Activity-Based Costing and Conventional Costs Compared Chef Grill Company manufa
ID: 2525748 • Letter: A
Question
Activity-Based Costing and Conventional Costs Compared Chef Grill Company manufactures two types of cooking grills: the Gas Cooker and the Charcoal Smoker. The Cooker is a premium product sold in upscale outdoor shops; the Smoker is sold in major discount stores. Following is information pertaining to the manufacturing costs for the current month. Gas Cooker Charcoal Smoker Units 1,000 3,000 Number of batches 20 10 Number of batch moves 80 20 Direct materials $30,000 $100,000 Direct labor $20,000 $29,000 Manufacturing overhead follows: Activity Cost Cost Driver Materials acquisition and inspection $299,000 Amount of direct materials cost Materials movement 16,600 Number of batch moves Scheduling 18,000 Number of batches $333,600 Rounding instructions: Do not round until your final answers. Round total cost answers to the nearest dollar and per unit answers to the nearest cent. (a) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming all manufacturing overhead is assigned on the basis of direct labor dollars. HINT: Use 6.8082 for overhead rate calculations. Total cost $Answer Gas Cooker $Answer per unit Charcoal Smoker $Answer per unit (b) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming manufacturing overhead is assigned using activity-based costing. Total cost $Answer Gas Cooker $Answer per unit Charcoal Smoker $Answer per unit
Explanation / Answer
Gas Cooker Charcoal smoker Total Units 1000 3000 No. of batches 20 10 30 No of batches moves 80 20 100 Direct material $30,000 100000 130000 Direct labor 20000 29000 Manufacturing overhead Acticity Cost Cost driver materials aquisition and inspection $30,800 299000 amount of direct material cost Material Movement 16,200 16600 Number of batches moved Scheduling 18000 333600 ANS 1 Gas Cooker Charcoal smoker Total cost Direct material $30,000 100000 Direct labor 20000 29000 Manufacturing overhead 136164 197438 (6.8082*20000) (6.8082*29000) Total cost T $186,164 $326,438 $512,602 No. of units N 1000 3000 Cost per unit T/N $186.16 $108.81 Total cost $512,602 Gas cooker $186.16 Charcoal smoker $108.81 ans 3 Activity based Gas Cooker Charcoal smoker Total cost Direct material $30,000 100000 Direct labor 20000 29000 Manufacturing overhead 94280 239320 Total cost T $144,280 $368,320 $512,600 No. of units N 1000 3000 Cost per unit T/N $144.28 $122.77 Total cost $512,600 Gas cooker $144.28 Charcoal smoker $122.77 working Manufacturing overhead Gas cooker Charcoal Cost Cost driver Activity rate C/D Cost driver Cost assigned Cost driver Cost assigned materials aquisition and inspection 299000 130000 amount of direct material cost 2.3 30000 69000 100000 230000 Material Movement 16600 100 Number of batches moved 166 80 13280 20 3320 Scheduling 18000 30 No. of batches 600 20 12000 10 6000 333600 94280 239320
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