Question

5. Setup costs for Weird Al’s two different accordion products: The Polka, and The Super amounted...

5. Setup costs for Weird Al’s two different accordion products: The Polka, and The Super amounted to $24,000. Each product has the same number of set-ups. Weird Al used 4,000 labor hours to product The Polka, and 2,000 labor hours to produce The Super. Weird Al currently applies all overhead based on direct labors hours. However, after taking ACC 201 Weird Al is considering switching to activity based costing.

What is the impact? The Polka is _____________________(indicate under or over-costed) by $__________ under traditional costing. The Super is _____________________(indicate under or over-costed) by $__________ under traditional costing. Show work:

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
The Polka is over-costed by $4,000 under traditional costing.
The Super is under-costed by $4,000 under traditional costing.
Explanation
Polka cost based on labor hours (24000/6000*4000) $ 16,000
Polka cost based on setup (24000/2) $ 12,000
Polka is over-costed $   4,000
Super cost based on labor hours (24000/6000*2000) $   8,000
Super cost based on setup( 24000/2) $ 12,000
Super is undercosted $   4,000
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Please respond A to E (all the questions) This is the exact information and I don't...
Please respond A to E (all the questions) This is the exact information and I don't know how to do it and I really need help. Harwell, Inc. uses a traditional volume-based costing system in which direct labor hours are the allocation base. Harwell produces two different products: Product A, which uses 86,000 direct labor hours, and Product B, which uses 20,000 direct labor hours. Harwell is considering switching to an ABC system by splitting its manufacturing overhead cost of...
Tri-bikes manufactures two different levels of bicycles: the Standard and the Extreme. The total overhead of...
Tri-bikes manufactures two different levels of bicycles: the Standard and the Extreme. The total overhead of $300,000 has traditionally been allocated by direct labor hours, with 140,000 hours for the Standard and 60,000 hours for the Extreme. After analyzing and assigning costs to two cost pools, it was determined that machine hours is estimated to have $200,000 of overhead, with 4,000 hours used on the Standard product and 1,000 hours used on the Extreme product. It was also estimated that...
Bunker makes two types of briefcase, fabric and leather. The company is currently using a traditional...
Bunker makes two types of briefcase, fabric and leather. The company is currently using a traditional costing system with labor hours as the cost driver but is considering switching to an activity-based costing system. In preparation for the possible switch, Bunker has identified two activity cost pools: materials handling and setup. Pertinent data follow:      Fabric Case Leather Case Number of labor hours 24,000 9,000 Number of material moves 798 1,102 Number of setups 42 188 Total estimated overhead costs are...
Lloyd and Harry, Inc. is a manufacturer of briefcases. The company produces and sells two products:...
Lloyd and Harry, Inc. is a manufacturer of briefcases. The company produces and sells two products: Leather and Vinyl. Currently, the company uses a traditional costing system to allocate manufacturing overhead to production based on a predetermined manufacturing overhead rate of $100 per machine hour. Management is considering switching to activity based costing to improve costing accuracy. In their analysis of manufacturing overhead, management has identified two activities and cost pools: Product Inspection and Machining. 80% of the total budgeted...
Adelberg Company has two products: A and B. The annual production and sales of Product A...
Adelberg Company has two products: A and B. The annual production and sales of Product A is 2,300 units and of Product B is 1,700 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.3 direct labor-hours per unit and Product B requires 0.6 direct labor-hours per unit. The total estimated overhead for next period is $105,475. The company is considering switching to an activity-based costing system for...
Adelberg Company has two products: A and B. The annual production and sales of Product A...
Adelberg Company has two products: A and B. The annual production and sales of Product A is 1,800 units and of Product B is 1,200 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.5 direct labor-hours per unit and Product B requires 0.8 direct labor-hours per unit. The total estimated overhead for next period is $99,975. The company is considering switching to an activity-based costing system for...
1. Foxx Company incurs $410000 overhead costs each year in its three main departments, setup ($35000),...
1. Foxx Company incurs $410000 overhead costs each year in its three main departments, setup ($35000), machining ($265000), and packing ($110000). The setup department performs 40 setups per year, the machining department works 5000 hours per year, and the packing department packs 500 orders per year. Information about Foxx’s two products is as follows: Product A1 Product B1 Number of setups      20     20 Machining hours   1000 4000 Orders packed    150    350 Number of products manufactured    600    400 If machining hours...
Which of the following would probably be the least appropriate allocation base for allocating overhead in...
Which of the following would probably be the least appropriate allocation base for allocating overhead in a highly automated manufacturer of specialty valves? A. machine-hours B. power consumption C. direct labor-hours D. machine setups 1 points QUESTION 6 In a job-order costing system, the amount of overhead cost that has been applied to a job that remains incomplete at the end of a period: A. is deducted on the Income Statement as overapplied overhead. B. is closed to Cost of...
Orange County Chrome Company manufactures three chrome-plated products—automobile bumpers, valve covers, and wheels. These products are...
Orange County Chrome Company manufactures three chrome-plated products—automobile bumpers, valve covers, and wheels. These products are manufactured in two production departments (Stamping and Plating). The factory overhead for Orange County Chrome is $213,389. The three products consume both machine hours and direct labor hours in the two production departments as follows: Direct Labor Hours Machine Hours Stamping Department Automobile bumpers 558 803 Valve covers 295 557 Wheels 340 597 1,193 1,957 Plating Department Automobile bumpers 171 1,166 Valve covers 175...
VidPlayers, Inc. manufactures two types of DVD players, a deluxe model anda standard model. The deluxe...
VidPlayers, Inc. manufactures two types of DVD players, a deluxe model anda standard model. The deluxe model is a multi-format progressive-scan DVD player withnetworking capability, Dolby digital, and DTS decoder. The standard model’s primary fea-ture is progressive-scan. Annual production is 20,000 units for the deluxe and 50,000 unitsfor the standard.Both products require 2 hours of direct labor for completion. Therefore, total annualdirect labor hours are 140,000 or [2 hrs.±(20,000²50,000)]. Expected annual manu-facturing overhead is $980,000. Thus, the predetermined overhead rate...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT