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An asterisk (*) will appear to the right of an incorrect entry.
a.
Production department factory overhead rates:
Assembly Test and Pack
Department Department
Factory overhead
Direct labor hours
Production department factory overhead rate /dlh /dlh
b.
Allocation-Base Activity Activity Allocation-Base Activity Activity
Activity Usage Rate Cost Usage Rate Cost
Assembly dlh /dlh dlh /dlh
Test and Pack dlh /dlh dlh /dlh
Total
Units
Factory overhead cost per unit
Blender
Score:
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Instructions
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Exercise 26(11)-14
Name:
Section:
Toaster Oven
0%
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An asterisk (*) will appear to the right of an incorrect entry.
a.
Production department factory overhead rates:
Assembly Test and Pack
Department Department
Factory overhead 186,000$ 120,000$
b.
Allocation-Base Activity Activity Allocation-Base Activity Activity
Activity Usage Rate Cost Usage Rate Cost
Assembly 750 dlh $62 /dlh 46,500$ 2,250 dlh $62 /dlh 139,500$
Test and Pack 2,250 dlh $40 /dlh 90,000 750 dlh $40 /dlh 30,000
Toaster Oven
Score:
Instructions
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ON
Key Code:
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Exercise 26(11)-14
Name:
Solution
Section:
Blender
An asterisk (*) will appear to the right of an incorrect entry.
a.
Activity rates:
Assembly Test and Pack Setup
Activity Activity Activity
Budgeted activity cost
Activity base dlh dlh setups
Activity rate /dlh /dlh /setup
b.
Allocation-Base Activity Activity Allocation-Base Activity Activity
Activity Usage Rate Cost Usage Rate Cost
Assembly dlh /dlh dlh /dlh
Test and pack dlh /dlh dlh /dlh
Setup setups /setup setups /setup
Total
Units
Factory overhead cost per unit
Blender
Score:
Key Code:
Instructions
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Exercise 26(11)-15
Name:
Section:
Toaster Oven
0%
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An asterisk (*) will appear to the right of an incorrect entry.
a.
Activity rates:
Assembly Test and Pack Setup
Activity Activity Activity
Budgeted activity cost 105,000$ 39,000$ 162,000$
Score:
Instructions
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ON
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Exercise 26(11)-15
Name:
Solution
Section:
An asterisk (*) will appear to the right of an incorrect entry. The essay answers will not be graded.
a.
A B C
Single Rate ABC Percent
Overhead Overhead Change in
Allocation Allocation Allocation
per Unit per Unit (B - A) / A
Low
Medium
High
Low: Quantity Rate = Total
Machining hours /hour
Setup setups /setup
Order Processing orders /order
Total
Units
Activity cost per unit
Medium:
Machining hours /hour
Setup setups /setup
Order Processing orders /order
Total
Units
Activity cost per unit
High:
Machining hours /hour
Cells with non-gray backgrounds are protected and cannot be edited.
0%
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Score:
Key Code:
Instructions
Exercise 26(11)-16
Name:
Section:
Supporting calculations:
Setup setups /setup
Order Processing orders /order
Total
Units
Activity cost per unit
b.
c.
[Key essay answer here]
[Key essay answer here]
An asterisk (*) will appear to the right of an incorrect entry. The essay answers will not be graded.
a.
A B C
Single Rate ABC Percent
Overhead Overhead Change in
Allocation Allocation Allocation
per Unit per Unit (B - A) / A
Low $30.00 $58.06 93.5%
Low: Quantity Rate = Total
Machining 24 hours 160$ /hour 3,840$
Setup 14 setups 240 /setup 3,360
Medium:
Machining 225 hours 160$ /hour 36,000$
Setup 13 setups 240 /setup 3,120
High:
Machining 900 hours 160$ /hour 144,000$
Setup 9 setups 240 /setup 2,160
Supporting calculations:
Score:
Instructions
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Exercise 26(11)-16
Name:
Solution
Section:
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Total 152,760$
b.
c.
The machine hour rate is greater under the single rate method than under the activity-based
method because all the factory overhead is allocated by machine hours under the single rate
Column C indicates that under activity-based costing the low-volume product has a higher per-unit
cost than calculated under the single rate method. In contrast, under activity-based costing the
high-volume product has a lower per-unit cost than calculated under the single rate method. This
An asterisk (*) will appear to the right of an incorrect entry. The essay answer will not be graded.
a.
Activity Activity Activity Activity Activity Activity
Activity Usage Rate Cost Usage Rate Cost
Room and meals days /day days /day
Radiology images /image images /image
Pharmacy orders /order orders /order
Chemistry lab tests /test tests /test
Operating room hours /hour hours /hour
Total cost
b.
Patient Putin
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Patient Umit
[Key essay answer here]
Exercise 26(11)-20
Name:
Section:
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0%
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a.
Activity Activity Activity Activity Activity Activity
Activity Usage Rate Cost Usage Rate Cost
Room and meals 6 days $240 /day 1,440$ 4 days $240 /day 960$
Radiology 4 images $215 /image 860 3 images $215 /image 645
b.
Instructions
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ON
Patient Putin apparently had a more serious condition than did Patient Umit. Patient Putin required more operating room
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Patient Putin
Patient Umit
Exercise 26(11)-20
Name:
Solution
Section:
Score:
An asterisk (*) will appear to the right of an incorrect entry. The essay answer will not be graded.
a.
Workers' Home-
Auto Comp. owners
Premium revenue
Less estimated claims
Underwriting income
Administrative activities:
New policy processing
Cancellation processing
Claim audits
Claim disbursements processing
Premium collection processing
Total administrative expenses
Income from operations
Income from operations as a
percent of premium revenue
b.
Instructions
Exercise 26(11)-21
Name:
Section:
0%
Score:
[Key essay answer here]
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SAFETY FIRST INSURANCE COMPANY
Product Profitability Report
For the Year Ended December 31
[Key code here]
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Key Code:
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a.
Workers' Home-
Auto Comp. owners
Premium revenue 5,750,000$ 6,240,000$ 8,160,000$
Less estimated claims 4,312,500 4,680,000 6,120,000
Claim audits 123,200 38,400 307,200
Claim disbursements processing 49,920 22,464 87,360
b.
Product Profitability Report
For the Year Ended December 31
Score:
Instructions
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ON
All three insurance lines have the same percentage of underwriting income to premium revenue (25%). The differences
among the insurance lines are in the way they consume administrative activities. For example, the Homeowners insurance
line has the least profitability due to its high use of administrative activities. Specifically, the Homeowners line has smaller and
Exercise 26(11)-21
Name:
Solution
Section:
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SAFETY FIRST INSURANCE COMPANY
