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    Home Work ABC

    Uploaded by

    Liam
    The document contains three problems related to activity-based costing (ABC). The first problem provides overhead cost pool data for a law firm and calculates the total overhead applied. The second problem compares traditional costing to ABC for a manufacturer of dining chairs and tables. The third problem calculates overhead and product costs per unit for two television models using plantwide rates versus ABC.

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    Home Work ABC

    Uploaded by

    Liam
    15 views2 pages
    The document contains three problems related to activity-based costing (ABC). The first problem provides overhead cost pool data for a law firm and calculates the total overhead applied. The second problem compares traditional costing to ABC for a manufacturer of dining chairs and tables. The third problem calculates overhead and product costs per unit for two television models using plantwide rates versus ABC.

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    The document contains three problems related to activity-based costing (ABC). The first problem provides overhead cost pool data for a law firm and calculates the total overhead applied. The second problem compares traditional costing to ABC for a manufacturer of dining chairs and tables. The third problem calculates overhead and product costs per unit for two television models using plantwide rates versus ABC.

    Copyright:

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

    Home Work ABC

    Uploaded by

    Liam
    The document contains three problems related to activity-based costing (ABC). The first problem provides overhead cost pool data for a law firm and calculates the total overhead applied. The second problem compares traditional costing to ABC for a manufacturer of dining chairs and tables. The third problem calculates overhead and product costs per unit for two television models using plantwide rates versus ABC.

    Copyright:

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

    HOME WORK ABC

    SOAL 1
    Horton, Reiser, and Associates, a law firm, employs ABC. The following Estimated data for
    each of the activity cost pools is provided for 2022:

    Estimated Estimated Use of


    Activity Cost Pools Overhead Cost Drivers per Activity
    Researching legal issues $ 31,500 900 research hours
    Preparing legal documents 480,000 30,000 pages
    Meeting with clients 1,760,000 8,800 professional hours

    During 2022, the firm worked 660 research hours, 10,000 professional hours, and prepared
    25,000 document pages.
    Instructions
    Compute the total overhead applied during the year 2022.

    SOAL 2
    Hayward Industries manufactures dining chairs and tables. The following information is
    available regarding the two products and their estimated use of cost drivers:

    Dining Chairs Tables Estimated Cost


    Machine setups 200 600 $48,000
    Inspections 250 470 $72,000
    Labor hours 2,600 2,400

    Hayward is considering switching from one overhead rate based on labor hours to ABC.
    Instructions
    Perform the following analyses for these two components of overhead:

    1
    a. Compute total machine setups and inspection costs assigned to each product, using a single
    overhead rate.
    b. Compute total machine setups and inspection costs assigned to each product, using activity-
    based costing.
    c. Comment on your findings.

    SOAL 3
    Jack and Sammy Company produces television (model A and model B). Both products pass
    through two producing departments. Model A’s production is much more labor intensive than
    that of Model B. Model B is also more popular of the two televisions. The foolowing data have
    been gathered for the two products :
    Description Product Data
    Model A Model B
    Units produced per year 25,000 250,000
    Prime cost $ 375,000 $ 3,750,000
    Direct Labor hours 350,000 750,000
    Machine hours 50,000 500,000
    Production runs 100 150
    Inspection hours 2,000 3,000
    Maintenance hours 25,000 225,000
    Overhead costs:
    - Setup costs $675,000
    - Inspection costs 525,000
    - Machining 600,000
    - Maintenance 675,000
    Total 2,475,000

    Required :
    1. Compute the overhead cost per unit for each product by using a plantwide rate based on
    direct labor hours.
    2. Calculate activity rate.
    3. Compute the overhead cost per unit for each product by using ABC.
    4. Calculate the product cost per unit for Model A and Model B by using ABC.

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