Wall Nuts, Incorporated produces paneling that requires two processes, A and B, to complete. Oak is the best-selling type of paneling produced. Information related to the 40,000 units of oak paneling produced annually is shown in the following table Direct materials Direct labor Department A (6,000 DLH x $25 per DLH) Department B (35,125 DLH x $16 per DLH) Machine Hours Direct labor hours Machine hours Budgeted overhead costs Department A Department B 24,000MH 32,000MH Wall Nuts' total expected overhead costs and related overhead data are shown below. Department A 67,000 DLH 100,000MM 450,000 Multiple Choice $36.00 $27.30 $ 380,000 $ Use the above data for Wall Nuts, Incorporated to compute the total product cost per unit of oak paneling assuming the company uses departmental overhead rates based on machine hours in Department A and machine hours in Department B $18.20 $ 150,000 $ 562,000 $8.70 Department B 170,000 DLH 80,000 MH $ 600,000

Wall Nuts, Incorporated produces paneling that requires two processes, A and B, to complete. Oak is the best-selling type of paneling produced. Information related to the 40,000 units of oak paneling produced annually is shown in the following table Direct materials Direct labor Department A (6,000 DLH x $25 per DLH) Department B (35,125 DLH x $16 per DLH) Machine Hours Direct labor hours Machine hours Budgeted overhead costs Department A Department B 24,000MH 32,000MH Wall Nuts' total expected overhead costs and related overhead data are shown below. Department A 67,000 DLH 100,000MM 450,000 Multiple Choice $36.00 $27.30 $ 380,000 $ Use the above data for Wall Nuts, Incorporated to compute the total product cost per unit of oak paneling assuming the company uses departmental overhead rates based on machine hours in Department A and machine hours in Department B $18.20 $ 150,000 $ 562,000 $8.70 Department B 170,000 DLH 80,000 MH $ 600,000

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 13EB: Stacks manufactures two different levels of hockey sticks: the Standard and the Slap Shot. The total...

See similar textbooks

Similar questions

Stacks manufactures two different levels of hockey sticks: the Standard and the Slap Shot. The total overhead of $600,000 has traditionally been allocated by direct labor hours, with 400,000 hours for the Standard and 200.000 hours for the Slap Shot. After analyzing and assigning costs to two cost pools, it was determined that machine hours is estimated to have $450.000 of overhead, with 30,000 hours used on the Standard product and 15,000 hours used on the Slap Shot product. It was also estimated that the inspection cost pool would have $150,000 of overhead, with 25,000 hours for the Standard and 5,000 hours for the Slap Shot. What is the overhead rate per product, under traditional and under ABC costing?
TyeDye Lights makes two products: Party and Holiday. It takes 80,900 direct labor hours to manufacture the Party Line and 93,500 direct labor hours to manufacture the Holiday Line. Overhead consists of $225,000 in the machine setup cost pool and $149,960 in the packaging cost pool. The machine setup pool has 52,000 setups for the Party product and 98,000 setups for the Holiday product. The packaging cost pool has 26,000 parts in the Party product and 39,200 parts for the Holiday product. Using the traditional cost method of direct labor hours, what is the predetermined overhead rate? A. $1.50 per direct labor hour B. $2.15 per direct labor hour C. $2.30 per direct labor hour D. $3.80 per direct labor hour
Glassworks Inc. produces two types of glass shelving, rounded edge and squared edge, on the same production line. For the current period, the company reports the following data. Direct materials Rounded Edge $ 9,500 Total $ 30,900 Direct labor Squared Edge $ 21,400 12,000 36,000 6,000 Overhead (300% of direct labor cost) 18,000 54,000 18,000 Total cost $102,900 $ 33,500 10,500 ft. $ 3.19 $ 69,400 14,200 ft. Quantity produced Average cost per ft. (rounded) $ 4.89 Glassworks's controller wishes to apply activity-based costing (ABC) to allocate the $54,000 of overhead costs incurred by the two product lines to see whether cost per foot would change markedly from that reported above. She has collected the following information. Overhead Cost Category Cost (Activity Cost Pool) Supervision $ 2,160 28,840 Depreciation of machinery Assembly line preparation 23,000 Total overhead $ 54,000 She has also collected the following information about the cost drivers for each category (cost pool) and…
Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models - one mainly used for fine eyewear (F-32) and another for lenses used in binoculars, cameras, and similar equipment (B-13).The manufacturing cost of each unit is calculated using activity-based costing, using the following manufacturing cost pools: Cost Pools Allocation Base Costing Rate Materials handling Number of parts $ 3.00 per part Manufacturing supervision Hours of machine time $ 14.86 per hour Assembly Number of parts $ 3.60 per part Machine setup Each setup $ 56.80 per setup Inspection and testing Logged hours $ 45.80 per hour Packaging Logged hours $ 19.80 per hour LCI currently sells the B-13 model for $3,125 and the F-32 model for $2,900. Manufacturing costs and activity usage for the two products are as follows: B-13 F-32 Direct materials $ 164.80 $ 75.84 Number of parts 166 126 Machine hours 8.20 4.26…
Lynwood, Inc. produces two different products (Product A and Product X) using two different activities: Machining, which uses machine hours as an activity driver, and Inspection, which uses number of batches as an activity driver. The activity rate for Machining is $130 per machine hour, and the activity rate for Inspection is $520 per batch. The activity drivers are used as follows: Product A Product X Total Machine hours 1,200 3,200 4,400 Number of batches 46 16 62 What is the amount of Machining cost assigned to Product X? Multiple Choice $416,000 $27,500 $520,000 $130,000
Lens Care Incorporated (LCI) manufactures specialized equipment for polishing optical lenses. There are two models - one mainly used for fine eyewear (F-32) and another for lenses used in binoculars, cameras, and similar equipment (B-13).The manufacturing cost of each unit is calculated using activity-based costing, using the following manufacturing cost pools: Cost Pools Allocation Base Costing Rate Materials handling Number of parts $ 2.50 per part Manufacturing supervision Hours of machine time $ 14.81 per hour Assembly Number of parts $ 3.35 per part Machine setup Each setup $ 56.55 per setup Inspection and testing Logged hours $ 45.55 per hour Packaging Logged hours $ 19.55 per hour LCI currently sells the B-13 model for $2,000 and the F-32 model for $1,500. Manufacturing costs and activity usage for the two products are as follows: B-13 F-32 Direct materials $ 164.55 $ 75.64 Number of parts 161 121 Machine hours 7.95 4.21 Inspection time…
Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models - one mainly used for fine eyewear (F-32) and another for lenses used in binoculars, cameras, and similar equipment (B-13).The manufacturing cost of each unit is calculated using activity-based costing, using the following manufacturing cost pools: Cost Pools Allocation Base Costing Rate Materials handling Number of parts $ 2.50 per part Manufacturing supervision Hours of machine time $ 14.81 per hour Assembly Number of parts $ 3.35 per part Machine setup Each setup $ 56.55 per setup Inspection and testing Logged hours $ 45.55 per hour Packaging Logged hours $ 19.55 per hour LCI currently sells the B-13 model for $2,000 and the F-32 model for $1,500. Manufacturing costs and activity usage for the two products are as follows: B-13 F-32 Direct materials $ 164.55 $ 75.64 Number of parts 161 121 Machine hours 7.95 4.21…
Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models - one mainly used for fine eyewear (F-32) and another for lenses used in binoculars, cameras, and similar equipment (B-13).The manufacturing cost of each unit is calculated using activity-based costing, using the following manufacturing cost pools: Cost Pools Allocation Base Costing Rate Materials handling Number of parts $ 2.50 per part Manufacturing supervision Hours of machine time $ 14.81 per hour Assembly Number of parts $ 3.35 per part Machine setup Each setup $ 56.55 per setup Inspection and testing Logged hours $ 45.55 per hour Packaging Logged hours $ 19.55 per hour LCI currently sells the B-13 model for $2,000 and the F-32 model for $1,500. Manufacturing costs and activity usage for the two products are as follows: B-13 F-32 Direct materials $ 164.55 $ 75.64 Number of parts 161 121 Machine hours 7.95 4.21…
Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models - one mainly used for fine eyewear (F-32) and another for lenses used in binoculars, cameras, and similar equipment (B-13).The manufacturing cost of each unit is calculated using activity-based costing, using the following manufacturing cost pools: Cost Pools Allocation Base Costing Rate Materials handling Number of parts $ 3.20 per part Manufacturing supervision Hours of machine time $ 14.88 per hour Assembly Number of parts $ 3.70 per part Machine setup Each setup $ 56.90 per setup Inspection and testing Logged hours $ 45.90 per hour Packaging Logged hours $ 19.90 per hour LCI currently sells the B-13 model for $3,575 and the F-32 model for $3,460. Manufacturing costs and activity usage for the two products are as follows: B-13 F-32 Direct materials $ 164.90 $ 75.92 Number of parts 168 128 Machine hours 8.30 4.28…
Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models - one mainly used for fine eyewear (F-32) and another for lenses used in binoculars, cameras, and similar equipment (B-13).The manufacturing cost of each unit is calculated using activity-based costing, using the following manufacturing cost pools: Cost Pools Allocation Base Costing Rate Materials handling Number of parts $ 2.40 per part Manufacturing supervision Hours of machine time $ 14.80 per hour Assembly Number of parts $ 3.30 per part Machine setup Each setup $ 56.50 per setup Inspection and testing Logged hours $ 45.50 per hour Packaging Logged hours $ 19.50 per hour LCI currently sells the B-13 model for $1,775 and the F-32 model for $1,220. Manufacturing costs and activity usage for the two products are as follows: B-13 F-32 Direct materials $ 164.50 $ 75.60 Number of parts 160 120 Machine hours 7.90 4.20…
Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models - one mainly used for fine eyewear (F-32) and another for lenses used in binoculars, cameras, and similar equipment (B-13).The manufacturing cost of each unit is calculated using activity-based costing, using the following manufacturing cost pools: Cost Pools Allocation Base Costing Rate Materials handling Number of parts $ 2.40 per part Manufacturing supervision Hours of machine time $ 14.80 per hour Assembly Number of parts $ 3.30 per part Machine setup Each setup $ 56.50 per setup Inspection and testing Logged hours $ 45.50 per hour Packaging Logged hours $ 19.50 per hour LCI currently sells the B-13 model for $1,775 and the F-32 model for $1,220. Manufacturing costs and activity usage for the two products are as follows: B-13 F-32 Direct materials $ 164.50 $ 75.60 Number of parts 160 120 Machine hours 7.90 4.20…
CardioTrainer Equipment Company manufactures stationary bicycles and treadmills. The products are produced in the 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:ActivityActivity RateFabrication$22 per machine hour (mh)Assembly$12 per direct labor hour (dlh)Setup$40 per setupInspecting$18 per inspectionProduction scheduling$8 per production orderPurchasing$5 per purchase orderThe activity-base usage quantities and units produced for each product were as follows:Stationary BicycleTreadmillMachine hours1,6801,070 Direct labor hours243131 Setups4520 Inspections15894 Production orders6032 Purchase orders24098 Units produced500350Use the activity rate and usage information to compute the total activity costs and the activity costs per unit for each product. If required, round your answers to two decimal places.