COVID Co. uses a 5,000 square foot factory space that it rents for $2,500 a month for all its manufacturing activities. Production manager has decided to switch to an activity-based costing system, and has identified its activities as follows: Preparation and Setup, Machining, Finishing, and Quality Control. 600 square feet of the factory are used for machining, while 2,000 square feet (each) are used for Preparation and Setup and Quality Control. Finishing uses 400 square feet. When assigning indirect costs to each activity, how much factory rent should be assigned to the Preparation and Setup cost pool? Select one: O a. $2,000 O b. None of the given ANSWER O c. $300 d. $200 e. $1,000

COVID Co. uses a 5,000 square foot factory space that it rents for $2,500 a month for all its manufacturing activities. Production manager has decided to switch to an activity-based costing system, and has identified its activities as follows: Preparation and Setup, Machining, Finishing, and Quality Control. 600 square feet of the factory are used for machining, while 2,000 square feet (each) are used for Preparation and Setup and Quality Control. Finishing uses 400 square feet. When assigning indirect costs to each activity, how much factory rent should be assigned to the Preparation and Setup cost pool? Select one: O a. $2,000 O b. None of the given ANSWER O c. $300 d. $200 e. $1,000

Name: COVID Co. uses a 5,000 square foot factory space that it rents for $2,
Uploaded: 2024-03-20T06:32:49.000Z
Channel: Bartleby
Description: COVID Co. uses a 5,000 square foot factory space that it rents for $2,500 a month for all itsmanufacturing activities. Production manager has decided to switch to an activity-basedcosting system, and has identified its activities as follows: Preparat

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 33P: Big Mikes, a large hardware store, has gathered data on its overhead activities and associated costs...

See similar textbooks

Similar questions

Big Mikes, a large hardware store, has gathered data on its overhead activities and associated costs for the past 10 months. Nizam Sanjay, a member of the controllers department, believes that overhead activities and costs should be classified into groups that have the same driver. He has decided that unloading incoming goods, counting goods, and inspecting goods can be grouped together as a more general receiving activity, since these three activities are all driven by the number of receiving orders. The 10 months of data shown below have been gathered for the receiving activity. Required: 1. Prepare a scattergraph, plotting the receiving costs against the number of purchase orders. Use the vertical axis for costs and the horizontal axis for orders. 2. Select two points that make the best fit, and compute a cost formula for receiving costs. 3. Using the high-low method, prepare a cost formula for the receiving activity. 4. Using the method of least squares, prepare a cost formula for the receiving activity. What is the coefficient of determination?
Calen Company manufactures and sells three products in a factory of three departments. Both labor and machine time are applied to the products as they pass through each department. The nature of the machine processing and of the labor skills required in each department is such that neither machines nor labor can be switched from one department to another. Calens management is attempting to plan its production schedule for the next several months. The planning is complicated by the fact that labor shortages exist in the community and some machines will be down several months for repairs. Following is information regarding available machine and labor time by department and the machine hours and direct labor hours required per unit of product. These data should be valid for at least the next six months. Calen believes that the monthly demand for the next six months will be as follows: Inventory levels will not be increased or decreased during the next six months. The unit cost and price data for each product are as follows: Required: 1. Calculate the monthly requirement for machine hours and direct labor hours for producing Products 401, 402, and 403 to determine whether or not the factory can meet the monthly sales demand. 2. Determine the quantities of 401, 402, and 403 that should be produced monthly to maximize profits. Prepare a schedule that shows the contribution to profits of your product mix. 3. Assume that the machine hours available in Department 3 are 1,500 instead of 2,700. Calculate the optimal monthly product mix using the graphing approach to linear programming. Prepare a schedule that shows the contribution to profits from this optimal mix. (CMA adapted)
Ingles Corporation is a manufacturer of tables sold to schools, restaurants, hotels, and other institutions. The table tops are manufactured by Ingles, but the table legs are purchased from an outside supplier. The Assembly Department takes a manufactured table top and attaches the four purchased table legs. It takes 16 minutes of labor to assemble a table. The company follows a policy of producing enough tables to ensure that 40 percent of next months sales are in the finished goods inventory. Ingles also purchases sufficient materials to ensure that materials inventory is 60 percent of the following months scheduled production. Ingless sales budget in units for the next quarter is as follows: Ingless ending inventories in units for July 31 are as follows: Required: 1. Calculate the number of tables to be produced during August. 2. Disregarding your response to Requirement 1, assume the required production units for August and September are 2,100 and 1,900, respectively, and the July 31 materials inventory is 4,000 units. Compute the number of table legs to be purchased in August. 3. Assume that Ingles Corporation will produce 2,340 units in September. How many employees will be required for the Assembly Department in September? (Fractional employees are acceptable since employees can be hired on a part-time basis. Assume a 40-hour week and a 4-week month.) (CMA adapted)
Corazon Manufacturing Company has a purchasing department staffed by five purchasing agents. Each agent is paid 28,000 per year and is able to process 4,000 purchase orders. Last year, 17,800 purchase orders were processed by the five agents. Required: 1. Calculate the activity rate per purchase order. 2. Calculate, in terms of purchase orders, the: a. total activity availability b. unused capacity 3. Calculate the dollar cost of: a. total activity availability b. unused capacity 4. Express total activity availability in terms of activity capacity used and unused capacity. 5. What if one of the purchasing agents agreed to work half time for 14,000? How many purchase orders could be processed by four and a half purchasing agents? What would unused capacity be in purchase orders?
XYZ Co. uses a 5,000 square foot factory space that it rents for $3,000 a month for all its manufacturing activities. The company has decided to switch to an activity-based costing system, and has identified its activities as follows: Preparation and Setup, Machining, Finishing, and Quality Control. 500 square feet of the factory are used for machining, while 2,000 square feet (each) are used for Preparation and Setup and Quality Control. Finishing uses 500 square feet. When assigning indirect costs to each activity, how much factory rent should be assigned to the ?Machining cost pool $300 a O $1,200 .b O None of the given answer is correct c O $350 d O $1,400 .e O
XYZ Co.uses a 5,000 square foot factory space that it rents for $3,000 a month for all its manufacturing activities . The company has decided to switch to an activity -based costing system , and has identified its activities as follows : Preparation and Setup, Machining , Finishing , and Quality Control.500 square feet of the factory are used for machining , while 2,000 square feet (each ) are used for Preparation and Setup and Quality Control.Finishing uses 500 square feet. When assigning indirect costs to each activity , how much factory rent ?should be assigned to the Preparation and Setup cost pool a. $ 1,400 b. $ 1,200. c. $300 d. None of the given answer is correct e. $ 350
XYZ Co. uses a 5,000 square foot factory space that it rents for $3,000 a month for all its manufacturing activities. The company has decided to switch to an activity-based costing system, and has identified its activities as follows: Preparation and Setup, Machining, Finishing, and Quality Control. 500 square feet of the factory are used for machining, while 2,000 square feet (each) are used for Preparation and Setup and Quality Control. Finishing uses 500 square feet. When assigning indirect costs to each activity, how much factory rent should be assigned to the Machining cost pool? O a. $300 Ob. $1,200 O c. None of the given answer is correct. O d. $350 O e. $1,400
XYZ Co. uses a 5,000 square foot factory space that it rents for $3,500 a month for all its manufacturing activities. The company has decided to switch to an activity-based costing system, and has identified its activities as follows: Preparation and Setup, Machining, Finishing, and Quality Control. 500 square feet of the factory are used for machining, while 2,000 square feet (each) are used for Preparation and Setup and Quality Control. Finishing uses 500 square feet. When assigning indirect costs to each activity, how much factory rent should be assigned to the Quality Control cost pool? O a. None of the given answer is correct. b. $1,400 O c. $300 O d. $1,200 O e. $350
COVID Co. uses a 5,000 square foot factory space that it rents for $2,500 a month for all its manufacturing activities. Production manager has decided to switch to an activity-based costing system, and has identified its activities as follows: Preparation and Setup, Machining, Finishing, and Quality Control. 600 square feet of the factory are used for machining, while 2,000 square feet (each) are used for Preparation and Setup and Quality Control. Finishing uses 400 square feet. When assigning indirect costs to each activity, how much factory rent should be assigned to the Machining cost pool? Select one: a. $2,000 Ob. $200 Oc. $300 d. $1,000 O e. None of the given ANSWER Next page Questions video Jump to... Table- web and Windows W
COVID Co. uses a 5,000 square foot factory space that it rents for $2,500 a month for all its manufacturing activities. Production manager has decided to switch to an activity-based costing system, and has identified its activities as follows: Preparation and Setup, Machining, Finishing, and Quality Control. 600 square feet of the factory are used for machining, while 2,000 square feet (each) are used for Preparation and Setup and Quality Control. Finishing uses 400 square feet. When assigning indirect costs to each activity, how much factory rent should be assigned to the Finishing cost pool? Select one: O a $2.000 Ob. S1.000 Oc 5200 O d.$300 Oe. None of the given ANSWER,
Hercules Inc. manufactures elliptical exercise machines and treadmills. The products are produced in its Fabrication and Assembly production departments. In addition to production activities, several other activities are required to produce the two products. These activities and their associated activity rates are as follows: Activity Activity Rate Fabrication $33 per machine hour Assembly $35 per direct labor hour Setup $87 per setup Inspecting $24 per inspection Production scheduling $23 per production order Purchasing $14 per purchase order The activity-base usage quantities and units produced for each product were as follows: Activity Base Elliptical Machines Treadmill Machine hours 750 500 Direct labor hours 238 288 Setups 31 31 Inspections 25 32 Production orders 60 50 Purchase orders 328 100 Units produced 540 420 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform…
Atlas Enterprises Inc. manufactures elliptical exercise machines and treadmills. The products are produced in its Fabrication and Assembly production departments. In addition to production activities, several other activities are required to produce the two products. These activities and their associated activity rates are as follows: Activity Activity Rate Fabrication $27 per machine hour Assembly $11 per direct labor hour Setup $45 per setup Inspecting $23 per inspection Production scheduling $12 per production order Purchasing $9 per purchase order The activity-base usage quantities and units produced for each product were as follows: Activity Base Elliptical Machines Treadmill Machine hours 1,861 1,098 Direct labor hours 413 161 Setups 62 19 Inspections 615 369 Production orders 65 13 Purchase orders 211 129 Units produced 295 198 Use the activity rate and usage information to calculate the total activity cost and…