Managerial Accounting 1B Ch17

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Managerial Accounting 1B

Financial
and Managerial Accounting

Chapter 17

Exercise 17-6 Plantwide overhead rate L.O. P1

[The following information applies to the questions displayed
below.]






Textra Polymers produces parts for
a variety of small machine manufacturers. Most products go through two
operations, molding and trimming, before they are ready for packaging.
Expected costs and activities for the molding department and for the trimming
department for 2011 follow.





















































Molding



Trimming



Direct labor hours







52,000



DLH









48,000



DLH





Machine hours







30,500



MH









3,600



MH





Overhead costs





$



730,000









$



590,000















Data for two special order parts
to be manufactured by the company in 2011 follow:


1.Exercise 17-6 Part
1










Required



1.



Compute the plantwide overhead
rate using direct labor hours as the base.
(Round
your answer to 2 decimal places. Omit the “$” sign in your
response.)







Plantwide overhead
rate



2.Exercise 17-6 Part 2







2.



Determine the overhead cost
assigned to each product line using the plantwide rate computed in part 1.
(Round your intermediate calculations to 2 decimal places.
Omit the “$” sign in your response.)



















Product



Overhead
cost



Part A27C





Part X82B








3.xercise 17-7 Departmental overhead rates L.O. P2






Textra Polymers produces parts for
a variety of small machine manufacturers. Most products go through two
operations, molding and trimming, before they are ready for packaging.
Expected costs and activities for the molding department and for the trimming
department for 2011 follow.




















































Molding



Trimming



Direct labor hours







52,000



DLH









48,000



DLH





Machine hours







30,500



MH









3,600



MH





Overhead costs





$



730,000









$



590,000















Data for two special order parts
to be manufactured by the company in 2011 follow:











Required



1.



Compute a departmental overhead
rate for the molding department based on machine hours and a department
overhead rate for the trimming department based on direct labor hours.
(Round your answers to 2 decimal places. Omit the
“$” sign in your response.)



















Department



Overhead
rate



Molding





Trimming














2.



Determine the total overhead cost
assigned to each product line using the departmental overhead rates from
requirement 1.
(Round your intermediate
calculations to 2 decimal places and final answers to whole dollar amount.
Omit the “$” sign in your response.)

























Product



Molding



Trimming



Total
overhead
cost



Part A27C









Part X82B


















3.



Determine the overhead cost per
unit for each product line using the departmental rate..
(Round your answers to 2 decimal places. Omit the
“$” sign in your response.)



















Product



Overhead
cost



Part A27C





Part X82B








4.Exercise 17-9 Using the plantwide Overhead rate to assess prices
L.O. A1, P1






Real Cool produces two different
models of air conditioners. The company produces the mechanical systems in
their components department. The mechanical systems are combined with the
housing assembly in its finishing department. The activities, costs, and
drivers associated with these two manufacturing processes and the production
support process follow.







Additional production information
concerning its two product lines follows.











Required



1.



Using a plantwide overhead rate
based on machine hours, compute the overhead cost per unit for each product
line.
(Round your intermediate calculations
and final answers to 2 decimal places. Omit the “$” sign in your
response.)



















Product



Overhead
cost



Model 145





Model 212














2.



Determine the total cost per unit
for each products line if the direct labor and direct materials costs per
unit are $250 for Model 145 and $180 for Model 212.
(Round your intermediate and final answers to 2 decimal
places. Omit the “$” sign in your response.)



















Product



Total
cost



Model 145





Model 212














3.



Assume if the market price for
Model 145 is $800 and the market price for Model 212 is $470, determine the
profit or loss per unit for each model.
(Input
all amounts as positive values. Round your intermediate and final answers to
2 decimal places. Omit the “$” sign in your response.)




























Model 145







Model 212










5.

Exercise 17-13 Using ABC for strategic decisions L.O. P1, P3






Consider the following data for
two products of Rowena Manufacturing.





























Product
A



Product
B



Number of units
produced



10,000 units



2,000 units



Direct labor cost(@$24
per DLH)



0.20 DLH per unit



0.25 DLH per unit



Direct materials cost



$ 2 per unit



$ 3 per unit

























































Activity



Overhead
costs



Machine setup





$



121,000





Materials handling







48,000





Quality control







80,000





















$



249,000









































Product
A



Product
B



Manufacturing cost per
unit
















2.



Assume if the market price for
Product A is $20 and the market price for Product B is $60, determine the
profit or loss per unit for each product.
(Round
your answers to 2 decimal places. Omit the “$” sign in your
response. Input all amounts as positive values.)




























Product A







Product B
















3.



Consider the following additional
information about these two product lines. If ABC is used for assigning
overhead costs to products, what is the cost per unit for Product A and for
Product B?
(Round your answers to 2 decimal
places. Omit the “$” sign in your response.)





























Product
A



Product
B



Number of setups
required for production



10 setups



12 setups



Number of parts
required



1 part / unit



3 parts / unit



Inspection hours
required



40 hours



210 hours























Product
A



Product
B



Manufacturing cost per
unit
















4.1



Determine the profit or loss
per unit for each product.
(Round your
answers to 2 decimal places. Input all amounts as positive values. Omit the
“$” sign in your response.)




























Product A







Product B










Problem 17-1A Evaluating product line costs and prices using ABC
L.O. P3

[The following information applies to the questions displayed
below.]






Healthy Day Company produces two
beverages, PowerPunch and SlimLife. Data about these productsfollow.







Additional data from its two
production departments follow.


 

7.Problem 17-1A Part 2







2.



What is the cost per bottle for
PowerPunch and SlimLife?
(Do not round
intermediate calculations and round your final answers to 2 decimal places.
Omit the “$” sign in your response.)





















PowerPunch



SlimLife



Average cost per
bottle



















9.Problem 17-1A Part 4







4.



What is the minimum price that the
company should set per bottle of SlimLife?


















$0.53 per bottle





$0.86 per bottle





$0.36 per bottle







The price of SlimLife must cover
the costs associated with the product, so the minimum price for this product
is $0.53 / bottle.


 

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