Chapter 17 Accounting Study Guide PDF

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It is a homework assignment with explanations on how to solve the problems. ...

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Chapter 17 Accounting Study Guide Question 1

Question 2

1. Compute a single plantwide overhead rate, assuming that the company assigns overhead based on 125,000 budgeted direct labor hours

Estimated Overhead Cost (Add all expected costs) 218,000

=$17.44

Estimated Directed Labor Hours (Given) 125,00

2. In January 2017, the Deluxe model required 2,500 direct labor hours and the basic model required 6,000 direct labor hours. Assign overhead costs to each model using the single plantwide overhead rate

Total DL Hours required x Plantwide OH Rate = Total Overhead cost Given

Question 3

Already Found it = Answer

Compute activity rates for each activity and assign overhead costs to each product model using activity-based costing (ABC). What is the overhead cost per unit of each model?

Expected Cost

= Activity Rate

Expected Activity Example: Handling Material 625,000/100,000 = 6.25 per part Activity Rate (Already found) x Cost driver quantity incurred (2nd table) = OH allocated

Example: Handling Material 6.25 x 120,00 = 125,000 Total Overhead assigned (Find total oh allocated) = Average Overhead Cost Production Volume (unit) (2nd table look for production volume)

Question 4 Textra Plastics produces parts for a variety of small machine manufacturers. Most products go through two operations, molding and trimming, before they are ready for packaging. Expected costs and activities for the molding department and for the trimming department for 2017 follow

1. Compute the plantwide overhead rate using direct labor hours as the base

Estimated Overhead Cost (Overhead cost for both molding and trimming) 1,320,00 =$13.20 Estimated Directed Labor Hours (DLH for both molding and trimming) 100,000

2. Determine the overhead cost assigned to each product line using the plantwide rate computed in requirement 1

Activity Driver x Plantwide OH rate = Total Overhead cost Ex: A27C (DLH Molding + DLH Trimming) X (found already)

Question 5

Remember what ever you based either MH or DLH for Departmental OH Rate you use to find the activity driver For Molding use Machine hours since you use machine hours for overhead rate For trimming use DLH because DLH for overhead rate

Question 6 Laval produces lamps and home lighting fixtures. Its most popular product is a brushed aluminum desk lamp. This lamp is made from components shaped in the fabricating department and assembled in the assembly department. Information related to the 35,000 desk lamps produced annually follows

1. Determine the plantwide overhead rate for Laval using direct labor hours as a base

Estimated Overhead cost = (Fabricating overhead cost + assembly overhead cost) Estimated direct labor hours = (Fabricating DLH + assembly DLH) 2. Determine the total manufacturing cost per unit for the aluminum desk lamp using the plantwide overhead rate

DM= (1st table given )280,000 DL-Fabricating= (1st table Direct Labor - fabricating) 140,000 DL-Assembly= (1st table Direct Labor - assembly) 464,000 Overhead= (Fabricating DLH + Assembly DLH) X Plantwide OH Rate (7,000+16,000) x 2.50 =57,500

3. Compute departmental overhead rates based on machine hours in the fabricating department and direct labor hours in the assembly department

Overhead cost / MH for Fabricating = Departmental overhead rate Overhead cost / DLH for Assembly= departmental overhead rate 4. Use departmental overhead rates from requirement 3 to determine the total manufacturing cost per unit for the aluminum desk lamps

Fabricating= Fabricating MH (15,040) x Fabricating overhead rate (3.75) Assembly = Assembly MH (16,000) x Fabricating overhead rate (1.60)

Question 7

1. Using a plantwide overhead rate based on machine hours, compute the overhead cost per unit for each product line.

Overhead Cost (Add all overhead cost) 1,004,000+465,300+232,000 Machine Hours (Look for Machine Hours) 6,000 2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $250 for Model 145 and $180 for Model 212.

Activity Driver x Plantwide OH Rate = Total OH Cost EX: Model 125 (Model 125 MH) x Found in number 1 = Total OH Cost x Units produced = OH Cost per Unit Ex: Model 125 (Found up above ) x Units produced for model 125

Rest is look at table better easy to follow Question 8

1. & 2. Using ABC, compute the firm's activity overhead rates. Form activity cost pools where appropriate. Assign costs to a 9,200 square foot job that requires 450 contact hours, 340 design hours, and 200 days to complete

Expected Cost/ Expected Activty Driver = Activty Rate Activty rate x Activty driver incurred = overhead assgined

Question 9

Question 10 Classify the following activities in providing medical services at Healthsmart Clinic as unit level (U), batch level (B), product level (P), or facility level (F) and also identify an activity driver that might be used to measure these activities at the clinic

Question 11

1 & 2. Determine the cost of each product line using ABC. What is the cost per bottle for Hi-Voltage and EasySlim?

Activity Rate X Activity incurred = over head assigned

3. If Hi-Voltage sells for $3.7 per bottle of Hi-Voltage tha

es the company earn

The price of EasySlim must cover the costs associated with the product, so the minimum price for this product is $0.53 / bottle....