E18-21 & e18-24 | Accounting homework help

E18-21

Calculating Activity-based Costing Overhead Rates

Assume that manufacturing overhead for Glassman Company in the previous exercise consisted of the following activities and costs:

Setup (1,000 setup hours)                                            $144,000

Production scheduling (400 batches)                       60,000

Production engineering (60 change orders)         120,000

Supervision (2,000 direct labor hours)                     56,000

Machine maintenance (12,000 machine hours)  84,000

Total activity costs                                                           $464,000

 

The following additional data were provided for Job 845:

Direct materials costs                                                     $7,000

Direct labor cost (5 Milling direct labor hours;

35 Finishing direct labor hours)                                  $1000

Setup hours                                                                       5 hours

Production scheduling                                                   1 batch

Machine hours used (25 Milling machine hours;

5 Finishing machine hours                                            30 hours

Production engineering                                                                3 change orders

 

a.       Calculate the cost per unit of activity driver for each activity cost category.

b.      Calculate the cost of Job 845 using ABC to assign the overhead costs.

c.       Calculate the cost of Job 845 using the plantwide overhead rate based on machine hours calculated in the previous exercise.

d.      Calculate the cost of Job 845 using the machine hour departmental overhead rate for the Milling Department and a direct labor hour overhead rate for the Finishing Department.

 

E18-24

Traditional Product Costing versus Activity Based Costing

Assume that Panasonic Company has determined its estimated total manufacturing overhead cost for one of its plants to be $204,000 consisting of the following activity cost pools for the month.

Activity Center                                 Activity Costs                    Cost Driver                         Activity Level

Assembly setup                                                $45,000                 Setup hours                                       1,500

Material Handling                            15,000                                  Number of moves                              300

Assembly                                            120,000                 Assembly hours                                             12,000

Maintenance                                       24,000                                 Maintenance hours        1,200

Total                                                   $204,000

Total direct labor hours used during the month were 8,000. Panasonic produced many different electronic products, including the following two products produced during the current month:

                                                                                                                Model x301                        Modelz205

                Units produced                                                                   1,000                                   1,000

                Direct material cost                                                     $15,000                                 $15,000

                Direct Labor Cost                                                          $12,500                             $12,500

                Direct Labor hours                                                                500                                         500

                Setup hours                                                                              50                                         100

                Material moves                                                                                       25                                           50                                   

                Assembly hours                                                                                     800                                         800

                Maintenance hours                                                                10                                          40

 

a.  Calculate the total cost per-unit cost of each model using direct labor hours to assign manufacturing overhead to products.

b.  Calculate the total per-unit cost of each model using activity-based costing to assign manufacturing overhead to products.

c.  Comment on the accuracy of the two methods for determining costs.

 

d.  Discuss some of the strategic implications of your answers to the previous requirements.

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

STAY HOME, SAVE LIVES. Order your essay today and save 20% with the discount code ATOM