Bus 503 Chapter 5 HW Solutions

Chapter 05 - Activity-Based Costing and Management
PROBLEM 5-46 (60 MINUTES)

1.
The predetermined overhead rate is calculated as follows:

Predetermined overhead rate = Budgeted manufacturing overhead/budgeted directlabor hours = $1,224,000/102,000* = $12 per hour
*Direct labor, budgeted hours:
REG: 5,000 units 9 hours.....................................
ADV: 4,000 units 11 hours....................................
SPE: 1,000 units 13 hours....................................
Total direct-labor hours........................................................
45,000 hours
44,000 hours
13,000 hours
102,000 hours
5-1
Copyright 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
PROBLEM 5-46 (CONTINUED)

2. Activity-based-costing analysis:
Activity
Activity
Cost Pool
Cost
Driver
Machine
Hours
Cost
Driver
Quantity
Pool
Rate
$
115,000 2.70
Machine
Related
$310,500
Material
Hand.
52,500
Prod.
Runs
100 525.00
Purch.
75,000
Purch.
Orders
300 250.00
Setup
85,000
Prod.
Runs
100 850.00
Inspect.
27,500
Inspect.
Hours
1,100
25.00
Ship.
66,000
Ship.
1,100
60.00
Eng.
32,500
Eng.
Hours
650
50.00
Fac.
575,000
115,000
5.00
Grand
Total
$1,224,000
Machine
Hours
Product
Line
REG
ADV
GMT
Total
REG
ADV
GMT
Total
REG
ADV
GMT
Total
REG
ADV
GMT
Total
REG
ADV
GMT
Total
REG
ADV
GMT
Total
REG
ADV
GMT
Total
REG
ADV
GMT
Total
Grand
Total
Cost
Driver
Quantity
for
Product
Line
50,000
48,000
17,000
115,000
40
40
20
100
100
96
104
300
40
40
20
100
400
400
300
1,100
500
400
200
1,100
250
200
200
650
50,000
48,000
17,000
115,000
Activity
Cost for
Product
Line
$135,000
129,600
45,900
$310,500
$ 21,000
21,000
10,500
$ 52,500
$ 25,000
24,000
26,000
$ 75,000
$ 34,000
34,000
17,000
$ 85,000
$ 10,000
10,000
7,500
$ 27,500
$ 30,000
24,000
12,000
$ 66,000
$ 12,500
10,000
10,000
$ 32,500
$250,000
240,000
85,000
$575,000
Product
Line
Prod.
Volume
5,000
4,000
1,000
Activity
Cost per
Unit of
Product
$27.00
32.40
45.90
5,000
4,000
1,000
4.20
5.25
10.50
5,000
4,000
1,000
5.00
6.00
26.00
5,000
4,000
1,000
6.80
8.50
17.00
5,000
4,000
1,000
2.00
2.50
7.50
5,000
4,000
1,000
6.00
6.00
12.00
5,000
4,000
1,000
2.50
2.50
10.00
5,000
4,000
1,000
50.00
60.00
85.00
$1,224,000
5-2
Education.

3.
Calculation of new product costs under ABC.
Direct material.................................
Direct labor (not including
set-up time).................................
Total direct costs per unit...............
REG
$129.00
ADV
$151.00
GMT
$203.00
171.00 (9 hr. @ $19)

$300.00
209.00 (11 hr. @ $19)

$360.00
247.00 (13 hr. @ $19)

$450.00
$ 32.40
5.25
6.00
8.50
2.50
6.00
2.50
60.00
$ 45.90
10.50
26.00
17.00
7.50
12.00
10.00
85.00
$123.15
$483.15
$213.90
$663.90
Manufacturing overhead (based on ABC):

Machine-related..........................
$ 27.00
Material handling.......................
4.20
Purchasing..................................
5.00
Setup...........................................
6.80
Inspection...................................
2.00
Packing/shipping.......................
6.00
Engineering design....................
2.50
Facility.........................................
50.00
Total ABC overhead
cost per unit................................
$103.50
Total product cost per unit.............
$403.50
5-3
Education.

4.
Comparison of costs and target prices under two alternative product-costing

systems:
Reported unit overhead cost:

Traditional, volume-based costing system
...................................................................................
Activity-based costing system
...................................................................................
Reported unit product cost (direct material, direct
labor and overhead):
...................................................................................
...................................................................................
Sales price data:
Original target price (130% of product cost based
on traditional, volume-based costing system)
...................................................................................
New target price (130% of product cost based
activity-based costing system)
...................................................................................
Actual current selling price..........................................
5.
ADV
GMT
$108.00
$132.00
$156.00
103.50
123.15
213.90
408.00
492.00
606.00
403.50
483.15
663.90
530.40
639.60
787.80
524.55
628.10
863.07
525.00
628.00
800.00
The REG and ADV products were overcosted by the traditional system, and the GMT
product was undercosted by the traditional system
Reported unit product cost:

...................................................................................
...................................................................................
Cost distortion:
REG and ADV overcosted by traditional system
...................................................................................
GMT undercosted by traditional system................
6.
REG
$408.00
$492.00
$606.00
403.50
483.15
663.90
$ 4.50
$ 8.85
($ 57.90)
In the electronic version of the solutions manual, press the CTRL key and click on
the following link: 10E - Build a Spreadsheet 05-46.xls
5-4
Education.
PROBLEM 5-47 (25 MINUTES)

The information supplied by the ABC project team is in columns A, B, C, D, F, G, and I.
Activity
Activity
Cost
Pool
Cost
Driver
Cost
Driver
Quantity
Material $52,500 Production

Handling
Runs
100
Product
Line
Cost
Driver
Quantity
for
Product
Line
$525.00 REG
ADV
GMT
Total
40
40
20
100
Pool
Rate
Activity
Cost for
Product
Line
$21,000
21,000
10,500
$52,500
Product
Line
Production
Volume
Activity
Cost
per Unit
of
Product
5,000
4,000
1,000
$ 4.20
5.25
10.50
The results of the ABC calculations are in columns E, H and J. The ABC calculations are as
follows:
(1) Compute pool rate for material-handling activity:
Activity cost pool cost driver quantity = pool rate
$52,500
100
= $525.00
(2) Compute total activity cost for each product line:

Product
Line
REG
ADV
GMT
Pool Rate
Cost Driver
Quantity for
x Product Line
$525.00 x
525.00 x
525.00 x
Activity Cost for

Each Product Line
=
=
=
40
40
20
$21,000
21,000
10,500
(3) Compute product cost per unit for each product line:
Activity Cost
for Each
Product
Product
Line
Line
REG
ADV
GMT
$21,000
21,000
10,500
Product Line
Production Volume
5,000
4,000
1,000
=
=
=
=
Activity Cost
per Unit
of Product
$ 4.20
5.25
10.50
5-5
Education.
5-6
Education.

Bus 503 Chapter 5 HW Solutions

Încărcat de

Informații document

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

Bus 503 Chapter 5 HW Solutions

Încărcat de

Drepturi de autor:

Formate disponibile

Chapter 05 - Activity-Based Costing and Management

PROBLEM 5-46 (60 MINUTES)

The predetermined overhead rate is calculated as follows:

Chapter 05 - Activity-Based Costing and Management

PROBLEM 5-46 (CONTINUED)

Chapter 05 - Activity-Based Costing and Management

PROBLEM 5-46 (CONTINUED)

Calculation of new product costs under ABC.

171.00 (9 hr. @ $19)

209.00 (11 hr. @ $19)

247.00 (13 hr. @ $19)

Manufacturing overhead (based on ABC):

Chapter 05 - Activity-Based Costing and Management

PROBLEM 5-46 (CONTINUED)

Comparison of costs and target prices under two alternative product-costing

Reported unit overhead cost:

Reported unit product cost:

Chapter 05 - Activity-Based Costing and Management

PROBLEM 5-47 (25 MINUTES)

Material $52,500 Production

(2) Compute total activity cost for each product line:

Activity Cost for

Chapter 05 - Activity-Based Costing and Management

S-ar putea să vă placă și