ecure | edugen.wileyplus.com/edugen/lti/main.uni Return to Blackboard Weygandt,
ID: 2331866 • Letter: E
Question
ecure | edugen.wileyplus.com/edugen/lti/main.uni Return to Blackboard Weygandt, Managerial Accounting, Be Problem 4-3A a-b, cl-e3 (Video) Shaker Stairs Co, designs and builds factory- made premium wooden stairways for homes. The manufactured stainvay components (spindles, risers, han Budgeted manufacturing overhead costs for the year 2020 are as follows Overhead Cost Pools Purchasing Handling materials Production (autting, milling, finishing) Setting up machines Inspecting Inventory contral (raw materials and finished goeds) $75,000 82,000 220,000 100,000 108,000 126,000 270,000 $981.000 Total budgeted overhead costs For the last 4 years, Shaker Stairs Co. has been charging overhead to products on the basis of machine hours. For the year 2020, 100,000 machine houn Jeremy Nolan, owner-manager of Shaker Stairs Co., recently directed his accountant, Bill Seagren, to implement the activity-based costing system that he fellowing cost drivers and their usage for the previously budgeted overhead cost pools. Estimated Use of Activity Cost Pools Cost DriversCost Drivers Purchasing Handling macerials Production (outting. milling, fnishing) Setting up machines Inspecting Number of orders Number of moves Dinect labor hours Number of setups Number of inspections 600 8,000 100,000 1.250 6.000 168.000 90,000 nventory centrol ( materals and finished goods) Number of compenants Utilities Square feet occupied Steve Hannon, sales manager, has received an order for 250 staays from Cemmunity Buildars. Inc., a large heusing development contractor At a contracz price per stairway to Community Builders. He accumulates the following data for the production of 250 stairwa Sceve's s Direct mazepa's Direct labor Machine hours Direct labor hours Number of purchase orders Number of material maves Number of machine setups Number of inspactions Number of components 5103.800 $113 100 15,000 5.300 60 800 450 16.000 e toExplanation / Answer
Answer 1: Predetermined Overhead rate using traditional costing system:
Overhead rate using traditional costing system = Total Budgeted Overhead / Budgeted Machine Hours
= $868,000/1,00,000
Predetermined Overhead Rate = $8.68 per machine hour - Answer 1
Answer 2: Manufacturing cost per stairway under traditional costing
Manufacturing cost per stairway (under traditional costing system) = $3,41,460/250 = $1365.84 - Answer 2
Answer 3: Activity based overhead rates for each activity
Answer 4 - Total overhead assigned under ABC
Answer 5 - Manufacturing cost per stairway under Activity Based Costing
Manufacturing cost per stairway (under acitivity based costing system) = $284,950/250 = $1139.80 - Answer 5
Direct Material Cost $1,03,600 Direct Labor Cost $112,000 Overhead Cost (14500*$8.68) $1,25,860 Total Manufacturing cost for 250 stairway $3,41,460Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.