Latting Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs).The company has two products,T73C and R28K,about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $1,526,700 and the company's estimated total direct labor-hours for the year is 30,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports.Data for this proposed activity-based costing system appear below: \[\begin{array} { l r r } & { \text { T73C } } & { \text { R28K } } \\ \text { Direct materials per unit ......... } & \$ 14.10 & \$ 43.40 \\ \text { Direct labor per unit.............. } & \$ 3.20 & \$ 25.60 \\ \text { Direct labor-hours per unit...... } & 0.20 & 1.60 \\ \text { Annual production.................. } & 30,000 & 15,000 \end{array}\] $\begin{array}{lc} \text { Activities and Activity Measures............. } & \text { Estimated Overhead Cost } \\ \text { Assembling products (DLHs)................ } & \$ 720,000 \\ \text { Preparing batches (batches)................. } & 362,700 \\ \text { Product support (product variations) ...... } & \underline{444,000} \\ \text { Total........................................................ } &\underline{ \$ 1,526,700} \end{array}$ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $$\underline{\text { Expected Activity}}$ $\begin{array}{lrrr} &\text { T73C } & \text { R28K } & \text { Total }\\ \text { DLHs.......................... } & 6,000 & 24,000 & 30,000 \\ \text { Batches.................. } & 1,380 & 1,410 & 2,790 \\ \text { Product variations ...... } & \mathbf{5 7 0} & \mathbf{5 4 0} & 1,110 \end{array}$ -The manufacturing overhead that would be applied to a unit of product T73C under the company's traditional costing system is closest to:

A) $18.38 B) $28.56 C) $10.18 D) $4.80 A) $18.38 B) $28.56 C) $10.18 D) $4.80 C

Solum Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs).The company has two products,V47Q and K41P,about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $2,449,440 and the company's estimated total direct labor-hours for the year is 54,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports.Data for this proposed activity-based costing system appear below: $\begin{array}{lrr} &\text { V47Q }&\text { K41P }\\ \text { Direct materials per unit .......... } & \$ 27.50& \$62.10 \\ \text { Direct labor per unit.............. } & \$ 15.60 & \$ 52.00 \\ \text { Direct labor-hours per unit...... } & 0.60 & 2.00 \\ \text { Annual production................... } & 40,000 & 15,000 \end{array}$ $\begin{array}{lc} \text { Activities and Activity Measures............. } & \text { Estimated Overhead Cost } \\ \text { Assembling products (DLHs). ................ } & \$918,000 \\ \text { Preparing batches (batches)................. } & 397,440\\ \text {Product support (product variations) .......... } & \underline{1,134,000} \\ \text { Total........................................................ } &\underline{ \$ 2,449,440} \end{array}$ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $$\underline{\text { Expected Activity}}$ $\begin{array}{lrrr} &\text { V47Q } & \text { K41P } & \text { Total }\\ \text { DLHs.......................... } & 24,000 & 30,000 & 54,000 \\ \text { Batches.................. } & 1,458 & 1,026 & 2,484 \\ \text { Product variations ...... } &2,592& 1,188 & 3,780 \end{array}$ -The unit product cost of product K41P under the activity-based costing system is closest to:

A) $204.82 B) $68.70 C) $182.80 D) $114.10 A) $204.82 B) $68.70 C) $182.80 D) $114.10

Latting Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs).The company has two products,T73C and R28K,about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $1,526,700 and the company's estimated total direct labor-hours for the year is 30,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports.Data for this proposed activity-based costing system appear below: \[\begin{array} { l r r } & { \text { T73C } } & { \text { R28K } } \\ \text { Direct materials per unit ......... } & \$ 14.10 & \$ 43.40 \\ \text { Direct labor per unit.............. } & \$ 3.20 & \$ 25.60 \\ \text { Direct labor-hours per unit...... } & 0.20 & 1.60 \\ \text { Annual production.................. } & 30,000 & 15,000 \end{array}\] $\begin{array}{lc} \text { Activities and Activity Measures............. } & \text { Estimated Overhead Cost } \\ \text { Assembling products (DLHs)................ } & \$ 720,000 \\ \text { Preparing batches (batches)................. } & 362,700 \\ \text { Product support (product variations) ...... } & \underline{444,000} \\ \text { Total........................................................ } &\underline{ \$ 1,526,700} \end{array}$ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $$\underline{\text { Expected Activity}}$ $\begin{array}{lrrr} &\text { T73C } & \text { R28K } & \text { Total }\\ \text { DLHs.......................... } & 6,000 & 24,000 & 30,000 \\ \text { Batches.................. } & 1,380 & 1,410 & 2,790 \\ \text { Product variations ...... } & \mathbf{5 7 0} & \mathbf{5 4 0} & 1,110 \end{array}$ -The manufacturing overhead that would be applied to a unit of product R28K under the activity-based costing system is closest to:

A) $81.42 B) $65.02 C) $146.44 D) $12.22 A) $81.42 B) $65.02 C) $146.44 D) $12.22

Shininger Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs).The company has two products,G27U and W21K,about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $985,440 and the company's estimated total direct labor-hours for the year is 24,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports.Data for this proposed activity-based costing system appear below: $\begin{array} { l r r } & \text { G27U } & \text { W21K } \\ \text { Direct materials per unit .......... } & \$ 24.50 & \$ 59.30 \\ \text { Direct labor per unit.............. } & \$ 5.00 & \$ 25.00 \\ \text { Direct labor-hours per unit...... } & 0.20 & 1.00 \\ \text { Annual production.................. } & \mathbf { 4 5 } , \mathbf { 0 0 0 } & \mathbf { 1 5 , 0 0 0 } \end{array}$ $\begin{array}{lc} \text { Activities and Activity Measures } & \text { Estimated Overhead Cost} \\ \text { Supporting direct labor (DLHs)......... } &\$384,000\\ \text {Setting up machines (setups)............. } &255,840\\ \text { Parts administration (part types)..... } &\underline{345,600}\\ \text {Total................................................. } &\underline{985,400}\\ \end{array}$ \[\begin{array} { l r r r } & {\quad \text { Expected Activity } } \\ & \text { G27U } & \text { W21K } & \text { Total } \\ \text { DLHs............ } & 9,000 & 15,000 & 24,000 \\ \text { Setups ........... } & 1,032 & 936 & 1,968 \\ \text { Part types...... } & 624 & 240 & 864 \end{array}\] -The manufacturing overhead that would be applied to a unit of product W21K under the activity-based costing system is closest to:

A) $71.57 B) $41.06 C) $8.11 D) $30.51 A) $71.57 B) $41.06 C) $8.11 D) $30.51

Kuechle Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs).The company has two products,I49L and B26W,about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $1,793,790 and the company's estimated total direct labor-hours for the year is 57,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports.Data for this proposed activity-based costing system appear below: \[\begin{array} { l r r } & \text { I49L } & \text { B26W } \\ \text { Direct materials per unit ......... } & \$ 17.80 & \$ 55.40 \\ \text { Direct labor per unit.............. } & \$ 16.10 & \$ 55.20 \\ \text { Direct labor-hours per unit..... } & 0.70 & 2.40 \\ \text { Annual production.................. } & 30,000 & 15,000 \end{array}\] Required: a.Determine the unit product cost of each of the company's two products under the traditional costing system. b.Determine the unit product cost of each of the company's two products under activity-based costing system. $\begin{array}{c} \begin{array}{lll} \text {Activities and Activity Measures..........}\\ \text {Supporting direct labor (DLHs)............}\\ \text {Setting up machines (setups)................}\\ \text {Parts administration (part types).........}\\ \text {Total....................................................} \end{array} \begin{array}{c} \text {Estimated Overhead Cost}\\ \$ 285,000 \\ 437,190 \\ \underline{1,071,600 }\\ \underline{\underline{ \$ 1,793,790}} \end{array} \end{array}$ \[\begin{array} { c r r r } \text { Activities } & { \text { I49L } } &{ \text { B26W } } & { \text { Total } } \\ \text { Supporting direct labor ...... } & 21,000 & 36,000 & \mathbf { 5 7 , 0 0 0 } \\ \text { Setting up machines........... } & 798 & \mathbf { 2 , 5 6 5 } & \mathbf { 3 , 3 6 3 } \\ \text { Parts administration......... } & 1,539 & \mathbf { 1 , 1 4 0 } & \mathbf { 2 , 6 7 9 } \end{array}\]

a.Traditional Unit Product Costs Predete

Bustle Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs).The company has two products,Z68W and K07E,about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $1,809,600 and the company's estimated total direct labor-hours for the year is 26,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports.Data for this proposed activity-based costing system appear below: $\begin{array}{lrr} &\text { Z68W }&\text { K07E }\\ \text { Direct materials per unit.......... } & \$ 14.90 & \$ 44.30 \\ \text { Direct labor per unit.............. } & \$ 4.20 & \$ 25.20 \\ \text { Direct labor-hours per unit...... } & 0.20 & 1.20 \\ \text { Annual production................. } & 40,000 & 15,000 \end{array}$ $\begin{array}{lc} \text {Activities and Activity Measures } &\text { Estimated Overhead Cost }\\ \text { Assembling products (DLHs)................. } &\$702,000\\ \text { Preparing batches (batches) ................. } &132,600\\ \text {Milling (MHs)........................................ } &\underline{975,000}\\ \text { Total.................................................... } &\underline{\underline{1,809,600}}\\ \text { } &\\ \end{array}$ $\begin{array}{c} \begin{array}{lll} \text {Activities}\\ \text {Assembling products....}\\ \text {Preparing batches.........}\\ \text {Milling.........................} \end{array} \begin{array}{lll} \text { Z68W}&\text { K07E }&\text {Total }\\ 8,000 & 18,000 & 26,000 \\ 884 & 442 & 1,326 \\ 702 & 1.248 & 1.950 \end{array} \end{array}$ Required: a.Determine the unit product cost of each of the company's two products under the traditional costing system. b.Determine the unit product cost of each of the company's two products under activity-based costing system.

a.Traditional Unit Product Costs Predete

Shininger Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs).The company has two products,G27U and W21K,about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $985,440 and the company's estimated total direct labor-hours for the year is 24,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports.Data for this proposed activity-based costing system appear below: $\begin{array} { l r r } & \text { G27U } & \text { W21K } \\ \text { Direct materials per unit .......... } & \$ 24.50 & \$ 59.30 \\ \text { Direct labor per unit.............. } & \$ 5.00 & \$ 25.00 \\ \text { Direct labor-hours per unit...... } & 0.20 & 1.00 \\ \text { Annual production.................. } & \mathbf { 4 5 } , \mathbf { 0 0 0 } & \mathbf { 1 5 , 0 0 0 } \end{array}$ $\begin{array}{lc} \text { Activities and Activity Measures } & \text { Estimated Overhead Cost} \\ \text { Supporting direct labor (DLHs)......... } &\$384,000\\ \text {Setting up machines (setups)............. } &255,840\\ \text { Parts administration (part types)..... } &\underline{345,600}\\ \text {Total................................................. } &\underline{985,400}\\ \end{array}$ \[\begin{array} { l r r r } & {\quad \text { Expected Activity } } \\ & \text { G27U } & \text { W21K } & \text { Total } \\ \text { DLHs............ } & 9,000 & 15,000 & 24,000 \\ \text { Setups ........... } & 1,032 & 936 & 1,968 \\ \text { Part types...... } & 624 & 240 & 864 \end{array}\] -The manufacturing overhead that would be applied to a unit of product G27U under the company's traditional costing system is closest to:

A) $8.21 B) $3.20 C) $11.73 D) $19.94 A) $8.21 B) $3.20 C) $11.73 D) $19.94

Scholes Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs).The company has two products,L45Y and F91I,about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $3,170,400 and the company's estimated total direct labor-hours for the year is 60,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports.Data for this proposed activity-based costing system appear below: $\begin{array}{lrr} &\text { L45Y }&\text { F91I }\\ \text { Direct materials per unit .......... } & \$ 14.20 & \$ 48.30 \\ \text { Direct labor per unit.............. } & \$ 16.80 & \$ 50.40 \\ \text { Direct labor-hours per unit...... } & 0.80 & 2.40 \\ \text { Annual production................... } & 45,000 & 10,000 \end{array}$ $\begin{array}{lc} \text { Activities and Activity Measures............. } & \text { Estimated Overhead Cost } \\ \text { Direct labor support (DLHs) ................ } & \$1,740,000 \\ \text { Setting up machines (setups)................. } & 422,400\\ \text { Part administration (part types) .......... } & \underline{1,008,00} \\ \text { Total........................................................ } &\underline{ \$ 3,170,400} \end{array}$ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $$\underline{\text { Expected Activity}}$ $\begin{array}{lrrr} &\text { L45Y } & \text { F91I } & \text { Total }\\ \text { DLHs.......................... } & 36,000 & 24,000 & 60,000 \\ \text { Batches.................. } & 1,140 & 1,500 & 2,640 \\ \text { Product variations ...... } &900& 2,460 & 3,360 \end{array}$ -The unit product cost of product L45Y under the company's traditional costing system is closest to:

A) $54.20 B) $73.27 C) $64.25 D) $31.00 A) $54.20 B) $73.27 C) $64.25 D) $31.00

Solum Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs).The company has two products,V47Q and K41P,about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $2,449,440 and the company's estimated total direct labor-hours for the year is 54,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports.Data for this proposed activity-based costing system appear below: $\begin{array}{lrr} &\text { V47Q }&\text { K41P }\\ \text { Direct materials per unit .......... } & \$ 27.50& \$62.10 \\ \text { Direct labor per unit.............. } & \$ 15.60 & \$ 52.00 \\ \text { Direct labor-hours per unit...... } & 0.60 & 2.00 \\ \text { Annual production................... } & 40,000 & 15,000 \end{array}$ $\begin{array}{lc} \text { Activities and Activity Measures............. } & \text { Estimated Overhead Cost } \\ \text { Assembling products (DLHs). ................ } & \$918,000 \\ \text { Preparing batches (batches)................. } & 397,440\\ \text {Product support (product variations) .......... } & \underline{1,134,000} \\ \text { Total........................................................ } &\underline{ \$ 2,449,440} \end{array}$ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $$\underline{\text { Expected Activity}}$ $\begin{array}{lrrr} &\text { V47Q } & \text { K41P } & \text { Total }\\ \text { DLHs.......................... } & 24,000 & 30,000 & 54,000 \\ \text { Batches.................. } & 1,458 & 1,026 & 2,484 \\ \text { Product variations ...... } &2,592& 1,188 & 3,780 \end{array}$ -The unit product cost of product V47Q under the company's traditional costing system is closest to:

A) $53.30 B) $70.32 C) $43.10 D) $78.57 A) $53.30 B) $70.32 C) $43.10 D) $78.57

Scholes Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs).The company has two products,L45Y and F91I,about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $3,170,400 and the company's estimated total direct labor-hours for the year is 60,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports.Data for this proposed activity-based costing system appear below: $\begin{array}{lrr} &\text { L45Y }&\text { F91I }\\ \text { Direct materials per unit .......... } & \$ 14.20 & \$ 48.30 \\ \text { Direct labor per unit.............. } & \$ 16.80 & \$ 50.40 \\ \text { Direct labor-hours per unit...... } & 0.80 & 2.40 \\ \text { Annual production................... } & 45,000 & 10,000 \end{array}$ $\begin{array}{lc} \text { Activities and Activity Measures............. } & \text { Estimated Overhead Cost } \\ \text { Direct labor support (DLHs) ................ } & \$1,740,000 \\ \text { Setting up machines (setups)................. } & 422,400\\ \text { Part administration (part types) .......... } & \underline{1,008,00} \\ \text { Total........................................................ } &\underline{ \$ 3,170,400} \end{array}$ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $$\underline{\text { Expected Activity}}$ $\begin{array}{lrrr} &\text { L45Y } & \text { F91I } & \text { Total }\\ \text { DLHs.......................... } & 36,000 & 24,000 & 60,000 \\ \text { Batches.................. } & 1,140 & 1,500 & 2,640 \\ \text { Product variations ...... } &900& 2,460 & 3,360 \end{array}$ -The unit product cost of product F91I under the activity-based costing system is closest to:

A) $266.10 B) $98.70 C) $167.40 D) $225.52 A) $266.10 B) $98.70 C) $167.40 D) $225.52

Exam 8: Use Activity-Based Costing Technique to Compute Product Costs for External Reports

Stoughton Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs).The company has two products,M31P and M07T,about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $2,675,460 and the company's estimated total direct labor-hours for the year is 51,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports.Data for this proposed activity-based costing system appear below: Required: a.Determine the manufacturing overhead cost per unit of each of the company's two products under the traditional costing system. b.Determine the manufacturing overhead cost per unit of each of the company's two products under activity-based costing system. Direct materials per unit......... Direct labor per unit............... Direct labor-hours per unit.... Annual production................ \ 27.50 \ 64.90 \ 7.80 \ 23.40 0.60 1.80 40,000 15,000 Activities and Activity Measures Estimated Overhead Cost Supporting direct labor (DLHs). \1 ,326,000 Setting up machines (setups) 456,960 Parts administration (part types) Total. M31P M07T Total Supporting direct labor ...... 24,000 27,000 51,000 Setting up machines .......... 2,346 510 2,856 Parts administration ......... 1,122 663 1,785

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Question 1

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a.Traditional Manufacturing Overhead Costs
Predetermined overhead rate = $2,675,460 $\div$ 51,000 DLHs = $52.46 per DLH
b.ABC Manufacturing Overhead Costs
Overhead cost for M31P
Overhead cost for M07T
$\begin{array}{c}\begin{array}{lll}\\\text {Direct labor-hours...................................}\\\text {Predetermined overhead rate per DLH...}\\\text {Manufacturing overhead cost per unit....}\end{array}\begin{array}{lll}\mathrm{M31P} & \mathrm{M} 07 \mathrm{~T} \\0.60 & 1.80 \\\$ 52.46 & \$ 52.46 \\\$ 31.48 & \$ 94.43\end{array}\end{array}$
$\begin{array} { l r r r } & \begin{array} { c } \text { Estimated } \\\text { Overhead }\end{array} & \text { Total Expected } & \\& \text { Cost } & \text { Activity } & \text { Activity Rate } \\\text { Supporting direct labor.......... } & \$ 1,326,000 & \mathbf { 5 1 , 0 0 0 } \text { DLHs } & \$ 26 \text { per DLH } \\\text { Setting up machines ............. } & \$ 456,960 & \mathbf { 2 , 8 5 6 } \text { setups } & \$ 160 \text { per setup } \\\text { Parts administration ............. } & \$ 892,500 & \mathbf { 1 , 7 8 5 } \text { part types } & \$ 500 \text { per part type }\end{array}$ $\begin{array}{lrrr}&\text { Activity Rate } & \text { Activity } &\text { ABC Cost }\\\text { Supporting direct labor ...... } & \$ 26\text { per DLH } &24,000 \text { DLHs } & \$624,000 \\\text { Setting up machines........... } & \$ 160 \text { per setup } &2,346\text { setups } &375,360 \\\text { Parts administration.......... } & \$ 500 \text { per part type } & 1,122 \text { part types } & \underline{561,600}\\\text{Total.................................}&&&\underline{\underline{\$1,560,360}}\\\text { Annual production .................................. } &&& 40,000 \\\text { Manufacturing overhead cost per unit ...... } &&& \$ 39.01\end{array}$ $\begin{array}{lrrr}&\text { Activity Rate } & \text { Activity } &\text { ABC Cost }\\\text { Supporting direct labor ...... } & \$ 26\text { per DLH } &27,000 \text { DLHs } & \$702,000 \\\text { Setting up machines........... } & \$ 160 \text { per setup } &510\text { setups } &81,600 \\\text { Parts administration.......... } & \$ 500 \text { per part type } &663 \text { part types } & \underline{331,500}\\\text{Total.................................}&&&\underline{\underline{\$1,115,100}}\\\text { Annual production .................................. } &&& 15,000 \\\text { Manufacturing overhead cost per unit ...... } &&& \$74.34\end{array}$

The predetermined overhead rate (i.e. ,activity rate)for Activity 2 under the activity-based costing system is closest to:

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Question 2

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A

Latting Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs).The company has two products,T73C and R28K,about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $1,526,700 and the company's estimated total direct labor-hours for the year is 30,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports.Data for this proposed activity-based costing system appear below: T73C R28K Direct materials per unit ......... \ 14.10 \ 43.40 Direct labor per unit.............. \ 3.20 \ 25.60 Direct labor-hours per unit...... 0.20 1.60 Annual production.................. 30,000 15,000 Activities and Activity Measures............. Estimated Overhead Cost Assembling products (DLHs)................ \ 720,000 Preparing batches (batches)................. 362,700 Product support (product variations) ...... Total........................................................ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\underline{\text { Expected Activity}}$ T73C R28K Total DLHs.......................... 6,000 24,000 30,000 Batches.................. 1,380 1,410 2,790 Product variations ...... 1,110 -The manufacturing overhead that would be applied to a unit of product T73C under the company's traditional costing system is closest to:

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Question 3

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C

The predetermined overhead rate under the traditional costing system is closest to:

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Question 4

Solum Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs).The company has two products,V47Q and K41P,about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $2,449,440 and the company's estimated total direct labor-hours for the year is 54,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports.Data for this proposed activity-based costing system appear below: V47Q K41P Direct materials per unit .......... \ 27.50 \6 2.10 Direct labor per unit.............. \ 15.60 \ 52.00 Direct labor-hours per unit...... 0.60 2.00 Annual production................... 40,000 15,000 Activities and Activity Measures............. Estimated Overhead Cost Assembling products (DLHs). ................ \9 18,000 Preparing batches (batches)................. 397,440 Product support (product variations) .......... Total........................................................ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\underline{\text { Expected Activity}}$ V47Q K41P Total DLHs.......................... 24,000 30,000 54,000 Batches.................. 1,458 1,026 2,484 Product variations ...... 2,592 1,188 3,780 -The unit product cost of product K41P under the activity-based costing system is closest to:

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Question 5

The overhead cost per unit of Product B under the traditional costing system is closest to:

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Question 6

Latting Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs).The company has two products,T73C and R28K,about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $1,526,700 and the company's estimated total direct labor-hours for the year is 30,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports.Data for this proposed activity-based costing system appear below: T73C R28K Direct materials per unit ......... \ 14.10 \ 43.40 Direct labor per unit.............. \ 3.20 \ 25.60 Direct labor-hours per unit...... 0.20 1.60 Annual production.................. 30,000 15,000 Activities and Activity Measures............. Estimated Overhead Cost Assembling products (DLHs)................ \ 720,000 Preparing batches (batches)................. 362,700 Product support (product variations) ...... Total........................................................ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\underline{\text { Expected Activity}}$ T73C R28K Total DLHs.......................... 6,000 24,000 30,000 Batches.................. 1,380 1,410 2,790 Product variations ...... 1,110 -The manufacturing overhead that would be applied to a unit of product R28K under the activity-based costing system is closest to:

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Question 7

Shininger Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs).The company has two products,G27U and W21K,about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $985,440 and the company's estimated total direct labor-hours for the year is 24,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports.Data for this proposed activity-based costing system appear below: G27U W21K Direct materials per unit .......... \ 24.50 \ 59.30 Direct labor per unit.............. \ 5.00 \ 25.00 Direct labor-hours per unit...... 0.20 1.00 Annual production.................. , Activities and Activity Measures Estimated Overhead Cost Supporting direct labor (DLHs)......... \3 84,000 Setting up machines (setups)............. 255,840 Parts administration (part types)..... Total................................................. Expected Activity G27U W21K Total DLHs............ 9,000 15,000 24,000 Setups ........... 1,032 936 1,968 Part types...... 624 240 864 -The manufacturing overhead that would be applied to a unit of product W21K under the activity-based costing system is closest to:

(Multiple Choice)

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Question 8

Kuechle Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs).The company has two products,I49L and B26W,about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $1,793,790 and the company's estimated total direct labor-hours for the year is 57,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports.Data for this proposed activity-based costing system appear below: I49L B26W Direct materials per unit ......... \ 17.80 \ 55.40 Direct labor per unit.............. \ 16.10 \ 55.20 Direct labor-hours per unit..... 0.70 2.40 Annual production.................. 30,000 15,000 Required: a.Determine the unit product cost of each of the company's two products under the traditional costing system. b.Determine the unit product cost of each of the company's two products under activity-based costing system. Activities and Activity Measures.......... Supporting direct labor (DLHs)............ Setting up machines (setups)................ Parts administration (part types)......... Total.................................................... Estimated Overhead Cost \ 285,000 437,190 Activities I49L B26W Total Supporting direct labor ...... 21,000 36,000 Setting up machines........... 798 Parts administration......... 1,539

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Question 9

Bustle Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs).The company has two products,Z68W and K07E,about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $1,809,600 and the company's estimated total direct labor-hours for the year is 26,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports.Data for this proposed activity-based costing system appear below: Z68W K07E Direct materials per unit.......... \ 14.90 \ 44.30 Direct labor per unit.............. \ 4.20 \ 25.20 Direct labor-hours per unit...... 0.20 1.20 Annual production................. 40,000 15,000 Activities and Activity Measures Estimated Overhead Cost Assembling products (DLHs)................. \7 02,000 Preparing batches (batches) ................. 132,600 Milling (MHs)........................................ Total.................................................... Activities Assembling products.... Preparing batches......... Milling......................... Z68W K07E Total 8,000 18,000 26,000 884 442 1,326 702 1.248 1.950 Required: a.Determine the unit product cost of each of the company's two products under the traditional costing system. b.Determine the unit product cost of each of the company's two products under activity-based costing system.

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Question 10

Shininger Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs).The company has two products,G27U and W21K,about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $985,440 and the company's estimated total direct labor-hours for the year is 24,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports.Data for this proposed activity-based costing system appear below: G27U W21K Direct materials per unit .......... \ 24.50 \ 59.30 Direct labor per unit.............. \ 5.00 \ 25.00 Direct labor-hours per unit...... 0.20 1.00 Annual production.................. , Activities and Activity Measures Estimated Overhead Cost Supporting direct labor (DLHs)......... \3 84,000 Setting up machines (setups)............. 255,840 Parts administration (part types)..... Total................................................. Expected Activity G27U W21K Total DLHs............ 9,000 15,000 24,000 Setups ........... 1,032 936 1,968 Part types...... 624 240 864 -The manufacturing overhead that would be applied to a unit of product G27U under the company's traditional costing system is closest to:

(Multiple Choice)

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Question 11

Scholes Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs).The company has two products,L45Y and F91I,about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $3,170,400 and the company's estimated total direct labor-hours for the year is 60,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports.Data for this proposed activity-based costing system appear below: L45Y F91I Direct materials per unit .......... \ 14.20 \ 48.30 Direct labor per unit.............. \ 16.80 \ 50.40 Direct labor-hours per unit...... 0.80 2.40 Annual production................... 45,000 10,000 Activities and Activity Measures............. Estimated Overhead Cost Direct labor support (DLHs) ................ \1 ,740,000 Setting up machines (setups)................. 422,400 Part administration (part types) .......... Total........................................................ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\underline{\text { Expected Activity}}$ L45Y F91I Total DLHs.......................... 36,000 24,000 60,000 Batches.................. 1,140 1,500 2,640 Product variations ...... 900 2,460 3,360 -The unit product cost of product L45Y under the company's traditional costing system is closest to:

(Multiple Choice)

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Question 12

The overhead cost per unit of Product B under the activity-based costing system is closest to:

(Multiple Choice)

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Question 13

Solum Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs).The company has two products,V47Q and K41P,about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $2,449,440 and the company's estimated total direct labor-hours for the year is 54,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports.Data for this proposed activity-based costing system appear below: V47Q K41P Direct materials per unit .......... \ 27.50 \6 2.10 Direct labor per unit.............. \ 15.60 \ 52.00 Direct labor-hours per unit...... 0.60 2.00 Annual production................... 40,000 15,000 Activities and Activity Measures............. Estimated Overhead Cost Assembling products (DLHs). ................ \9 18,000 Preparing batches (batches)................. 397,440 Product support (product variations) .......... Total........................................................ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\underline{\text { Expected Activity}}$ V47Q K41P Total DLHs.......................... 24,000 30,000 54,000 Batches.................. 1,458 1,026 2,484 Product variations ...... 2,592 1,188 3,780 -The unit product cost of product V47Q under the company's traditional costing system is closest to:

(Multiple Choice)

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Question 14

Wetz Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs).The company has two products,Q30V and S33B,about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $1,527,600 and the company's estimated total direct labor-hours for the year is 38,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports.Data for this proposed activity-based costing system appear below: Required: a.Determine the manufacturing overhead cost per unit of each of the company's two products under the traditional costing system. b.Determine the manufacturing overhead cost per unit of each of the company's two products under activity-based costing system. Q30V S33B Direct materials per unit.......... \ 34.10 \ 52.70 Direct labor per unit .............. \ 16.10 \ 39.10 Direct labor-hours per unit....... 0.70 1.70 Annual production .................. 30,000 10,000 Activities and Activity Measures..... Estimated Overhead Cost Assembling products (DLHs)........... \6 08,000 Preparing batches (batches)............ 197,000 Axial milling (MHs)........................ Total.............................................. Assembling products..... Preparing batches........ Axial milling................. Q30V S33B Total 21,000 17,000 38,000 456 1,520 1,976 570 874 1,444

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Question 15

Scholes Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs).The company has two products,L45Y and F91I,about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $3,170,400 and the company's estimated total direct labor-hours for the year is 60,000. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports.Data for this proposed activity-based costing system appear below: L45Y F91I Direct materials per unit .......... \ 14.20 \ 48.30 Direct labor per unit.............. \ 16.80 \ 50.40 Direct labor-hours per unit...... 0.80 2.40 Annual production................... 45,000 10,000 Activities and Activity Measures............. Estimated Overhead Cost Direct labor support (DLHs) ................ \1 ,740,000 Setting up machines (setups)................. 422,400 Part administration (part types) .......... Total........................................................ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\underline{\text { Expected Activity}}$ L45Y F91I Total DLHs.......................... 36,000 24,000 60,000 Batches.................. 1,140 1,500 2,640 Product variations ...... 900 2,460 3,360 -The unit product cost of product F91I under the activity-based costing system is closest to:

(Multiple Choice)

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Question 16

The predetermined overhead rate (i.e. ,activity rate)for Activity 2 under the activity-based costing system is closest to:

The predetermined overhead rate under the traditional costing system is closest to:

The overhead cost per unit of Product B under the traditional costing system is closest to:

The overhead cost per unit of Product B under the activity-based costing system is closest to:

Absorption Costing and Variable Costing

Statement of Cash Flows

Further Classification of Labor Costs

Cost of Quality

Least-Squares Regression Computations

Absorption Costing and Variable Costing

Abc Action Analysis

Fifo Method

Compute and Interpret the Fixed Overhead Variances

Journal Entries to Record Variances

Transfer Pricing

The Concept of Present Value

Income Taxes in Capital Budgeting Decisions

Pricing Products and Services

Profitability Analysis

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