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Excel+Homework+ +Ch+4+ (ABC)

This document provides data on the direct materials, direct labor hours, sales units, and estimated overhead costs for two product lines, Deluxe and Tourist. It then calculates traditional unit product costs and activity-based costs for each product line. The traditional method assigns overhead based on direct labor hours, while the activity-based method assigns overhead based on four cost pools - labor, setups, production orders, and machine hours. The activity-based method results in a higher unit product cost for Deluxe and a lower cost for Tourist.

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Jasurbek Madjitov
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97 views

Excel+Homework+ +Ch+4+ (ABC)

This document provides data on the direct materials, direct labor hours, sales units, and estimated overhead costs for two product lines, Deluxe and Tourist. It then calculates traditional unit product costs and activity-based costs for each product line. The traditional method assigns overhead based on direct labor hours, while the activity-based method assigns overhead based on four cost pools - labor, setups, production orders, and machine hours. The activity-based method results in a higher unit product cost for Deluxe and a lower cost for Tourist.

Uploaded by

Jasurbek Madjitov
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Chapter 4: Applying Excel

Enter a formula into each of the cells marked with a ? below


Review Problem: Activity-Based Costing

Data
Deluxe Tourist
Annual sales in units 1,000 9,000
Direct materials per unit $20 $20
Direct labor-hours per unit 1 1

Direct labor rate $10 per DLH

Estimated
Overhead Expected Activity
Activities and Activity Measures Cost Deluxe Tourist
Labor related (direct labor-hours) $ 33,000 1,000 9,000
Machine setups (setups) 120,000 20 80
Production orders (orders) 70,000 15 35
General factory (machine-hours) 150,000 10,000 10,000
$373000

Compute the predetermined overhead rate


Estimated total manufacturing overhead (a) $373 000
Estimated total amount of the allocation base (b) 10,000 DLHs
Predetermined overhead rate (a) ÷ (b) $37,30 per DLH

Compute the manufacturing overhead app Deluxe Tourist


Direct labor-hours per unit (a) 1 DLHs 1
Predetermined overhead rate (b) $37,30 per DLH $37,30
Manufacturing overhead applied per unit (a) × (b) $37,30 $37,30

Compute traditional unit product costs Deluxe Tourist


Direct materials $20,20 $ 20.00
Direct labor 10.00 10.00
Manufacturing overhead applied 37.30 37.30
Traditonal unit product cost $67,30 $ 67.30

Compute activity rates Estimated


Overhead
Activities Cost Total Expected Activity
Labor related $33,000 10,000 DLHs
Machine setups $120,000 100 setups
Production orders $70,000 50 orders
General factory $150,000 20,000 MHs

Compute the ABC overhead cost per unit Deluxe


Activity Expected
Activities Rate Activity Amount
Labor related $3,30 1,000 $ 3,300
Machine setups $1,200,00 20 24,000
Production orders $1,400,00 15 21,000
General factory $7,50 10 75,000
Total overhead cost assigned (a) 2610.8 $123,300
Number of units produced (b) 1,000
ABC overhead cost per unit (a) ÷ (b) $123,30

Compute the ABC unit product costs Deluxe Tourist


Direct materials $20,00 $20,00
Direct labor 10.00 10.00
ABC overhead cost per unit (see above) 123.30 27.74
ABC unit product cost $ 153.30 $57,74
ed Activity
Total
10,000
80
35
20,000

Tourist
DLHs
per DLH

Activity Rate
$3,30 per DLH
$1,200,00 per setup
$1,400,00 per order
$7,50 per MH

Tourist
Expected
Activity Amount
9,000 $ 29,700
80 96,000
35 49,000
10,000 75,000
$249,700
9,000
$27,74

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