Project #37614 - Accounting

Max has provided the following data for activity based costing system

activcity cost pools     total cost                     total activity

designing products      387,300                       6490 product design hours

setting up batches       52,678                         7366 batch set ups

assembly products       25,122                         4018 assembly hours

 

the activity rate for the “designing products” activity cost pool is

 

2. Sasha company allocates the estimated 180,500 of its accounting department costs to its production and sales department, since the accounting department supports the other two departments particularly with regards to payroll and accounts payable. The cost will be allocated based on the number of employees using the direct method.  Ifo. Regarding employees is as follows>

Department                 employees

Accounting                 4

Production                  26

Sales                            19

How much of the accounting cost will be allocated to production?

 

 

 

 

 

 

 

 

 

 

 

3. malusa company allocated costs from the  payroll department (S1). And maintenance from the department (S2) and Molding (P1), fishing (p2) and packaging (p3). Payroll department costs are allocated based on the number of employees in the department and maintenance department costs are allocated based on the number of square feet which the production department occupies within the factors. Informaiton about the departments are as follows:

 

Department                 costs                number of employees              number of Square feet

Payroll (S1)               132000              2                                              2,000

Maintenance (S2)        220000            8                                              64000

Molding (P1)                                       65                                            100,000          

Fishing (P2)                                         49                                            60000 

Packaging (P3)                                    16                                            40000

Medusa uses direct method to allocate costs.  Round all answers to the nearest dollar

What amount of molusa costs will be allocate to the payroll dept.

 

4.  Manassas company has 55 obselete keyboards that are carried in inventory at a cost of  9,600. if these keyboards are upgraded at a cost of 7,000. They could be sold for 18,800. Alternatively they could be sold “as is” for 8,800. What is the net advantage or disadvantage of reworking the keyboards?

5. ritz company sells fine collectible  statutes – implemented activity based costing.  Costs in shipping department has been divided into three costs. The first cost pool has been related to packaging and shipping and rand has determined that the number of boxes is in an appropriate cost driver for these costs.  The second cost pool is made up of cost related  to the final inspection of each item before it is shipped and the cost driver for this pool is the number of individual items that are inspected and shipped the final cost pool is used for general operations and supervision of the department and the cost driver is the number of shipments. Information is summarized as follows.

Cost pool                                 total cost         cost driver                               annual activity

Packaging & Shipping                        168,300 number of boxes shipped                              21900 boxes

Final inspection                                   204,300 number of individual items shipped             97500 items

 General operations and supervision 81,800 number of orders                                               9000 orders

During the period the far east office generated 683 orders for a total  of 6090 items. These orders were shipped in 1,447  boxes. What amount of shipping costs should be allocated to these sales

 

6. baller financial offers various checking accounts. The bank adopted activity based costing system to design  to assign various cost types of checking accounts. The following related to the money marketing account. One of the popular checking accounts and the ABC cost pools. Annual number of accounts = 59,000. Checking account cost pools

Cost pools                                           cost                              cost drivers

Returned checks                                             2,910000                     number of returned checks

Checking account reconciliation costs            56,000                         number of account reconciliation  requests

New account set up                            633,000                                   number of new accounts

Copies of canceled checks                              389,000                                   number of canceled checks copy requests

Online banking web maintenance fee 193,6000                     per product group (type of account)

 

Annual info related to cost drivers

Cost pool                                             all products                             money market checking

Retruned checks                                             199,000 returned checks                     18,000

Check reconcialition costs                              389,000 checking account                  420     

New accounts                                     55,000 new accounts              15,000

Canceled check copy requests                        96,000 canceled check                        60,000

Website costs                                      1 type of account

Calculate the overhead cost per account for the money market checking

 

7.  sosa company has $39 per unit in variable costs and 1,900,000 per year in fixed costs. Demand is estimated to be 138,000 units annually. What is the price if  a  markup of 35% on total cost is used to determine the price.

 

8. bobs company sells one product with a  variable cost of $5.00 per unit. The company is unsure what price to charge in order to maximize profit. The charge will also affect the demand. If fixed costs are 100,000 and the following chart represents the demand at various prices. What price should be charged to maximize profit<

Unit sold 30,000 – price:  10

  40,000 - Price 9

50,000- price 8

60,000, price 7           

 

9 . a retailer purchased trendy clothes that had gone out of style and msut be marked down to 30 percent of the original selling price in order to be sold. Which of the following is a sunk cost in this situation.

 

-          Original selling price

-          Anticipated profit

-          Original purchase price

-          Current selling price

10. carlton products company analyzed the indirect costs associated with servicing its customers. To assess customer profitability.

 

Cost pool                                 annual cost driver                                                        Annual quantity

Processing electronic orders    1,000,000 number of orders                                        500,000

Processing non electronic orders         2,000,000 number of orders                            400,000                                              

Picking orders                         3,000,000 number of different products orderd         800,000

Packaging orders                     1,500,000 number of items ordered                            50,000,000     

Returns                                                2,000,000 number of returns                           50,000

If all costs were assigned to customer based on the number of items orderd, what would be the cost per item ordered           

 

11. costa company has a capacity of 40,000 units and is currently selling 35,000 at $400 each.  Barton company has approached costa at buying 2000 units at only 300 each. The units would be packaged in bulk saving 20.00 per unit. When compared to the normal packaging cost. Normal cost has variable cost of  280 per unit. The annula fixed cost of 2,000,000 would be unaffected by the special order. what would be the impact on profits if costa was to accept the special order

- profits would increase by 40,000

-profits would increase by 60,000

-profits would decrease by 200,000

-profits would increase by 80,000

 

12.  a company has $7.00 per unit in variable cost and 4.80  in fixed cost at a volume of 50,000 units if the company mark up cost by 0.49. what price should be changed if 69,000 units are expected to be sold?        

13. customer profitability may result in

- dropping some customer that are unprofitable

-lowering price or offering incentive to profitable customers

- giving incentives to all customers to place orders online

All of the above         

 

14.       estrad company uses cost plus pricing with a 0.50 markup. The company is currently selling 100,000 units at $12.00per unit. Each unit has a variable cost of $6.00. in addition the company incurs $180,600 in fixed costs annually. If demand falls to 85,600 and the company wants to continue to earn 0.50 return. What price should the company charge?       

 

15. a new product is being designed by an engineering team at Golen security. Several managers and employees from the cost accounting department and marketing department are also on the team to evaluate the product and determine the cost using target costing methodology.  An analysis of similar product on the market suggests a price of $121 per unit. The company requires a profit of 0.26 of the selling price. How much is the target cost per unit.            

 

16. a company uses activity based costing marks up the direct cost of goods by 0.24 plus charges customers for indirect costs based on activities utilized by the customer.  Indirect costs are charged as follows: $7.20 per order placed. $3.10 per separate item ordered; $30.00 per return.  A customer places 10 orders with a total direct cost of 2,800. Orders 297 separate items  and makes 8 returns.  What will the customer be charged

 

17. a company uses activity based pricing

Cost pool                                            annual estimated cost driver                        annual driver quantity

Consultation                                        182,000 number of consultations        90 consultations

Administrative cost                             140,000 admin labor costs                  9,400 labor hours

Client service                                      94,000 number of clients                    120 clients

 

The firm had two consultations with this client and required 130 administrative labor costs. What additional cost will be charged to the customer 

Subject Mathematics
Due By (Pacific Time) 08/11/2014 12:00 am
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