Reference no: EM13912064
Computing product costs in an ABC system
McKnight, Inc., manufactures bookcases and uses an activity-based costing system. McKnight's activity areas and related data follow:
Activity Budgeted Cost of Activity Allocation Base Predeterimined Overhead Allocation Rate
Materials Handling $240,000 Number of parts $1.00
Assembly $3,300,000 Direct labor hours $17.00
Finishing $150,000 Number of finished units $2.50
McKnight produced two styles of bookcases in April: the standard bookcase and an unfinished bookcase, which has fewer parts and requires no finishing. The totals for quantities, direct material cost, and other data follow:
Product Total Units Produced Total Direct Materials Cost Total Number of Parts Total Assembling Direct Labor Hours
Standard Bookcase 2,000 units $24,000(material) $30,000(labor) 8,000 parts 3,000 hours
Unfinished Bookcase 2,600 units $26,000(material) $26,000(labor) 7,800 parts 2,600 hours
Requirement
1. Compute the manufacturing product cost per unit of each type of bookcase.
2. Suppose that pre manufacturing activities, such as product design, were assigned to the standard bookcase at $4 each and to the unfinished bookcase at $3 each. Similar analyses were conducted of post manufacturing activities such as distribution, marketing, and customer service. The post manufacturing costs were $20 per standard bookcase and $15 per unfinished bookcase. Compute the full product costs per unit.
3. Which product costs are reported in the external financial statements? Which costs are used for management decision making? Explain the difference.
4. What price should McKnight's managers set for unfinished bookcaes to earn a net profit of $16 per bookcase?
|
Dell computer recognizes revenue at different times
: The following disclosure note appeared in a recent annual report to stockholders of Dell Inc., the computer manufacturer: "Net revenue includes sales of hardware, software and peripherals, and service.Briefly explain why Dell Computer recognizes reve..
|
|
How many perceived age estimates are twenty eight or less
: A frequency ogive of the perceived age estimates. How many perceived age estimates are 28 or less? What percentage of perceived age estimates are 22 or less?
|
|
Sample of aqueous chlorine bleach solution
: A sample of aqueous chlorine bleach solution was analyzed to contain 5.00% Cl(w/v) {or 5.00gcl per 100ml}. if the source if chlorine is calcium hypochlorite Ca(OC)2 (142.98), what is the % Ca(OCl)2 (w/v) in the bleach solution?
|
|
Prepare income statement, capital statement, balance sheet
: Cushing withdrew $2,000 cash from the business, and Tadlock withdrew $4,000 cash The net income was allocated to the capital accounts of the two partners in proportion to the amounts of their original investments in the business.
|
|
Computing product costs in an abc system
: Computing product costs in an ABC system. McKnight, Inc., manufactures bookcases and uses an activity-based costing system. McKnight's activity areas and related data follow.Compute the manufacturing product cost per unit of each type of bookcase.
|
|
How the population mean median and mode compare
: Explain how the population mean, median, and mode compare when the population's relative frequency curve is Symmetrical, Skewed with a tail to the left and Skewed with a tail to the right.
|
|
How a perfect forecast of shopping centre success changes
: Explain briefly how a perfect forecast of shopping centre success changes
|
|
How financial information meet both investor and stewardship
: Discuss the information needs of users in terms of the qualitative characteristics of financial information.
|
|
Calculate the present value
: Calculate the present value of the note receivable suing a 15 % interest rate
|