ACC 117 Spring 2018 Or AACSB Analytic AICPAE × \\eChegg Study l Guided SX x- C.

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ACC 117 Spring 2018 Or AACSB Analytic AICPAE × eChegg Study l Guided SX x- C. Secure https://tccs.blackboard.com/bbcswebdav/pid-3553334-dt content-rid-42865465-1/courses/1244 118107/ACC%20117%20Spring%202018%2.. 0 0 : Appsreddit Text Ranch Personal AP LANG Dyee D 77 Ways D The Power Switch D subliminal Switches Boogie Belgique's sti Other bookmarks ACC 117 Spring 2018 Online Exam #2.pdf C: 17) St. James, Inc., currently uses traditional costing procedures, applying S800,000 of overhead to products Beta and Zeta on the basis of direct labor hours. The company has budgeted for 4,000 direct labor hours. St. James, Inc. is considering a shift to activity-based costing and the creation of individual cost pools that will use direct labor hours (DLH), production setups (SU), and number of parts components (PC) as cost drivers. Data on the cost pools and respective driver volumes follow Pool #1 Pool #2 Pool #3 Product Beta Zeta Driver: SU 1,200 DLH 2,800 DLH 45 set-ups 55 set-ups 2,250 PC 750 PC Pool Cost S160,000 $280,000 S360,000 A. Using traditional costing procedures, what is the predetermined overhead rate? B. The overhead cost allocated to Beta by using Activity Based Costing procedures would be: a. $240,000 b. $356,000 c. $444,000 d. $560,000

Explanation / Answer

Answer:

A.

As per the traditional method pre-defined rate of overhead(Labor Hours based) = Total Overhead / Budgeted Direct Hour

= 800,000 / 4,000 = $200 per hour

B.

Correct Answer is b 356,000.

Pool 1 Pool 2 Pool 3 Total (In $) Driver DLH Driver SU Driver PC 1. Beta             1,200                  45             2,250 2. Zeta             2,800                  55                750 3. Total (1+2)             4,000                100             3,000 4. Pool cost        160,000        280,000        360,000 5. Pool cost per Driver (4/3) 40 2800 120 6. Cost Allocated to Beta (1*5)           48,000        126,000        270,000     444,000 7. Cost Allocated to Zeta( 2*5)        112,000        154,000           90,000     356,000

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