fasterners total general overhead - machining department - tooling department - machine overhead on attaching machine total general overhead on fasterners production R&D administration marketing shipping commision total sales‚ general and administration cost on fasterner total fasterner production cost total fasterner production profit 96000 70000 13350 3050 315 53285 3873 2567 7375 2948 3562 20325 73610 22390 sales of attaching machine total general overhead - total general overhead on faster production
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1/ Variable Costs: The variable cost will be 40% higher [ an increase of 21‚000 - 15‚000=6‚000 units] Direct Material used 1‚060‚000 Variable Costs: Direct Labor 1‚904‚000 Direct material used [ 1‚060‚000 *1.4] 1‚484‚000 Unit costs [ 6‚335‚600 / 21‚000] =$ 301.7 Indirect Materials and supplies 247‚000 Direct Labor [ 1‚904‚000 * 1.4] 2‚665‚600 Variable Cost/ Unit = 228.27 at both 15k & 21k units Power to run plant eqip 213‚000 Indirect Materials
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each. By using ABC to assign the overhead costs to each activity‚ the following steps should be followed: 1. Identify and define activities using interviews and surveys. Then build a list of activities. • Activity name-usually consists of an action verb and an object. • A description of the tasks that make up the activity. • Classification as a primary activity or secondary activity. • Activity driver- a measure of activity output. For example: Overhead Activity Activity Drivers Inspection
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Nike Inc. Nike Inc. is an American multinational corporation that is engaged in the design‚ development‚ manufacturing and worldwide marketing and selling of footwear‚ apparel‚ equipment‚ accessories and services. It is one of the world’s largest suppliers of athletic shoes and apparel and a major manufacturer of sports equipment‚ with revenue in excess of US$24.1 billion in its fiscal year 2012 (ending May 31‚ 2012). As of 2012‚ its employed more than 44‚000 people worldwide. Their first products
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fixed manufacturing overhead. Under absorption costing‚ fixed manufacturing overhead is treated as a product cost and hence is an asset until products are sold. Under variable costing‚ fixed manufacturing overhead is treated as a period cost and is expensed on the current period’s income statement. Q7-2 Selling and administrative expenses are treated as period costs under both variable costing and absorption costing. Q7-3 Under absorption costing‚ fixed manufacturing overhead costs are included
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greatly decreased‚ and the total overhead costs resulting from depreciation on expensive equipment and machinery‚ utilities‚ repairs‚ and maintenance have significantly increased.” In order for Super Bakery to make better management decisions‚ ABC would be the appropriate way of allocating overhead. In order to understand why this was the right choice for Super Bakery‚ it is important to understand how overhead is allocated with ABC. “ABC allocates overhead to multiple activity cost pools‚ and
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situation got worse). Their overhead rate in 1988 was 434%‚ and it became 577% in 1989 and 563% in 1990. ACF’s direct labor cost was reduced 46% (from $25‚294 to $13‚537) however‚ ACF’s overhead cost was reduced only 29% (from $109‚890 to $78‚157) This implies that the burden for producing one product has increased after starting the outsourcing of Muffler‚ Exhausts‚ and Oil pans. If ACF outsource another product‚ same situation will happen again. The reduction rate of overhead cost can’t catch up the
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Case #2: The Craddock Cup 3/21/13 In order to decide whether or not to keep the Craddock Cup‚ we needed to classify the expenses as either fixed and sunk or variable‚ fixed and sunk costs are not relevant so they are not included in the revised statement. Exhibit A shows an income statement that is revised in this manner (under the revised column). The first expense we found not relevant is the city field rental. We found that this expense is fixed‚ where $1‚200 is allocated to this weekend‚ a
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Easy OBJ: 5-5 NAT: AACSB: Reflective Thinking LOC: AICPA Functional Competencies: Measurement‚ Reporting 44. The use of standard material or labor costs in job-order costing a. | is similar to the use of predetermined overhead rates in a normal costing system. | b. | will keep actual costs of jobs from fluctuating due to changes in component costs. | c. | is appropriate for any company making units to customer specification. | d. | all answers are correct. |
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existing cost system and calculate the cost of the 5 components in the case. What is wrong with the existing cost system? The existing cost system measures direct labour and overhead. Overhead is grouped into a single cost pool that includes overhead costs associated with each of the testing rooms as well as the engineering overhead costs relating to software and tooling development and the administrative costs of the division. ETO suppliers started to do the primarily testing themselves and send
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