Reach Consulting Corporation has its headquarters in Chicago and operates from three branch offices in Portland, Dallas, and Miami. . Which of the following is not true? The estimated total cost and expected activity for one of the company's three activity cost pools are as follows. Traditional volume-based methods are easier to use and less costly to implement and maintain. The departmental overhead rate method does not assign overhead on the basis of volume-related measures. The company has established the following standard for the direct labor costs of one unit of product: Standard Hours Standard Rate Standard Cost 1. The following details about overhead costs were taken from its company records.
False Activity-based costing involves four steps: 1 identify activities and the costs they cause, 2 group similar activities into cost pools, 3 determine an activity rate for each activity cost pool, and 4 allocate overhead costs to products using those activity rates. Annual production and sales are 500 units of Product A and 900 units of Product B. The direct labor efficiency variance for June is: Houghton Company maintains warehouses that stock items carried by its e-retailer clients. Information for next year related to this Activity-Based Costing system is as follows: Activity Cost Pool Activity Measure Estimated Overhead Cost General service. The annual production and sales of Product A is 9,000 units and of Product B is 7,500 units. For example, if the sales manager accepts a rush order that will result in higher than normal shipping costs, these additional costs are charged to the sales manager because the authority to accept or decline the rush order was given to the sales manager. Fausto Company employs a standard cost system in which direct materials inventory is carried at standard cost.
All other fixed manufacturing overhead costs represent current cash flows. The company has two products: A and B. Purchase order processing is an example of a a. The variable selling and administrative costs would have to be incurred to sell the defective units. The price variance for the direct materials acquired by the company during June is Fausto Company employs a standard cost system in which direct materials inventory is carried at standard cost. The mechanical systems are combined with the housing assembly in its finishing department.
. There are three activity cost pools, with total cost and total activity as follows: Total Activity Activity Cost Pool Total Cost Product A Product B Total Activity 1. Work In Process is debited and Manufacturing Overhead is credited Question 2 Matt Company uses activity-based costing. Given the amounts below, how many direct labor hours does the company expect in department 2? Step 1:- Want to buy solution for this. During September, Kennel budgeted for 4,400 tenant-days, but its actual level of activity was 4,450 tenant-days. Matt Company uses activity-based costing. Jennifer Company has two products: A and B.
A measure of the amount of time required to perform an activity. Do not round intermediate calculations. Bossie Corporation uses an activity-based costing system with three activity cost pools. Which of the following is not a limitation of activity-based costing? D Identify the activities and the overhead costs they cause. Orange I am trying to complete my homework and I am having trouble on a problem that I can't understand why it is wrong? The company estimates that 40% of its overhead is variable and the remainder is fixed.
Round your intermediate calculations to 2 decimal places. The company uses a plantwide overhead rate with direct labor hours as the allocation base. Given the amounts below, how many machine hours does the company expect in department 2? The predetermined overhead rate i. Assume Ray Manufacturing uses Activity-based cost drivers to assign overhead. The standard cost card shows that 12. A measure of the amount of time required to perform an activity. Activity-based costing often shifts overhead costs from large volume, standardized products to low-volume, specialty products that consume disproportionate resources.
An activity measure that is used for the life of the company. Factories are more modernized and require a higher-skilled employee that is harder to come by. According to the company's records,. True The departmental overhead rate method traces costs to each department and then determines an allocation base for each department. The company has sufficient idle capacity to manufacture the additional units. Product code is extremely important to locate your assignment.
We monitor changes and explore new ideas all while helping minimize taxes—with a focus on high-gear performance. The company has two products: A and B. True Activity-based costing eliminates the need for overhead allocation rates. If the company plans to make 10,000 units of Fancy X and 10,000 units of Plain X, then each unit produced will be allocated the same amount of overhead. During July, Houghton shipped 315,000 orders using 21,750 direct labor-hours. What are the main advantages of traditional volume-based allocation methods compared to activity-based costing? Please click on here and then fill all details and please mentioned product code at the end of the case. If the company used a plantwide overhead rate based on direct labor hours, what is the overhead cost for each unit of Job 3175? Houghton then pulls the item from the warehouse, packs it and ships it to the customer.