An asterisk (*) will appear to the right of an incorrect entry. The essay answer will not be graded.
a.
Direct Labor Total Labor
Volume Hours per Unit = Hours
Pitsons =
Valves =
Cams =
Total estimated direct labor hours
Budgeted Factory Overhead / Plantwide Allocation Base = Plantwide Overhead Rate
dlh per dlh
b. Direct Factory OH Estimated Direct Labor
Labor Hours Plantwide Cost per Direct Labor Cost per
per Unit Rate Unit Rate Unit
Pistons
Valves
Cams
c.
Pistons Valves Cams
Revenues (price units)
Direct materials (direct materials cost units)
Direct labor [cost per unit (b) units]
Factory overhead [cost per unit (b) units]
Total costs
For the Year Ended December 31, 2016
ORANGE COUNTY ENGINE PARTS INC.
Product Line Budgeted Gross Profit Reports
Exercise 26(11)-4
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Section:
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Gross profit
5.
[Key essay answer here]
An asterisk (*) will appear to the right of an incorrect entry. The essay answer will not be graded.
a.
Direct Labor Total Labor
Volume Hours per Unit = Hours
Pitsons 7,200 0.20 =1,440
Valves 28,800 0.15 =4,320
b. Direct Factory OH Estimated Direct Labor
Labor Hours Plantwide Cost per Direct Labor Cost per
per Unit Rate Unit Rate Unit
Pistons 0.20 $30.00 6.00$ $20.00 4.00$
c.
Pistons Valves Cams
Revenues (price units) 360,000$ 288,000$ 84,000$
Direct materials (direct materials cost units) 180,000$ 115,200$ 34,800$
Direct labor [cost per unit (b) units] 28,800 86,400 7,680
Exercise 26(11)-4
Name:
Solution
Section:
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Product Line Budgeted Gross Profit Reports
For the Year Ended December 31, 2016
Score:
Instructions
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ON
ORANGE COUNTY ENGINE PARTS INC.
Gross profit 108,000$ (43,200)$ 30,000$
d.
Valves have the lowest (and negative) gross profit as a percent of sales. Valves may require a higher price or lower cost to
An asterisk (*) will appear to the right of an incorrect entry.
a.
Production department factory overhead rates:
Pattern Cut and Sew
Department Department
Factory overhead
Direct labor hours
Production department rate
/dlh /dlh
b.
Direct Labor Production Factory
Hours per Unit
Department Rate
= Overhead
Small Glove:
Pattern Department /dlh =
Cut and Sew Department /dlh =
Total factory overhead per unit
Medium Glove:
Pattern Department /dlh =
Cut and Sew Department /dlh =
Total factory overhead per unit
Large Glove:
Pattern Department /dlh =
Cut and Sew Department /dlh =
Total factory overhead per unit
0%
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Exercise 26(11)-5
Name:
Section:
An asterisk (*) will appear to the right of an incorrect entry.
a.
Production department factory overhead rates:
Pattern Cut and Sew
Department Department
Factory overhead $288,000 $412,500
b.
Direct Labor Production Factory
Hours per Unit
Department Rate
= Overhead
Small Glove:
Pattern Department 0.10 $100 /dlh = 10.00$
Cut and Sew Department 0.12 $125 /dlh = 15.00
Total factory overhead per unit 25.00$
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ON
Exercise 26(11)-5
Name:
Solution
Section:
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Activity Activity Activity Activity
Activity
Activity Base Usage Rate =Cost Activity Base Usage Rate =Cost
Fabrication mh mh
Assembly dlh dlh
Setup setups setups
Inspecting insp. insp.
Production scheduling prod. orders prod. orders
Purchasing purch. ord. purch. ord.
Total activity cost
Number of units
Activity cost per unit
Exercise 26(11)-10
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Section:
[Key code here]
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Elliptical Machines
Treadmill
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Activity Activity Activity Activity
Activity Activity Base Usage Rate =Cost Activity Base Usage Rate =Cost
Fabrication 800 mh $30 24,000$ 500 mh $30 15,000$
Assembly 210 dlh $15 3,150 90 dlh $15 1,350
Setup 24 setups $50 1,200 10 setups $50 500
Elliptical Machines
Treadmill
ON
Exercise 26(11)-10
Name:
Solution
Section:
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An asterisk (*) will appear to the right of an incorrect entry.
a.
Budgeted
Activity Activity Cost =
Casting mh /mh
Assembly dlh /dlh
Inspecting insp. /insp.
Setup setups /setup
Materials handling loads /load
b.
Activity Activity Activity Activity
Activity
Activity Base Usage Rate =Cost Activity Base Usage Rate =Cost
Casting mh mh
Assembly dlh dlh
Inspecting insp. insp.
Setup setups setups
Materials handling loads loads
Total activity cost
Number of units
Activity cost per unit
Entry Lighting Fixtures
Dining Room Lighting Fixtures
[Key code here]
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Total Activity Base
Activity Rate
Score:
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Exercise 26(11)-11
Name:
Section:
0%
An asterisk (*) will appear to the right of an incorrect entry.
a.
Budgeted
Activity Activity Cost =
Casting 127,750$ 3,650 mh $35 /mh
Assembly 63,200 3,160 dlh $20 /dlh
b.
Activity Activity Activity Activity
Activity Activity Base Usage Rate =Cost Activity Base Usage Rate =Cost
Casting 2,500 mh $35 87,500$ 1,150 mh $35 40,250$
Assembly 960 dlh $20 19,200 2,200 dlh $20 44,000
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Entry Lighting Fixtures
Dining Room Lighting Fixtures
Exercise 26(11)-11
Name:
Solution
Section:
Total Activity Base
Activity Rate
ON
An asterisk (*) will appear to the right of an incorrect entry.
a.
Factory
Activity Overhead =
Procurement
purch. ords.
/purch. ord.
Scheduling prod. ords. /prod. ord.
Materials handling moves /move
Product development ECOs /ECO
b.
Activity Activity Activity Activity
Activity
Activity Base Usage Rate =Cost Activity Base Usage Rate =Cost
Procurement purch. ords. purch. ords.
Scheduling prod. ords. prod. ords.
Materials handling moves moves
Product development ECOs ECOs
Total
Number of units
Activity cost per unit
Score:
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Instructions
Exercise 26(11)-12
Name:
Section:
0%
Ovens
Refrigerators
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Total Activity Base
Activity Rate
An asterisk (*) will appear to the right of an incorrect entry.
a.
Factory
Activity Overhead =
Procurement 66,000$ 660
purch. ords.
$100
/purch. ord.
Scheduling 4,120 206 prod. ords. $20 /prod. ord.
b.
Activity Activity Activity Activity
Activity Activity Base Usage Rate =Cost Activity Base Usage Rate =Cost
Procurement 400 purch. ords. $100 40,000$ 260 purch. ords. $100 26,000$
Scheduling 136 prod. ords. $20 2,720 70 prod. ords. $20 1,400
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Total Activity Base
Activity Rate
Ovens
Refrigerators
Exercise 26(11)-12
Name:
Solution
Section:
ON
An asterisk (*) will appear to the right of an incorrect entry. The essay answer will not be graded.
a.
Indirect Labor / Plantwide Allocation Base = Single Plantwide Rate
dlh per dlh
Direct Indirect Indirect
Labor Plantwide Labor Labor Cost
Hours Rate =Cost Units =per Unit
Cell phones
Tablets
b.
Activity-based rates: Production
Setup Support
Budgeted activity cost
Activity base setups dlh
Activity rate /setup /dlh
c.
Activity-Base Activity Activity Activity-Base Activity Activity
Activity Usage Rate Cost Usage Rate Cost
Setup setups /setup setups /setup
Prod. support dlh /dlh dlh /dlh
Total
Units
Activity cost per unit
d.
Cell Phones
[Key essay answer here]
Tablets
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Exercise 26(11)-13
Name:
Section:
Key Code:
Instructions
An asterisk (*) will appear to the right of an incorrect entry. The essay answer will not be graded.
a.
Indirect Labor / Plantwide Allocation Base = Single Plantwide Rate
375,000$ 3,750 dlh per dlh
Direct Indirect Indirect
Labor Plantwide Labor Labor Cost
Hours Rate =Cost Units =per Unit
Cell phones 1,875 $100.00 $187,500 93,750 $2.00
b.
Activity-based rates: Production
Setup Support
Budgeted activity cost 150,000$ 225,000$
c.
Activity-Base Activity Activity Activity-Base Activity Activity
Activity Usage Rate Cost Usage Rate Cost
Setup 600 setups $75.00 /setup 45,000$ 1,400 setups $75.00 /setup 105,000$
d.
Tablets
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ON
The per-unit indirect labor costs in (a) are distorted because setup activity is consumed by the products in a different ratio from
the direct labor. Cell phones required 600 setups over a volume of 93,750 units (or 156 units per production run), while tablets
required 1,400 setups over the same volume (approximately 67 units per production run). The activity-based costing method
equal. Again, this is clearly a distortion since the setup activity (40% of the indirect labor) is not consumed equally by each
Exercise 26(11)-13
Name:
Solution
Section:
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$100.00
Cell Phones