Costing System Assignment

BUS 503 Homework Fang Geng

P5-47
The information supplied by the ABC project team is in columns A, B, C, D, F, G, I.
Activity
Activity Cost Pool
Cost Driver
Cost Divers Quantity
Pool Rate
Product Line
Cost Driver Quantity for Product Line
Activity Cost for Product Line
Product Line Production Volume
Activity Cost per Unit of Production
Material
52,500
Production
100
525.00
REG
40
21,000
5,000
4.20
Handing

Runs

ADV
40
21,000
4,000
5.25

GMT
20
10,500
1,,000
10.50

Total
100
52,500

The results of the ABC calculations are in columns E, H, and J. The ABC calculations are as follows:
a. Compute pool rate for material-handling activity:
Activity cost pool
/
Cost driver quantity
=
Pool rate
52,500
/
100
=
525.00

b. Compute total activity cost for each product line:
Product Line
Pool Rate
*
Cost Driver Quantity for Product Line
=
Activity Cost for Each Product Line
REG
525.00
*
40
=
21,000
ADV
525.00
*
40
=
21,000
GMT
525.00
*
20
=
10,500

c. Compute product cost per unit for each product line:
Product Line
Activity Cost for Each Product Line
/
Cost Driver Quantity for Product Line
=
Activity Cost for Each Product Line
REG
21,000
/
5,000
=
4.20
ADV
21,000
/
4,000
=
5.25
GMT
10,500
/
1,000
=
10.50

P5-49
1. Manufacturing overheads:
Manufacturing overheads is the overall indirect cost incurred in manufacturing a product. It includes all the indirect manufacturing costs. Direct material and direct labor will not be included in the manufacturing costs, as they will be separately reported in prime costs. Generally, following are the examples of manufacturing costs:
a. Indirect labor
b. Indirect material
c. Other indirect manufacturing costs.
Developing pre-determined overhead rate:
Pre-determine overheads are the rates developed by the companies to assign the cost of products before they are completed and shipped. These rates enable the companies to mot to wait foe the actual completion of production.

2. There will be no impact of