I need help doing the questions A-F given the information from the first picture
ID: 2338413 • Letter: I
Question
I need help doing the questions A-F given the information from the first picture
.2 Sabrina Company uses activity based costing to determine the cost of products. At the beginning of the year, managers estimated the following: Cost Pool Ordering & Receiving Setup Quality Control Maintenance Estimated Overhead $60,000 $34,000 $50,000 $54,000 Expected Activity Purchase Orders Batches Inspections Machine Hours Product A 50 40 20 1,600 Product B 40 60 80 1,200 Product C 60 60 25 3,200 Budget Data Sales Direct Materials Direct Labor Product A $330,000 $60,000 $90,000 Product B $240,000 $55,000 $70,000 Product C $175,000 $45,000 $50,000Explanation / Answer
Req A: Activity rates: Activity Driver Total Total Activity Cost Activity Rate Ordering and Receiving Purchase order 60000 150 400 Setup Batches 34000 160 212.5 Quality Control Inspections 50000 125 400 maintenance MH 54000 6000 9 Req B: Activity Rate Product A Product B Product C Activity OH cost Activity OH cost Activity OH cost Ordering and Receiving 400 50 20000 40 16000 60 24000 Setup 212.5 40 8500 60 12750 60 12750 Quality Control 400 20 8000 80 32000 25 10000 maintenance 9 1600 14400 1200 10800 3200 28800 TOTAL OVERHEADS 50900 71550 75550 Req C: Product A Product B Product C Sales 330000 240000 175000 Less: Cost Direct material 60000 55000 45000 Direct Labour 90000 70000 50000 Overheads 50900 71550 75550 Total Profits 129100 43450 4450 Req D: Total Overheads 198000 Divide: Total MH 6000 OH rate per MH 33 Req E: Product A Product B Product C Machine hours 1600 1200 3200 OH rate per MH 33 33 33 Total Overheads allocated 52800 39600 105600 Req F: Product A Product B Product C Sales 330000 240000 175000 Less: Cost Direct material 60000 55000 45000 Direct Labour 90000 70000 50000 Overheads 52800 39600 105600 Total Profits 127200 75400 -25600
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