Determine the cost driver rate for each activity cost pool

Assignment Help Cost Accounting
Reference no: EM13538880

The cost accountant of ABC Manufacturing attended a workshop on activity-based costing and was impressed by the results. After consulting with the production personnel, he prepared the following information on cost drivers and the estimated volume for each driver.

Activity

Cost driver

Cost driver volume

Total

Machining


Ace

Best

Champ


Setup

Number of setups

125

75

50

250

Machining

Machine hours

2,500

1,500

2,000

6,000

Assembly






Assembly

Direct labor hours

25,000

15,000

5,000

45,000

Inspection

Number of inspections

50

25

25

100

The cost accountant also determined how much overhead costs were incurred in each of the four activities as follows:

Activity

Overhead costs

Machining


Setup

$150,000

Machining

750,000

Total Machining department overhead

$900,000

Assembly


Assembly

$360,000

Inspection

90,000

Total Assembly department overhead

$450,000

Total overhead costs

$1,350,000

Required:

a. Determine the cost driver rate for each activity cost pool.

b. Use the activity-based costing method to determine the unit cost for each product.

c. Summarize and comment the results.

Reference no: EM13538880

Questions Cloud

Prepare the direct material budget for next year : Prepare the direct material budget for next year -  Each electronic bicycle produced at East Mountain Bike requires two major parts
Calculate the acceleration of boxes and the tension in rod : A box of ant aunts m1 = 1.65kg and a box of ant uncles m2 = 3.30kg, slide down an inclined plane while attached by a massless rod parallel to the plane. The angle of the incline is zeta = 30 degree. The cefficient of the kinetic friction between the ..
Define the molar heat capacity for the liquid and vapor : How much energy (in kilojoules) is released when 22.5g of ethanol vapor at 97.0 Celsius is cooled to -10.0 Celsius? Ethanol has mp = -114.5 Celsius = 78.4 , = 38.56 and = 4.60 kJ/mol . The molar heat capacity is 113 J/(k.mol) for the liquid and 65..
What is the traction force exerted to the right on the leg : A setup similar to the one shown in the figure below is often used in hospitals to support and apply a horizontal traction force to an injured leg. (Let m = 6.05 kg and ? = 81.0°.) What is the traction force exerted to the right on the leg?
Determine the cost driver rate for each activity cost pool : Determine the cost driver rate for each activity cost pool and use the activity-based costing method to determine the unit cost for each product.
What is the power put into the system by gravity : A square loop with sides of 20 cm is falling through a magnetic field at v=5 m/s. The magnetic field is going into the page and is increasing as the loop falls farther through it. B = 3.0 T - 1.5 T * y. Also, the acceleration due to gravity is 9.8..
calculate their velocity after the collision : A 26.3 g mass is moving in the +x-direction at 48.8 cm/s while a 25.7 g mass is moving in the -x-direction at 62.8 cm/s. Find their velocity (in cm/s) after the collision
Determine the unit cost for each product : Determine the unit cost for each product. The allocation bases to choose from are Machine hours and direct labor costs.
Explain what ions are present in a solution of hcl : What ions are present in a solution of HCl. Theoretically, which of these ions will affect the equilibrium of Co Cl2, and what will its effect be

Reviews

Write a Review

Cost Accounting Questions & Answers

  Determine the cost behavior pattern of the overhead costs

The Ramon Company manufactures a wide range of products at several different plant locations. The Franklin plant, which manufactures electrical components, has been experiencing some difficulties with fluctuating monthly overhead costs.

  Compute the amount of materials purchased in 19b

A manufacturing company shows the following amounts in the income statement for 19B.

  Construct alphas cash budget and income statement

Construct Alpha's cash budget, income statement, balance sheet and statement of cash flow for April.

  Explain difference between a product cost and a period cost

Explain the difference between a Product cost and a Period cost. What potential problems does an inaccurate classification of product and period costs cause?

  Calculate the present value of the cca tax shield

Determine the appropriate discount rate to evaluate the project and calculate the present value of the CCA tax shield adjusted for the salvage value of the plant.

  The standard costs and actual costs for direct materials

the standard costs and actual costs for direct materials direct labor and factory overhead for the manufacture of 2500

  Calculate the cost per unit of february production

Calculate the cost per unit of February production of 4,260 toy flutes - calculate the ending inventory value of the toy flutes still in inventory at February 28.

  Calculating salvage value

Calculating Salvage Value. Consider an asset that costs $640,000 and is depreciated straight-line to zero over its eight-year tax life. The asset is to be used in a five-year project; at the end of the project, the asset can be sold for $175,000.

  Limitation of break-even analysis

Plot the date of your answer to above inthe form contribution sales graph known as profit volume graph. and to comment on the result shown and state the break- even point.

  What is each projects internal rate of return

What is each project's payback period - what is each projects net present value and what is each project's internal rate of return?

  When this transaction galaxy debit

An appraisal shows that the land's value is $400,000 and the building's value is $500,000. When recording this transaction Galaxy

  Statement that shows the cost of goods sold

Provide the equation for the straight line that represens these costs - prepare an income statement that shows the cost of goods sold.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd