Requirements 1,2,3,4 ?Doors, Inc., produces two types of? doors, interior and ex
ID: 2527118 • Letter: R
Question
Requirements 1,2,3,4
?Doors, Inc., produces two types of? doors, interior and exterior. The? company's simple costing system has two direct cost categories? (materials and? labor) and one indirect cost pool. The simple costing system allocates indirect costs on the basis of? machine-hours. Recently, the owners of
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Doors have been concerned about a decline in the market share for their interior? doors, usually their biggest seller. Information related to
SturdySturdy
Doors production for the most recent year? follows:
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Requirement 1. Calculate the cost of an interior door and an exterior door under the existing simple costing system.
Before calculating the cost of an interior and exterior? door, begin by calculating the overhead rate under the simple costing system. First select the? formula, then enter the applicable amounts and calculate the rate. ?(Round your answer to the nearest cent. Abbreviations? used: bgt.? = budgeted, qty? = quantity.)
Budgeted overhead rate
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Simple costing system
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Budgeted overhead rate
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Simple costing system
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5-24 (similar to) drect costs on the basis of machine hours. Recently, the owners of Dandy Doors have been concemed about a decline in the markot share for their interor doors, usually their biggest seller Ieformation related to Dandy Doors roduction for the most recent year follow data ) Budgited overhead raeExplanation / Answer
HELLO STUDENT
REQUIREMENT NO 1
SIMPLE COSTING SYSTEM
TOTAL INDIRECT COSTS= $91,000 + $41,412+ $24,420 + $40,000 +$20,900 +4%($140*3300)+($240*1900)
TOTAL INDIRECT COSTS=$254,452
TOTAL MACHINE HOUR RATE= 5,500+4,500=10,000
INDIRECT COST PER MACHINE HOUR=$254,452/10,000
PER MACHINE HOUR =$25.44
SIMPLE COSTING SYSTEM INTERIOR EXTERIOR
DIRECT MATERIALS $82500 $66500
DIRECT MANUFACTURING LABOUR $68640 $59280
INDIRECT COST ALLOCATED TO EACH JOB
($25.44*5500;4500 MACHINE HOURS) $139920 $114480
TOTAL COSTS $291060 $240260
COST PER UNIT ($291060/3300;$240260/1900) $88.2 $126.45
REQUIREMENT 2
Activity-Based costing system
Activity (1) Total Cost of activity(2) COST DRIVER(3) cost driver(q) allocation
rate
Product Scheduling $91,000 Production run 130 700/run
Material Handling $41,412 material move 238 174/move
Machine set up $24,420 machine setup 185 132/setup
Assembly $40,000 machine hours 10,000 4/machine hr
Inspection $20,900 inspection 380 55/inspection
Marketing %of revenue 0.04/dollar of sale
ABC SYSTEM INTERIOR EXTERIOR
DIRECT MATERIALS $82500 $66500
DIRECT MANUFACTURING LABOUR $68640 $59280
INDIRECT COST ALLOCATED
PRODUCT SCHEDULING($700/RUN*40;90) $28000 $63000
MATERIAL HANDLING(1$74/MOVE*74;164) $12876 $28536
MACHINE SETUP($132/SETUP*50;135) $6600 $17820
ASSEMBLY($4 /MACHINE HOUR*5,500;4,500) $22000 $18000
INSPECTION($55/INSPECTION*230;150) $12650 $8250
MARKETING(0.04*140*3300 ;0.04*240*1900) $18480 $18240
TOTAL COSTS $251746 $279626
TOTAL COST PER UNIT ($251746/3300 UNITS; $279626/1900 UNITS) $76.28 $147.17
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