Reference no: EM132501196
Comparing ABC and Plantwide Overhead Cost Assignments Wellington Chocolate Company uses activity-based costing (ABC). The controller identified two activities and their budgeted costs:
Setting up equipment$440,000O
ther overheard$1,320,000
- Setting up equipment is based on setup hours, and other overhead is based on oven hours.
Wellington produces two products, Fudge and Cookies. Information on each product is as follows:
Fudge Cookies
Units produced 8,000 445,000
Setup hours 8,800 2,200
Oven hours 1,000 7,000
Required:
Round your answers to the nearest whole dollar, unless otherwise directed.
Question 1. Calculate the activity rate for (a) setting up equipment and (b) other overhead.
a. Setting up equipment$ per setup hourb. Other overhead$ per oven hour
Question 2. How much total overhead is assigned to Fudge using ABC?
Question 3. What is the unit overhead assigned to Fudge using ABC? Round to the nearest cent.
Question 4. Now, ignoring the ABC results, calculate the plantwide overhead rate, based on oven hours. Round to the nearest cent.
Question 5. How much total overhead is assigned to Fudge using the plantwide overhead rate?
Question 6a. The difference in the total overhead assigned to Fudge is different under the ABC system and non-ABC system because
Question 6b. What is the difference in total overhead assigned to fudge under the two methods?
Assign costs to customers by using an abc approach
: Assign costs to customers by using an ABC approach. Round your answers and all intermediate calculations to the nearest dollar.
|
What is the maximum amount of money
: If a single bank faces a requires reserve ratio of 20 percent, has total reserves of $500,000, and checkable deposit liabilities of $400,000
|
Find what is the income from operations
: If the contribution margin ratio for Martinez Company is 41%, sales were $559,000, and fixed costs were $174,180, what is the income from operations?
|
Impact on interest rates of the baby boomers retiring
: Apply the theory of supply and demand to financial markets to predict the likely impact on interest rates of the Baby Boomers retiring.
|
What is the difference in total overhead assigned to fudge
: What is the difference in total overhead assigned to fudge under the two methods? How much total overhead is assigned to Fudge
|
Regional tourism and hospitality promotion organization
: As the manager of reputable resort hotel, what arguments would you use with your board of directors to obtain financial support for your local and regional tour
|
Downswing of a business cycle
: In light of the Covid 19 Pandemic, can fiscal policy be implemented if an economy is in the downswing of a business cycle? Please apply the two main tools of fi
|
Broader measurement of unemployment
: Explain why the broader measurement of unemployment (U6) is rising faster than the standard measurement (U3)
|
What are the six primary functions of the central bank
: Problem: What are the six primary functions of the central bank? Describe each.
|