Respuesta :
Answer:
1. Cost per set up = $72,000 divided by 400 = $180
2. Special processing machine hourly rate = $200,000 divided by 5,000 = $40
3. General factory hourly rate = $816,000 divided by 24,000 = $34
4. Unit cost for Hub = $93
5. Unit per for Sprockets = $38.95
Explanation:
Forgerty company
1.
Computation of Activity rate
Overhead costs
A.
Machine set up = $72,000
Number of set ups = 400
Cost per set up = $72,000 divided by 400 = $180
Hub = $180 x 100 = $18,000
Sprockets = $180 x 300 = $54,000
B.
Special processing Machine = $200,000
Machine hours = 5,000hrs
Cost per machine hour = $200,000 divided by 5,000 = $40
Hub = $40 x 5,000 = $200,000
Sprockets = $40 x 0 = $0
C.
General factory = $816,000
Direct labour hours = 24,000
Cost Direct labour hour = $816,000 divided by 24,000 = $34
Hub = $34 x 8,000 = $272,000
Sprockets = $34 x 16,000 = $544,000
2.
First calculate Direct labour and Direct material cost:
*. Direct labour costs
Direct labour costs = direct labour hours x hourly direct labour wage rate
Hub = 8,000 hours x $15 = $120,000
Sprockets = 16,000 hours x $15 = $240,000
Total Direct labour costs = $120,000 + $240,000 = $360,000
*. Direct Material Costs
Direct material costs = total units produced x direct material cost per unit
Hub = 10,000 x $32 = $320,000
Sprockets = 40,000 x $18 = $720,000
Total Direct labour costs = $320,000 + $720,000 = $1,040,000
A.Cost per unit
From the above,
i. Hub total cost = $18,000 + $200,000 + $272,000 + $120,000 + $320,000 = $930,000
Units produced = 10,000
Unit cost = $930,000 divided by 10,000 units = $93 per unit
ii. Sprockets total cost = $54,000 + $0 + $544,000 + $240,000 + $720,000 = $1,558,000
Units produced = 40,000
Unit cost = $1,558,000 divided by 40,000 units = $38.95
Answer:
a) Activity Cost pool Activity Rate(A÷B)
Machine set up $180 setups
Special processing $40 MHs
General factory $34 DLHs
b)HUBS
Activity Cost pool ABC costs (A×B)
Machine set up $18,000 setups
Special processing $200,000 MHs
General factory $272,000 DLHs
Total $490,000
SPROCKETS
Activity Cost pool ABC costs (A×B)
Machine set up $54,000 setups
Special processing $0 MHs
General factory $544,000 DLHs
Total $ 598,000
DIRECT MATERIALS AND DIRECT LABOR
Hubs
Unit cost $93.00
Sprockets
Unit cost $38.95
Explanation:
a) Activity for each cost pool
Activity cost pool Estimated overhead cost (A)
Machine set up $72,000
Special processing $200,000
General factory $816,000
Activity Cost pool Expected activity (B)
Machine set up $400 setups
Special processing $500 MHs
General factory $24,000 DLHs
Activity Cost pool Activity Rate(A÷B)
Machine set up $180 setups
Special processing $40 MHs
General factory $34 DLHs
b). The unit cost of each product according to the ABC system, including direct materials and direct labor
HUBS
Activity Cost pool Activity Rate(A)
Machine set up $180 setups
Special processing $40 MHs
General factory $34 DLHs
Activity Cost pool Activity Rate(B)
Machine set up $100 setups
Special processing $5,000 MHs
General factory $8,000 DLHs
Activity Cost pool ABC costs (A×B)
Machine set up $18,000 setups
Special processing $200,000 MHs
General factory $272,000 DLHs
Total $490,000
SPROCKETS
Activity Cost pool Activity Rate(A)
Machine set up $180 setups
Special processing $40 MHs
General factory $34 DLHs
Activity Cost pool Activity Rate(B)
Machine set up $300 setups
Special processing $0 MHs
General factory $16,000 DLHs
Activity Cost pool ABC costs (A×B)
Machine set up $54,000 setups
Special processing $0 MHs
General factory $544,000 DLHs
Total $ 598,000
Hubs, Sprockets
Direct materials $32.00(Hubs) $18.00(sprockets)
Direct labor:$15 per DLH × 0.80 DLHs per unit 12.00 (Hubs)
$15 per DLH × 0.40 DLHs per unit 6.00 (Sprockets)
Overhead:
$490,000 ÷ 10,000 unit 49.00(Hubs)
$598,000 ÷ 40,000 units 14.95(Sprocket)
Unit cost $93.00 (Hubs) $38.95 (Sprockets)
$32.00+$12.00+$49.00=$93 Hubs Unit cost
$18.00+$6.00 +$14.95=$38.95 Sprockets Unit cost
