Student Name:
Class:
Part a.
Estimated
Costs Rate
54,000$ 200 orders 270$ «- Correct!
Institutional Standard Silver Total
Total cost
Direct labor
Indirect costs
39,000$ 24,000$ 15,000$ 78,000$
Correct! Correct! Correct! Correct!
Institutional Standard Silver Total
Total cost
Processing orders
Setting up production
Handling materials
Using machines
Performing quality control
Packing
Indirect costs:
39,000$ 24,000$ 15,000$ 78,000$
Part c.
Production costs using ABC
Account
Direct materials
Direct labor
Account
Direct materials
Production costs using direct labor hours
Part b.
Number of orders
Processing orders
Instructor
Cost Driver
KITCHEN SUPPLY, INC.
Activity
Driver Units
Problem 09-51
McGraw-Hill/Irwin
Estimated allocation base
Estimated activity
Predetermined rate for direct labor-hour:
Total estimated overhead
Performing quality control
Number of units
Number of inspections
Using machines
Handling materials
Number of runs
Setting up production
Machine hours
Estimated
Estimated Cost
Cost
Driver Activity
54,000$
Institutional Standard Silver
60,000 24,000 9,000
Direct labor-hours
Number of orders
Number of production runs
Pounds of material
Number of inspections
Units shipped
39,000$ 24,000$ 15,000$
7,500
Actual labor cost per hour
Estimated direct labor-hours for Year 2
Direct materials costs
Given Data P09-51:
Additional Information:
Cost driver volumes in January, Year 2:
Activity
Year 2 cost estimates:
Number of units produced
KITCHEN SUPPLY, INC.
Cost Driver
Recommended
Number of orders
Processing orders
45 inspections
Number of units
Number of inspections
Setting up production
Performing quality control
Pounds of materials used
Number of production runs
Machine depreciation and maintenance
Handling materials
100 runs
Student Name:
Class:
Estimated Cost Driver
Cost Activity Rate
Machine hours 4,698,000$ 50,000 93.96$
Correct!
Route 66 Main Street Alley Cat Total
Correct!
Route 66 Main Street Alley Cat Total
Gross profit
Energy
Shipping
Contribution margin
Fixed overhead:
Plant administration
Direct material
Direct labor
Variable overhead:
Machine setup
Order processing
Warehousing
7,600,000 11,200,000 9,500,000 28,300,000
Sales revenue
Part b.
Sales revenue
Direct costs:
Income Statement
Pickle Motorcycles, Inc.
All variable overhead
Income Statement
Pickle Motorcycles, Inc.
Activity
Cost Driver
Instructor
McGraw-Hill/Irwin
Problem 09-53
PICKLE MOTORCYCLES, INC.
Recommended
Part a.
Compute machine hour rate:
Plant administration
Other
Gross profit
Fixed overhead:
Direct costs:
Direct labor
Variable overhead
Contribution margin
Route 66 Main Street Alley Cat Total
7,600,000$ 11,200,000$ 9,500,000$ 28,300,000$
3,000,000 4,800,000 4,000,000 11,800,000
288,000 480,000 1,080,000 1,848,000
Activity Route 66 Main Street Alley Cat
22 34 44
Processing orders
Number of units shipped
Number of units held in inventory
Number of sales orders received
Using energy
Recommended cost allocation bases:
Given Data P09-53:
Sales revenue
Direct costs
Direct materials
Direct labor
PICKLE MOTORCYCLES, INC.
Income Statement
Activity Level
Setting up machines
Number of production runs
Cost Driver
Shipping
Contribution margin
Fixed overhead
Plant administration
Machine setup
Order processing
Warehousing costs
Energy to run machines
Other fixed overhead
Student Name:
Class:
Oval Round Square Total
240,000 240,000 240,000 720,000
Costs Activity
Material handling
Total overhead costs
Pounds of material
1,350,000 90,000
Estimated Cost Driver Burden Rate
Cost Activity per DLH
Labor hours 6,300,000$ 15,000 420.00$
Correct!
Oval Round Square
Direct Costs
Overhead
Total costs
Number of units
Unit cost
Correct! Correct! Correct!
Estimated
Cost Rate
Material handling
Scheduling and setup
Utilities
Pounds of material
Setups
Machine hours
Oval Round Square
Unit cost
Overhead:
Utilities
Scheduling and Setup
Material handling
Total costs
Number of units
240,000$ 240,000$ 240,000$
Compute cost per unit with ABC
Part d.
Direct Costs
Compute cost per unit:
Total overhead
Compute overhead rate per labor hour:
Activity
Cost Driver
Cost Driver
Cost pools
Cost pools
Instructor
McGraw-Hill/Irwin
Problem 09-54
CHURCHILL PRODUCTS
Products
Total direct costs
Budgeted
Part a.
Cost Drivers
Machine hours
Recommended
Recommended
Compute Activity-based rates:
Part c.
Utilities
Total machine hours
Total number of setups
Total pounds of material
Total direct labor hours
Number of units produced
Costs
1,350,000$ 90,000
Oval Round Square
240,000$ 240,000$ 240,000$
Number of units produced
Total pounds of material
Total number of setups
Total machine-hours
Utilities
Total direct costs (material and labor)
Given Data P09-54:
Drivers
Activity
Products
CHURCHILL PRODUCTS
Next year’s plans and budget:
machine-hours
Cost Pools
Overhead cost pools:
Material handling
Scheduling and setup
pounds of material
setups
Student Name:
Class:
M3100 M4100 M6100
10 20 20
Compute machine hour rate:
Estimated Cost Driver
Cost Activity Rate
Machine hours 8,700,000$ 25,000 348.00$
Correct!
M3100 M4100 M6100 Total
9,000,000$ 15,000,000$ 13,500,000$ 37,500,000$
3,312,000$ 6,468,000$ 4,920,000$ 14,700,000$
Gross profit
Direct material
Direct labor
Variable overhead
Direct costs:
Contribution margin
Plant administration
Correct!
Activity Unit
Cost Volume Rate
2,400,000$ 50 48,000$ «- Correct!
8,700,000$
Operating machines
Units shipped
Machine hours
Units held in inventory
Sales orders received
Processing sales orders
M3100 M4100 M6100 Total
9,000,000$ 15,000,000$ 13,500,000$ 37,500,000$
3,387,000$ 5,688,000$ 5,625,000$ 14,700,000$
Plant Administration
Gross profit
Direct material
Direct labor
Variable overhead:
Setting up machines
Processing orders
Operating machines
Contribution margin
Correct!
Sales revenue
Direct costs:
Setting up machines
Part a.
Setting up machine
All variable overhead
Activity
Income Statement
Problem 09-59
McGraw-Hill/Irwin
Instructor
Production runs
MTI
Recommended
Cost Driver
Activity Level
Recommended
Activity
Production runs
Cost Driver
MTI
MTI
Income Statement
Cost Driver
Activity
Sales revenue
Compute Activity-based rates:
Part b.
Processing sales order
Operating machine
Units shipped
Machine hours
Units held in inventory
Sales orders received
M3100 M4100 M6100 Total
9,000,000$ 15,000,000$ 13,500,000$ 37,500,000$
3,000,000 4,500,000 3,300,000 10,800,000
M3100 M4100 M6100 Total
10,000 17,500 10,000 37,500
M3100 M4100 M6100
10 20 20
Units shipped
Units held in inventory
Sales orders received
Operating machines
Processing sales orders
Production runs
Setting up machines
Activity
Units produced last year:
Employee team recommendations:
Income Statement
MTI
Cost Driver
Given Data P9-59:
Sales revenue
Direct costs:
Direct materials
Contribution margin
Plant administration
Shipping
Direct labor
Variable overhead:
Setting up machines
Processing sales orders
Warehousing
Operating machines