Lincoln products manufactures and distributes three types

Assignment Help Accounting Basics

Reference no: EM13581593

Lincoln Products manufactures and distributes three types of golf clubs: beginners, intermediate, and advanced. The materials used in these clubs increases in each level and allows for more precise balancing and longer wear. Production is highly automated for the beginners' clubs, whereas the intermediate and advanced clubs require a varying degree of labor, depending on the intricacy of the balancing process. Lincoln applies all indirect costs according to a predetermined rate based on direct labor hours. A consultant recently suggested that Lincoln switch to an activity-based costing system, and identified the following cost breakdown for the upcoming year:

Activity Recommended Cost Driver Costs Cost Driver
Order processing # of orders 52500 125 orders
product set up # of production runs 210000 75 runs
materials handling pounds of mat. used 375000 125000 lbs
machine depreciation and maint. machine hrs 322000 20000 hrs
quality control # of inspections 80000 40 inspect.
packing # of units 14000 280000 units

In addition, management estimates 50,000 direct labor hours will be used in the upcoming year at a rate of $14 per hour.
Assume that the following activity took place in the first month of the upcoming year:

Beginners Intermediate Advanced
Number of units produced 20000 8000 3000
Direct materials costs 20800 13000 8000
Direct Labor hrs. 500 1 2000
# of orders 6 4

Required:
(A) Compute the production costs for each product in the first month of the upcoming year using direct labor hours as the allocation base.
(B) Compute the production costs for each product in the first month of the upcoming year using machine hours as the allocation base.
(C) Compute the production costs for each product in the first month of the upcoming year using activity-based costing.

Reference no: EM13581593

Questions Cloud

U2022 a discussion of the economic factors that you believe : on january 1 2009 carlin corporation issued 2400000 of 5-year 8 bonds at 95 the bonds pay interest semiannually on july

Assume you are setting standard materials costs for a pizza : assume you are setting standard materials costs for a pizza restaurant.use the example of a medium sized cheese pizza.

Summit has learned that a competitor plans to introduce a : . susummit products inc. is interested in producing and selling an improved widget. market research indicates that

Even better produces gummy worms that it sells in pocket : problem 3 - even better produces gummy worms that it sells in pocket size boxes. it uses direct labor hours as the cost

Lincoln products manufactures and distributes three types : lincoln products manufactures and distributes three types of golf clubs beginners intermediate and advanced. the

Match each of the following perspectives of the balanced : marrs company is implementing a balanced scorecard approach to improve performance. match each of the following

Acme birds inc produces bird seeds all direct materials : acme birds inc. produces bird seeds. all direct materials used in the production process are added at the beginning of

On january 1 2012 durdil co borrowed and received 670000 : on january 1 2012 durdil co. borrowed and received 670000 from a major customer evidenced by a zero-interest-bearing

The merchant manufacturing co has two servicing departments : the merchant manufacturing co. has two servicing departments - purchasing and maintenance - and two production

User Account

All Pages