MANAGERIAL ACCOUNTING Q1 Panamint Systems Corporation is est

MANAGERIAL ACCOUNTING

Q1:

Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below.

Determine the activity-based cost for each disk drive unit.

$326.93

$238.77

$18.36

$602.44

Q2:

The Aleutian Company produces two products, Rings and Dings. They are manufactured in two departments—Fabrication and assembly. Data for the products and departments are listed below.

All of the machine hours take place in the Fabrication Department, which has an estimated overhead of $80,300. All of the labor hours take place in the Assembly department, which has an estimated total overhead of $74,300.

The Aleutian Company uses departmental overhead rates. The Fabrication Department uses machine hours for an allocation base, and the Assembly Department uses labor hours.

What is the Assembly Department overhead rate per labor hour?

$3.07

$3.11

$3.29

$3.16

Q3:

The Aleutian Company produces two products, Rings and Dings. They are manufactured in two departments—Fabrication and Assembly. Data for the products and departments are listed below.

All of the machine hours take place in the Fabrication Department, which has an estimated overhead of $85,000. All of the labor hours take place in the Assembly Department, which has an estimated total overhead of $71,100.

The Aleutian Company uses departmental overhead rates. The Fabrication Department uses machine hours for an allocation base, and the Assembly Department uses labor hours.

What is the overhead cost per unit for Rings?

$33.60

$51.01

$59.96

$4.25

Q4:

The total factory overhead for Big Light Company is budgeted for the year at $948,660. Big Light manufactures two different products - night lights and desk lamps. Night lights is budgeted for 8,500 units. Each night light requires three hour of direct labor. Desk lamps is budgeted for 11,700 units. Each desk lamp requires two hours of direct labor.

a Determine the total number of budgeted direct labor hours for year.

b Determine the single plantwide factory overhead rate using direct labor hours as the allocation base. Round your answer to two decimal places, if necessary.
$

c Determine the factory overhead allocated per unit for each product using the single plantwide factory overhead rate calculated in (b). Round your answers to two decimal places, if necessary.

	Activity Cost		Activity Base
Procurement	$350,600						Number of purchase orders
Scheduling	$200,500						Number of production orders
Materials handling	$453,600						Number of moves
Product development	$702,000						Number of engineering changes
Production	$1,431,900						Machine hours
	Number of Purchase Orders	Number of Production Orders	Number of Moves	Number of Engineering Changes	Machine Hours	Number of Units
Disk drives	4,100			300				1,380			10				1,800			1,700
Tape drives	2,000			155				750			5				8,900			3,500
Wire drives	13,000			710				3,900			20				10,000			2,900

Solution

STATEMENT SHOWING ACTIVITY RATE OF ACTIVITY POOL Activity Total Expected Activity ACTIVITY COST POOL Measures Overheads Activity Rate Procurement Pur.order 350600 19100 18.36 Scheduling Prod Order 200,500 1,165 172.1 Material handling Moves 453,600 6,030 75.22 Pproduct Development Eng change 702,000 35 20057 Production MH 1,431,900 20,700 69.17 Activity cost per unit of Disk Drive unit: Procurement (4100*18.36) 75276 Scheduling (300*172.10) 51630 Material Handling (1380*75.22) 103803.6 Product Development (10*20057) 200570 Production (1800*69.17) 124506 Total Activity cost 555786 Divide: Number of units 1700 Activity cost per unit 326.93 Answer is $ 326.93