![]() ![]() Selected transactions recorded by the company during the year are given below:Ī. Īt the beginning of the year, the company had inventory balances as follows: Raw materials. The company has four activity cost pools, which are listed below. Larker Corporation implemented activity-based costing several years ago and uses it for its external financial Determine the amount of underapplied or overapplied overhead cost for the year. ĭetermine the amount of manufacturing overhead cost applied to production for the year.Ĥ. During the year, actual activity was recorded as follows: Activity Cost Pool General factory Activity Measure Direct labor-hours Number of orders Number of part types Number of boards Machine-hours Estimated Overhead Cost $280, 000 $90, 000 $120, 000 $360, 000 $400, 000 Expected Activity 40,000 DLHs 1, 500 orders 400 part types 2, 000 boards 80, 000 MHs Ĭompute the activity rate (i.e., predetermined overhead rate) for each of the activity cost pools.ģ. Activities during the year were distributed acrossĪctivity Cost Pool Actual Activity Product A Product B Product C Product D Labor related (DLHs) . Refer to the data in Exercise 3–6 for Sylvan Company. Determine the unit product cost of each product according to the ABC system.Compute the activity rate (i.e., predetermined overhead rate) for each activity cost pool.The ABC system has the following activity cost pools: Hubs are more complex to manufacture than Sprockets and they require special equipment.ĭ. The direct labor wage rate is $ 15 \$15 $15 per hour.Ĭ. Hubs require $ 32 \$32 $32 in direct materials per unit, and Sprockets require $ 18 \$18 $18.ī. Īdditional information about the company follows:Ī. Explain why the product costs differ between the two systems.įogerty Company makes two products, titanium Hubs and Sprockets.This time is expected to be distributed as follows during the upcoming year:Ĭompute the unit product costs for the two products using the proposed ABC system. Management is considering an activity-based costing system in which half of the overhead would continue to be allocated on the basis of direct labor-hours and half would be allocated on the basis of engineering design time.Using the company’s conventional costing system, compute the unit product costs for the two products. The company’s manufacturing overhead costs for the year are expected to be $336,000.These products are customized to some degree for specific customers. Data for the two products for the upcoming year follow: Kunkel Company makes two products and uses a conventional costing system in which a single plantwide predetermined overhead rate is computed based on direct labor-hours. Study with Quizlet and memorize flashcards containing terms like In a process costing system, the application of factory overhead usually would be recorded as an increase in: (CPA adapted), Activity analysis is one of the first stages in implementing an activity-based costing system. ![]()
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