Product-Costing Accuracy, Consumption Ratios, Activity Rates, Activity Costing T
ID: 2418302 • Letter: P
Question
Product-Costing Accuracy, Consumption Ratios, Activity Rates, Activity Costing
Tristar Manufacturing produces two types of battery-operated toy soldiers: infantry and special forces. The soldiers are produced by using one continuous process. Four activities have been identified: machining, setups, receiving, and packing. Resource drivers have been used to assign costs to each activity. The overhead activities, their costs, and the other related data are as follows:
Required:
1. Calculate the total overhead assigned to each product by using only machine hours to calculate a plantwide rate.
2. Calculate consumption ratios for each activity. Round your answers to two decimal places.
3. Calculate a rate for each activity by using the associated driver. If required, round your answers to two decimal places.
4. Assign the overhead costs to each product by using the activity rates computed in Requirement 3.
Product Machine Hours Setups Receiving Orders Packing Orders Infantry 20,000 300 900 1,600 Special forces 20,000 100 100 1,800 Costs $80,000 $24,000 $18,000 $30,000Explanation / Answer
Overhead (Based On Machine Hrs) Amount Machine Costs 80,000.00 Setup Costs 24,000.00 Order Costs 18,000.00 Packing Costs 30,000.00 Total Overhead 152,000.00 Total Machine Hours 40,000.00 Overhead Per Machine Hour 3.80 Overhead- Infantry( 20000*3.8) 76,000.00 Overhead- Spc Force( 20000*3.8) 76,000.00 Activity Infantry Special Forces Total Infantry % Special Forces % Machine Hours 20,000.00 20,000.00 40,000.00 50.00% 50.00% Setups 300.00 100.00 400.00 75.00% 25.00% Order Received 900.00 100.00 1,000.00 90.00% 10.00% Packing orders 1,600.00 1,800.00 3,400.00 47.06% 52.94% Activity Infantry Special Forces Total Cost ABC Rate Machine Hours 20,000.00 20,000.00 40,000.00 80,000.00 2.00 Setups 300.00 100.00 400.00 24,000.00 60.00 Order Received 900.00 100.00 1,000.00 18,000.00 18.00 Packing orders 1,600.00 1,800.00 3,400.00 30,000.00 8.82 Activity Infantry Special Forces ABC Rate Infantry Overhead Spcl Focrces Overhead Machine Hours 20,000.00 20,000.00 2.00 40,000.00 40,000.00 Setups 300.00 100.00 60.00 18,000.00 6,000.00 Order Received 900.00 100.00 18.00 16,200.00 1,800.00 Packing orders 1,600.00 1,800.00 8.82 14,117.65 15,882.35 Total 88,317.65 63,682.35
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