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    ABC Problems

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    xenon cloud
    The document provides overhead cost and activity data for a company that uses activity-based costing. It details 4 overhead items with their associated cost drivers and budgeted amounts. It also provides information on 3 jobs, including direct costs and activity levels. It asks to calculate the overhead allocated to Job 101 using ABC and the unit cost of Job 102 using ABC. The price of each Job 103 unit at 140% of cost is also requested.

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    ABC Problems

    Uploaded by

    xenon cloud
    531 views2 pages
    The document provides overhead cost and activity data for a company that uses activity-based costing. It details 4 overhead items with their associated cost drivers and budgeted amounts. It also provides information on 3 jobs, including direct costs and activity levels. It asks to calculate the overhead allocated to Job 101 using ABC and the unit cost of Job 102 using ABC. The price of each Job 103 unit at 140% of cost is also requested.

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    The document provides overhead cost and activity data for a company that uses activity-based costing. It details 4 overhead items with their associated cost drivers and budgeted amounts. It also provides information on 3 jobs, including direct costs and activity levels. It asks to calculate the overhead allocated to Job 101 using ABC and the unit cost of Job 102 using ABC. The price of each Job 103 unit at 140% of cost is also requested.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    531 views2 pages

    ABC Problems

    Uploaded by

    xenon cloud
    The document provides overhead cost and activity data for a company that uses activity-based costing. It details 4 overhead items with their associated cost drivers and budgeted amounts. It also provides information on 3 jobs, including direct costs and activity levels. It asks to calculate the overhead allocated to Job 101 using ABC and the unit cost of Job 102 using ABC. The price of each Job 103 unit at 140% of cost is also requested.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    A company has identified the following overhead costs and cost drivers for the coming year.

    Overhead Item Cost Driver Budgeted Cost Budgeted Activity Level


    Machine setup No. of setups $ 20,000 200
    Inspection No. of inspections $130,000 6,500
    Material handling No. of material moves $ 80,000 8,000
    Engineering Engineering hours $ 50,000 1,000
    $280,000
    The following information was collected on three jobs that were completed during the year:
    Job 101 Job 102 Job 103
    Direct materials $5,000 $12,000 $8,000
    Direct labor $2,000 $ 2,000 $4,000
    Units completed 100 50 200
    Number of setups 1 2 4
    Number of inspections 20 10 30
    Number of material moves 30 10 50
    Engineering hours 10 50 10
    Budgeted direct labor cost was $100,000, and budgeted direct material cost was $280,000.
    14. If the company uses activity-based costing, how much overhead cost should be allocable to Job 101?
    a. $1,300 b. $2,000 c. $5,000 d. $5,600
    15. If the company uses activity-based costing, compute the cost of each unit of Job 102.
    a. $340 b. $392 c. $440 d. $520
    16. The company prices its products at 140% of cost. If the company uses activity-based costing, the price
    of each unit of Job 103 would be
    a. $98 b. $100 c. $116 d. $140

    Scottso Enterprises incurs $300,000 in manufacturing overhead costs each month. The company has
    been allocating overhead to individual product lines based on direct labor hours
    Amount Amount of
    Cost driver In Pool Activity
    ----------- -------- ---------
    Direct labor hours $100,000 15,000
    Number of batches 150,000 200
    Design changes 50,000 125
    --------
    Total overhead costs $300,000
    ========
    Two products have the following characteristics:

    Product X Product Y
    --------- ---------
    Direct labor hours 1,000 400
    Number of batches 10 20
    Design changes 1 15

    a. Determine the overhead to be allocated to each product using direct labor hours as the only cost
    driver.
    b. Determine the overhead to be allocated to each product using the three drivers identified.
    Gilmore Company produces two products in a single factory. The following production and cost
    information has been determined:
    Model 1 Model 2
    Units produced 1,000 200
    Material moves (total) 100 40
    Testing time (total) 250 125
    Direct labor hours per unit 1 5
    The controller has determined total overhead to be P480,000. P140,000 relates to material moves;
    P150,000 relates to testing; the remainder is related to labor time.

    1. If Gilmore uses direct labor hours to allocate overhead to each model, what would overhead per
    unit be for each model?
    2. If Gilmore uses activity-based costing to allocate overhead to each model, what would overhead
    per unit be each model?

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