lem 3 (Textbook Reference: P4-4)- Activity-based costing vers C&W Corporation la

Question

lem 3 (Textbook Reference: P4-4)- Activity-based costing vers C&W Corporation lab data: ion manufactures travel clocks and watches, Overhead costs are currently all ut the controller has recommended using an activity-based costing system Activity Level Cost Driver Setups Parts Units shipped Cost Travel Clocks Watches 30 36 80,000 20,000 Activity $ 100,000 S 30,000 20 24 Production setup Material handling and requisition Packaging and shipping Total overhead 60,000 S 190,000 Required (Traditional Method): allocation base. Assume labor-hours required to assemble each unit are 0.5 hours per travel clock and 1.0 hour per watch, and that 80,000 travel clocks and 120,000 watches were produced. I. Using the traditional cost assignment method, calculate the plant-wide overhead rate using labor-hours as the 1.1875 Plant-wide overhead rate: s / .1875 per direct labor hour T 2. Under the traditional cost assignment method using the plant-wide overhead rate, how much total overhead cost is allocated to the: Travel clocks:5Watches 41 5p Watches: $ Act ***Problem 3 is continued on the next page***

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount Hours required for travel clock =80000 * .50               40,000.00 Hours required for Watch =120000 * 1             120,000.00 Total Labour hours             160,000.00 Total Overhead               190,000.00 Plantwide overhead rate                     1.1875 2) Cost allocated to travel Clock = 40,000*1.1875               47,500.00 Cost allocated to watch = 120,000*1.1875             142,500.00 3) Particulars Amount a Activity Driver No of Activity b Cost per activity c= a/b Production setup             100,000.00 Setups                       50.00                 2,000.00 Material handling and requisition               30,000.00 Parts                       60.00                     500.00 Packaging and shiping               60,000.00 Units shipped             200,000.00                          0.30 Total Overhead             190,000.00 Set up costs = 2000 per production run Material handling cost = 500 per part Packaging and shiping costs .30 per shipment 4) No of Activity of Travel clock d Cost Allocated to Travel clock c*d No of Activity of Watches e Cost Allocated to Watches c*e Production setup                       20.00               40,000.00                       30.00               60,000.00 Material handling and requisition                       24.00               12,000.00                       36.00               18,000.00 Packaging and shiping               80,000.00               24,000.00             120,000.00               36,000.00               76,000.00             114,000.00 Overhead allocated to Travel Clock               76,000.00 Overhead allocated to Watches             114,000.00

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.