Hang Ten Company manufactures surf boards and uses an activity - based costing system to allocate all manufacturing conversion costs. Each surf board consists of 10 separate parts totaling $135 in direct materials, and requires 3.0 hours of machine time to produce. The company incurs no direct labor costs. Additional information follows: Activity Allocation Base Cost Allocation Rate Materials handling Number of parts $3.75 per part Machining Machine hours $3.00 per machine hour Assembling Number of parts $2.50 per part Packaging Number of finished units $4.75 per finished unit What is the total manufacturing cost per surf board? ? ?. $211.25 ? ?. $97.25 OC. $30.00 OD. $227.50
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Total direct materials cost = 10 parts * $3.75 per part = $37.50 Show more…
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Manasvee S.
Kubin Company’s relevant range of production is 18,000 to 22,000 units. When it produces and sells 20,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materials . . . . . . . . . . . . . . . . . . . . . . . . . $7.00 Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4.00 Variable manufacturing overhead . . . . . . . . . $1.50 Fixed manufacturing overhead . . . . . . . . . . . $5.00 Fixed selling expense . . . . . . . . . . . . . . . . . . . $3.50 Fixed administrative expense . . . . . . . . . . . . . $2.50 Sales commissions . . . . . . . . . . . . . . . . . . . . . . $1.00 Variable administrative expense . . . . . . . . . . $0.50 Required: 1. Assume the cost object is units of production: a. What is the total direct manufacturing cost incurred to make 20,000 units? b. What is the total indirect manufacturing cost incurred to make 20,000 units? 2. Assume the cost object is the Manufacturing Department and that its total output is 20,000 units: a. How much total manufacturing cost is directly traceable to the Manufacturing Department? b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department? 3. Assume the cost object is the company’s various sales representatives. Furthermore, assume that the company spent $50,000 of its total fixed selling expense on advertising and the remainder of the total fixed selling expense comprised the fixed portion of the company’s sales representatives’ compensation: a. When the company sells 20,000 units, what is the total direct selling expense that can be readily traced to individual sales representatives? b. When the company sells 20,000 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives? 4. Are Kubin’s administrative expenses always going to be treated as indirect costs in its internal management reports?
Madhur L.
Landen Corporation uses a job-order costing system. At the beginning of the year, the company made the following estimates: Direct labor-hours required to support estimated production: 140,000 Machine-hours required to support estimated production: 70,000 Fixed manufacturing overhead cost: $784,000 Variable manufacturing overhead cost per direct labor-hour: $2.00 Variable manufacturing overhead cost per machine-hour: $4.00 During the year, Job 550 was started and completed. The following information is available with respect to this job: Direct materials: $175 Direct labor cost: $225 Direct labor-hours: 15 Machine-hours: 5 Required: 1. Assume that Landen has historically used a plantwide predetermined overhead rate with direct labor-hours as the allocation base. Under this approach: a. Compute the plantwide predetermined overhead rate. b. Compute the total manufacturing cost of Job 550. c. If Landen uses a markup percentage of 200% of its total manufacturing cost, what selling price would it establish for Job 550? 2. Assume that Landen's controller believes that machine-hours is a better allocation base than direct labor-hours. Under this approach: a. Compute the plantwide predetermined overhead rate. b. Compute the total manufacturing cost of Job 550. c. If Landen uses a markup percentage of 200% of its total manufacturing cost, what selling price would it establish for Job 550? (Round your intermediate calculations to 2 decimal places. Round your "Predetermined Overhead Rate" answers to 2 decimal places and all other answers to the nearest whole dollar.) 1. Direct labor-hours: a. Predetermined overhead rate per DLH b. Total manufacturing cost of Job 550 c. Selling price 2. Machine-hours: a. Predetermined overhead rate per MH b. Total manufacturing cost of Job 550 c. Selling price
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