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valllngs maAay Help comn Perfect Flooring installs oak and other hardwood floors in homes and businesses. The company uses an activity-based costing system for its overhead costs. The company has provided the following data concerning its annual overhead costs and its activity-based costing system: Overhead Costs: Production overhead $190,000 Office expense $140,000 Total $330,000 Distribution of resource consumption Activity Cost Pools Job Support Other 40% 20% Installing Floors 40% Total 100% Production overhead Office expenses 10% 60% 30% 100% The Other activity cost pool consists of the costs of idle capacity and organization-sustaining costs. The amount of activity for the year is as follows: Activity Cost Pool Annual Activity Installing floors 200 squares Job support 160 jobs Other Not applicable A square is a measure of area that is roughly equivalent to 1,000 square meters. Required: 1) Prepare the first-stage allocation of overhead costs to the activity cost pools by filling in the table below: Installing Floors Job Support Other Total Production overhead Office expense Total 2) Compute the activity rates (i.e. cost per unit of activity) for the Installing Floors and Job Support activity cost pools by filling in the table below: Installing Floors Job Support Production overhead Office expense Total 3) Compute the overhead cost, according to the activity-based costing system, of a job that involves installing 3.4 squares. Accessibility: Investigate to search Focus 88F Mostly 

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Perfect Flooring installs oak and other hardwood floors in homes and businesses. The company uses an activity-based costing system for its overhead costs. The company has provided the following data concerning its annual overhead costs and its activity-based costing system: Overhead Costs: Production overhead $190,000 Office expense $140,000 Total $330,000 Distribution of resource consumption Activity Cost Pools Job Support Other 40% 20% Installing Floors 40% Total 100% Production overhead Office expenses 10% 60% 30% 100% The Other activity cost pool consists of the costs of idle capacity and organization-sustaining costs. The amount of activity for the year is as follows: Activity Cost Pool Annual Activity Installing floors 200 squares Job support 160 jobs Other Not applicable A square is a measure of area that is roughly equivalent to 1,000 square meters. Required: 1) Prepare the first-stage allocation of overhead costs to the activity cost pools by filling in the table below: Installing Floors Job Support Other Total Production overhead Office expense Total 2) Compute the activity rates (i.e. cost per unit of activity) for the Installing Floors and Job Support activity cost pools by filling in the table below: Installing Floors Job Support Production overhead Office expense Total 3) Compute the overhead cost, according to the activity-based costing system, of a job that involves installing 3.4 squares. Accessibility: Investigate to search Focus 88F Mostly
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valllngs maaay help comn perfect flooring installs oak and other hardwood floors in homes and businesses the company uses an activity based costing system for its overhead costs the company 18944

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Horngren’s Cost Accounting
Horngren’s Cost Accounting
Srikant M. Datar, Madhav V. Rajan 16th Edition
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valllngs maAay Help comn Perfect Flooring installs oak and other hardwood floors in homes and businesses. The company uses an activity-based costing system for its overhead costs. The company has provided the following data concerning its annual overhead costs and its activity-based costing system: Overhead Costs: Production overhead $190,000 Office expense $140,000 Total $330,000 Distribution of resource consumption Activity Cost Pools Job Support Other 40% 20% Installing Floors 40% Total 100% Production overhead Office expenses 10% 60% 30% 100% The Other activity cost pool consists of the costs of idle capacity and organization-sustaining costs. The amount of activity for the year is as follows: Activity Cost Pool Annual Activity Installing floors 200 squares Job support 160 jobs Other Not applicable A square is a measure of area that is roughly equivalent to 1,000 square meters. Required: 1) Prepare the first-stage allocation of overhead costs to the activity cost pools by filling in the table below: Installing Floors Job Support Other Total Production overhead Office expense Total 2) Compute the activity rates (i.e. cost per unit of activity) for the Installing Floors and Job Support activity cost pools by filling in the table below: Installing Floors Job Support Production overhead Office expense Total 3) Compute the overhead cost, according to the activity-based costing system, of a job that involves installing 3.4 squares. Accessibility: Investigate to search Focus 88F Mostly
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Required information [The following information applies to the questions displayed below.] Hickory Company manufactures two products—15,000 units of Product Y and 7,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all $696,000 of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z: Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity Machining Machine-hours $ 224,400 11,000 MHs Machine setups Number of setups $ 129,600 240 setups Product design Number of products $ 88,000 2 products General factory Direct labor-hours $ 254,000 13,200 DLHs Activity Measure Product Y Product Z Machine-hours 7,400 3,600 Number of setups 60 180 Number of products 1 1 Direct labor-hours 8,400 4,800

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Marinja Company uses job order costing. The following data summarize the operations related to production for May:May 1 Materials purchased on account, $644,380. 2 Materials requisitioned, $670,250, of which $71,770 was for general factory use. 31 Factory labor used, $637,900, of which $88,640 was indirect. 31 Other costs incurred on account for factory overhead, $142,060; selling expenses, $238,560; and administrative expenses, $151,300. 31 Prepaid expenses expired for factory overhead were $29,450; for selling expenses, $27,540; and for administrative expenses, $18,720. 31 Depreciation of office building was $84,480; of office equipment, $43,730; and of factory equipment, $32,270. 31 Factory overhead costs applied to jobs, $379,790. 31 Jobs completed, $988,380. 31 Cost of goods sold, $921,340. Required: Journalize the entries to record the summarized operations.CHART OF ACCOUNTSMarinja Company General Ledger ASSETS 110 Cash 121 Accounts Receivable 125 Notes Receivable 126 Interest Receivable 131 Materials 132 Work in Process 133 Factory Overhead 134 Finished Goods 141 Supplies 142 Prepaid Insurance 143 Prepaid Expenses 181 Office Building 191 Office Equipment 192 Accumulated Depreciation-Buildings and Equipment LIABILITIES 210 Accounts Payable 221 Utilities Payable 231 Notes Payable 236 Interest Payable 241 Lease Payable 251 Wages Payable 252 Consultant Fees Payable EQUITY 311 Common Stock 340 Retained Earnings 351 Dividends REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Goods Sold 520 Wages Expense 531 Selling Expenses 532 Insurance Expense 533 Utilities Expense 534 Office Supplies Expense 540 Administrative Expenses 561 Depreciation Expense-Office Building 562 Depreciation Expense-Office Equipment 590 Miscellaneous Expense 710 Interest Expense

Akash M.
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Hi-Tek Manufacturing, Incorporated, makes two types of industrial component parts—the B300 and the T500. An absorption costing income statement for the most recent period is shown: Hi-Tek Manufacturing Incorporated Income Statement Sales $1,751,700 Cost of goods sold $1,219,858 Gross margin $531,842 Selling and administrative expenses $640,000 Net operating loss $ (108,158) Hi-Tek produced and sold 60,200 units of B300 at a price of $21 per unit and 12,500 units of T500 at a price of $39 per unit. The company’s traditional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labor dollars as the allocation base. Additional information relating to the company’s two product lines is shown below: B300 T500 Total Direct materials $400,700 $162,200 $562,900 Direct labor $120,100 $42,600 $162,700 Manufacturing overhead $494,258 Cost of goods sold $1,219,858 The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek’s ABC implementation team concluded that $52,000 and $104,000 of the company’s advertising expenses could be directly traced to B300 and T500, respectively. The remainder of the selling and administrative expenses was organization-sustaining in nature. The ABC team also distributed the company’s manufacturing overhead to four activities as shown below: Activity Cost Pool (and Activity Measure) Manufacturing Overhead Activity B300 T500 Total Machining (machine-hours) $202,958 90,200 62,400 152,600 Setups (setup hours) $130,000 75 250 325 Product-sustaining (number of products) $101,200 1 1 2 Other (organization-sustaining costs) $60,100 NA NA NA Total manufacturing overhead cost $494,258 Required: 1. Compute the product margins for the B300 and T500 under the company’s traditional costing system. 2. Compute the product margins for B300 and T500 under the activity-based costing system. 3. Prepare a quantitative comparison of the traditional and activity-based cost assignments.

Akash M.
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Transcript

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00:01 Hello students, here is a question.
00:02 We have six questions to solve here.
00:06 So, hickroy company manufactured two products, 15 ,000 units of product y and 7 ,000 units of product z.
00:14 The company uses a plant wide overhead rate based on the direct labor hours.
00:19 It is considered implementing an activity based costing.
00:22 The system of allocation is $696 ,000 and manufacturing overhead cost as four cost pool.
00:29 So, there are some information given in the question related to the related to the answer.
00:34 So, let us refer that.
00:36 First, we'll solve the first question.
00:38 So, the first question is what is the company plant wide overhead rate? so, plant wide overhead rate of a company is plant wide overhead rate of a company will be estimated overhead, estimated overhead cost it is 23 ,000, sorry, 231 ,000 dollars plus 180 ,000 dollars plus 94 ,000 dollars plus 26 ,000 dollars, sorry, 260 ,000 dollars which gives us 765 ,000 dollars and direct labor hours will be, so direct labor hours will be 9 ,000 plus 1 ,000 which gives us 10 ,000 labor hours and plant overhead rate will be plant wide overhead rates estimated overhead cost divided by, so divided by cost.
02:12 So, that will be 765 ,000 divided by 10 ,000 divided by labor hours, direct labor hours.
02:27 So, it comes to 76 .50 per direct labor hours.
02:33 So, therefore, plant wide overhead rate will be plant wide overhead rates are 76 .50.
02:43 This is the answer for first question.
02:45 Now, we'll do the second sub question...
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