Triathlon Cycles specializes in producing touring bicycles but has recently ventured into producing mountain bicycles too. The company provides the following cost information. Activity Cost pool Direct materials per unit Total direct labor cost Total manufacturing overhead Number of units Mountain Bicycle $ 1,000 S 300 $ 75,000 200 units Touring Bicycle $ 2,200 S 700 $ 180,000 400 units Knowledge Check 01 What is the manufacturing overhead allocated to each mountain bicycle? $450 $900 $375 O $187.50 Knowledge Check 02 What is the total manufacturing costs of one touring bicycle? $1,675 $3,800 O $3,088 O $3,350 Match each term on the left with the best definition on the right. Note: Not all definitions will be used. a. A detailed record of costs incurred to complete a specific job. b. A source document that shows how a worker spent time each week. c. An accounting system used by companies to make standardized or homogeneous products or services. d. An accounting system used by companies that offer customized or unique products or services. e. Major inputs that can be directly and easily traced to a product, job or service. f. Hands-on work that goes into producing a product, job or service. g. Costs not easily traceable to producing a product, job or service. h. The amount of actual overhead is greater than the applied overhead. i. A form that lists the quantity of direct materials to be used in a job. j. Indirect costs that are allocated to each job. k. Estimated manufacturing overhead divided by estimated cost driver. 1. A measure that causes or influences the incurrence of a cost. m. Total cost divided by units produced. n. The amount of actual overhead is less than the applied overhead. o. Actual direct materials plus actual direct labor plus applied manufacturing overhead. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Allocation Base Direct Labor Time Ticket Indirect Costs Job Cost Sheet Job Order Costing Materials Requisition Form Overapplied Overhead Underapplied Overhead Predetermined Overhead Rate Process Costing Match each term on the left with the best definition on the right. Note: Not all definitions will be used. a. Materials that cannot be directly or conveniently traced to a specific unit or job. b. Total production cost assigned to goods that were produced during the period. c. Cost of materials purchased from suppliers that have not yet been used in production. d. Actual amount of indirect manufacturing costs incurred during the period. e. Materials that can be directly and conveniently traced to a specific unit or job. f. Indirect manufacturing costs that have been assigned to a specific unit or job using a predetermined overhead rate. g. Cost of units or jobs that are incomplete at any given point in time. h. Total manufacturing cost of jobs or units sold during the period. i. Costs of all units completed and ready for sale at any given point in time. 1. 2. 3. 4. 6. 5. 6. 7. Actual Manufacturing Overhead Applied Manufacturing Overhead Cost of Goods Manufactured Cost of Goods Sold Direct Materials Finished Goods Indirect Materials Raw Materials Inventory Work in Process Inventory 8 9. Bluebean Inc. produces two lines of coffee cups: espresso coffee cups and travel coffee mugs. The unit cost information is shown here. The company uses a traditional volume-based costing system and believes that the number of labor hours is the appropriate cost driver. Activity Cost Pool Selling price Direct materials Direct labor 6) 0) Espresso Coffee Cups 20 6 2 NOO Travel Coffee Mugs S 25 S 8 S 5 00 S Units produced Direct labor hours 10,000 units 10,000 hours 4,000 units 6,000 hours Estimated total overhead costs $ 80,000 Espresso Coffee Cups Travel Coffee Mugs Item #1 Predetermined overhead rate Item #2 - Total manufacturing overhead allocated Item #3 - Manufacturing cost per unit Item #4 - Gross profit per unit $20 per direct labor hour $5 per direct labor hour $8 per direct labor hour Bluebean Inc. produces two lines of coffee cups: espresso coffee cups and travel coffee mugs. The unit cost information is shown here. The company uses a traditional volume-based costing system and believes that the number of labor hours is the appropriate cost driver. Activity Cost Pool Selling price Direct materials Direct labor Espresso Coffee Cups 20 $ 6 S 2 (6) () ) ) Travel Coffee Mugs S 25 8 S 5 Units produced Direct labor hours 10,000 units 10,000 hours 4,000 units 6,000 hours Estimated total overhead costs $80,000 Espresso Coffee Cups Travel Coffee Mugs Item #1 - Predetermined overhead rate Item #2 - Total manufacturing overhead allocated Item #3 - Manufacturing cost per unit Item #4 - Gross profit per unit $5 per direct labor hour $13 per direct labor hour $25 per direct labor hour