |
| Batch setups (setups) | 78,000 | 200 | 100 | 300 | |
| Safety testing (tests) | 51,000 | 30 | 70 | 100 | |
| Total manufacturing overhead cost | $ | 514,000 | |||
|
| |||||
Determine the unit product costs of the Deluxe and Standard products under the activity-based absorption costing system.
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Advanced Management Accounting Pearson New International
Authors: Robert Steven Kaplan, Anthony A. Atkinson
3rd Edition
1292026596, 978-1292026596
