Homework: chapter 5 HW Save Score: 1.18 of 30 pts 3016(6 complete) HW Score: 68.
ID: 2551052 • Letter: H
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Homework: chapter 5 HW Save Score: 1.18 of 30 pts 3016(6 complete) HW Score: 68.38%, 85.47 of 125 pts E5-25 (similar to) Question Help * To see how activity-based costing would affect the costs of standard and special jobs, Kraftprint collects the following information for the fiscal year 2017 that just ended. EEB (Click the icon to view the information.) Read the roquirements Kraftprint Corporation owns a small printing press that prints leaflets, brochures, and advertising materials. Kraftprint classifies its various printing jobs as standard jobs or special jobs. (Click the icon to view additional information.) Requirement 1. Calculate the cost of a standard job and a special job under the simple costing system. (Round interimRequirements Standard Simple Costing System Cost of supplies per job Direct manufacturing labor cost per job Indirect cost allocated to each job Total costs Requirement 2. Caculate the cost of a standard job and a special job under the activity-based costing system. Begin by calculating the allocation rates for the following activities. (Abbreviations used: Dollar, DM-Direct Administration to five decimal placos, X.Xxxxx.) Job Job 120.00 S 120.00 601.51 300.00 240.00 601.51 1,141.51 1. 2. 3. Calculate the cost of a standard job and a special job under the simple costing system. Calculate the cost of a standard job and a special job under the activity-based costing system. Compare the costs of a standard job and a special jcb in requirements 1 and 2. Why do the simple and activity-based costing systems differ in the cost of a standard job and a special job? 4. How might Kraftprint use the new cost information from its activity-based costing system to better manage its business? Print Done ABC Allocation rate More Info Machine operations Kraftprint's simple job-costing system has two direct-cost categories (direct materials and direct labor) and a single indirect-cost pool. Kraftprint operates at capacity and allocates all indirect costs using printing machine-hours as the allocation base. Kraftprint is concerned about the accuracy of the costs assigned to standard and special jobs and therefore is planning to implement an activity-based costing system. Kraftprint's ABC system would have the same direct-cost categories as its simple costing system. However, instead of a single indirect-cost pool there would now be sk categories for assigning indirect costs: design, purchasing, setup, printing machine operations, marketing, and administration. Choose from any list or enter any number in the input fields and then click Check Answer PrintDone Clear All Check AnswerExplanation / Answer
Allocation of overhead cost activity Wise Detail No. of Job Printing Machine Opertaion Set Up Cost Purchase Order Cost Design Cost Administration cost Marketing Cost Printing Machine Hour/Job Printing Hour Allocation of Cost Setup Hour/Job Setup Hour Allocation of Cost No. of Purchase Order Allocation of Cost Allocation of Cost Direct Labour Cost/Job Allocation of Cost Revenue 4 % Margin on revenue Allocation of Cost Standard Job 1800 10 18000 $468,000 5 9000 $261,000 370 $12,580 $11,000 120 $66,240 2520000 100800 120000 Special Job 900 10 9000 $234,000 8 7200 $208,800 470 $15,980 $34,000 240 $132,480 1260000 50400 60000 27000 $702,000 16200 $469,800 840 $28,560 $45,000 360 $198,720 151200 180000 1. Calculation of cost of standard & Special Job under Activity Based Costing 2. Calculation of cost of standard & Special Job under Simple Costing Standard Job Special Job Standard Job Special Job No of Printing Job 1800 900 No of Printing Job 1800 900 Direct manufacturing Cost Direct manufacturing Cost Cost of Supplies $216,000 $270,000 Cost of Supplies 216000 270000 Direc Labour Cost $216,000 $216,000 Direc Labour Cost 216000 216000 Total Direct Manufacturing Cost $432,000 $486,000 Indirect Cost Allocated to Job 1082720 541360 Indirect Cost Allocated to Job Total Cost 1514720 1027360 Printing Machinery Operation Cost $468,000 $234,000 Set Up Cost $261,000 $208,800 3. Calculation of cost of standard & Special Job under Simple Costing Purchase Order Cost $12,580 $15,980 Standard Job Special Job Design Cost $11,000 $34,000 Cost as per Simple Cost Cost as per ABC Diferrence Cost as per Simple Cost Cost as per ABC Diferrence Administration Cost $66,240 $132,480 Direct manufacturing Cost $432,000 $432,000 $0 $486,000 $486,000 $0 Marketing Cost $120,000 $60,000 Indirect Cost $1,082,720 $938,820 $143,900 $541,360 $685,260 -$143,900 Total Indirect Cost $938,820 $685,260 Total Cost $1,514,720 $1,370,820 $143,900 $1,027,360 $1,171,260 -$143,900 Total Cost $1,370,820 $1,171,260 4. Kaftprint can use the new cost information from its activity based costing system to better manage its Business because on the basis of Activity based costing system overhead cost was allocated appropriately on the basis of each activity involve on each Job In Simple Costing System, Over head over allocated on Standard Job and Overhead under allocated on Special Job. Hence cost of total standard Job has increased and Cost of Special Cost has reduced in Simple costing as compare with ABC Costing
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