Question

After reviewing the new activity-based costing system that Janis McGee has implemented at Joplin Industries’s Port...

After reviewing the new activity-based costing system that Janis McGee has implemented at Joplin Industries’s Port Arthur manufacturing facility, Kris Kristoff, the production supervisor, believes that he can reduce production costs by reducing the time spent on machine setups. He has spent the last month working with employees in the plant to change over the machines more quickly with the same reliability. He plans to produce 106,000 units of J25P and 43,000 units of J40X in the first quarter. He believes that with his more efficient setup routine, he can reduce the number of setup hours for both the J25P and the J40X products by 31 percent.

J25P J40X
Direct material $ 1,506,000 $ 2,412,000
Direct labor
Assembly $ 756,000 $ 612,000
Packaging 996,000 372,000
Total direct labor $ 1,752,000 $ 984,000
Direct costs $ 3,258,000 $ 3,396,000
Overhead
Assembly building
Assembling (@ $30 per mh) $ 192,000 $ 912,000
Setting up machine (@ $900 per setup hour) 39,000 366,000
Handling material (@ $3,000 per run) 27,000 126,000
Packaging building
Inspecting and Packing (@ $5 per direct labor-hour) 312,000 120,000
Shipping (@ $1,320 per shipment) 138,000 276,000
Total ABC overhead $ 708,000 $ 1,800,000
Total ABC cost $ 3,966,000 $ 5,196,000
Number of units 106,000 43,000
Unit cost $ 37.42 $ 120.84

Required:

Compute the amount of overhead allocated to the J25P and the J40X cameras for the first quarter using activity-based costing. Assume that all events are the same in the first quarter as in the third quarter except for the number of setup hours. Assume the cost of a setup hour remains at $900.

Homework Answers

Answer #1
Overhead J25P J40X
Assembly building
Assembling (@30/MH) 1,92,000 9,12,000
Setting up machine (@900 per setup hour)
      39,000*69% 26800
      366,000*69% 246560
Handling material (@ 3,000 per run) 27,000 1,26,000
2,45,910 12,90,540
Packaging Building
Inspecting and packaging (@5per direct labor hour) 3,12,000 1,20,000
Shipping (@1,320 per shipment) 1,38,000 2,76,000
Total ABC Overhead 695,910 1686540
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
After reviewing the new activity-based costing system that Janis McGee has implemented at Joplin Industries’s Port...
After reviewing the new activity-based costing system that Janis McGee has implemented at Joplin Industries’s Port Arthur manufacturing facility, Kris Kristoff, the production supervisor, believes that he can reduce production costs by reducing the time spent on machine setups. He has spent the last month working with employees in the plant to change over the machines more quickly with the same reliability. He plans to produce 112,000 units of J25P and 46,000 units of J40X in the first quarter. He...
After reviewing the new activity-based costing system that Nancy Chen has implemented at IVC's CenterPoint manufacturing...
After reviewing the new activity-based costing system that Nancy Chen has implemented at IVC's CenterPoint manufacturing facility, Tom Spencer, the production supervisor, believes that he can reduce production costs by reducing the time spent on machine setups. He has spent the last month working with employees in the plant to change over the machines more quickly with the same reliability. He plans to produce 110,000 units of the Sport model and 45,000 units of the Pro model in the first...
After reviewing the new activity-based costing system that Nancy Chen has implemented at IVC's CenterPoint manufacturing...
After reviewing the new activity-based costing system that Nancy Chen has implemented at IVC's CenterPoint manufacturing facility, Tom Spencer, the production supervisor, believes that he can reduce production costs by reducing the time spent on machine setups. He has spent the last month working with employees in the plant to change over the machines more quickly with the same reliability. He plans to produce 119,000 units of the Sport model and 49,500 units of the Pro model in the first...
After reviewing the new activity-based costing system that Nancy Chen has implemented at IVC's CenterPoint manufacturing...
After reviewing the new activity-based costing system that Nancy Chen has implemented at IVC's CenterPoint manufacturing facility, Tom Spencer, the production supervisor, believes that he can reduce production costs by reducing the time spent on machine setups. He has spent the last month working with employees in the plant to change over the machines more quickly with the same reliability. He plans to produce 115,000 units of the Sport model and 47,500 units of the Pro model in the first...
Activity-Based Costing: Factory Overhead Costs The total factory overhead for Bardot Marine Company is budgeted for...
Activity-Based Costing: Factory Overhead Costs The total factory overhead for Bardot Marine Company is budgeted for the year at $1,344,900, divided into four activities: fabrication, $672,000; assembly, $234,000; setup, $239,400; and inspection, $199,500. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows: FabricationAssemblySetupInspection Speedboat10,500dlh29,250dlh76setups131inspections Bass boat31,500 9,750 554 919 42,000dlh39,000dlh630setups1,050inspections Each product is budgeted for 4,000 units of production for the year. a.   Determine the...
Activity-Based Costing: Factory Overhead Costs The total factory overhead for Bardot Marine Company is budgeted for...
Activity-Based Costing: Factory Overhead Costs The total factory overhead for Bardot Marine Company is budgeted for the year at $925,250, divided into four activity pools: fabrication,, $459,000; assembly, $203,000; setup, $141,750; and inspection, $121,500. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows: Fabrication Assembly Setup Inspection Speedboat 6,750 dlh 21,750 dlh 49 setups 84 inspections Bass boat 20,250 7,250 356 591 27,000 dlh 29,000...
Activity-Based Costing: Factory Overhead Costs The total factory overhead for Bardot Marine Company is budgeted for...
Activity-Based Costing: Factory Overhead Costs The total factory overhead for Bardot Marine Company is budgeted for the year at $1,243,200, divided into four activities: fabrication, $608,000; assembly, $248,000; setup, $211,200; and inspection, $176,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows: Fabrication Assembly Setup Inspection Speedboat 8,000 dlh 23,250 dlh 58 setups 100 inspections Bass boat 24,000 7,750 422 700 32,000 dlh 31,000 dlh...
Klumper Corporation is a diversified manufacturer of industrial goods. The company’s activity-based costing system contains the...
Klumper Corporation is a diversified manufacturer of industrial goods. The company’s activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Activity Rates Supporting direct labor $ 9 per direct labor-hour Machine processing $ 2 per machine-hour Machine setups $ 35 per setup Production orders $ 170 per order Shipments $ 125 per shipment Product sustaining $ 900 per product Activity data have been supplied for the following two products: Total Expected Activity K425...
Part 1 ABC uses activity based costing where overhead from three different production departments are allocated...
Part 1 ABC uses activity based costing where overhead from three different production departments are allocated to products as follows: Activity                 Driver - Activity Rate - Product A - Product B Cutting Machine Hours - $2.00 per machine hour - 2,000 hours - 3,000 hours Assembly            Assembly Hours - $.50 per assembly hour - 3,000 hours - 5,000 hours Painting                Gallons of Paint - $5.00 per gallon - 1,500 gallons - 1,300 gallons Raw materials are directly followed to...
ABC uses activity based costing where overhead from three different production departments are allocated to products...
ABC uses activity based costing where overhead from three different production departments are allocated to products as follows: Activity                                     Driver                                        Activity Rate                                         Product A              Product B Cutting                                     Machine Hours                                     $2.00 per machine hour                                2,000 hours        3,000 hours Assembly              Assembly Hours                 $.50 per assembly hour                                   3,000 hours        5,000 hours Painting                 Gallons of Paint                                   $5.00 per gallon                                  1,500 gallons     1,300 gallons Raw materials are directly followed to each product and the amount of raw materials used for...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT