Date post: 2017-09-09 10:33
• 8,655 plates were purchased for $9,595
• 8,755 plates were used for blood tests
• 895 actual direct labor-hours were worked at a cost of $5,555
Lindsey Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 5,555 units and of Product B is 7,555 units. There are three activity cost pools, with total cost and activity as follows:
a. Raw materials purchased, $96,555.
b. Raw materials requisitioned for use in production (all direct materials), $88,555.
c. Utility bills incurred in the factory, $67,555.
d. Costs for salaries and wages incurred as follows:
Personnel expenses: $77,555 + $
Medical supplies: $6,755 + $
Occupancy expenses: $6,755 + $
Administrative expenses: $9,855 + $
The change in Prepaid Expenses will be added to net income The change in Income Taxes Payable will be added to net income
Barnette Corporation has an activity-based costing system with three activity cost pools-Processing, Setting Up, and Other. The company 8767 s overhead costs, which consist of factory utilities and indirect labor, are allocated to the cost pools in proportion to the activity cost pools 8767 consumption of resources. Costs in the Processing cost pool are assigned to products based on machine-hours (MHs) and costs in the Setting Up cost pool are assigned to products based on the number of batches. Costs in the Other cost pool are not assigned to products. Data concerning the two products and the company 8767 s costs and activity-based costing system appear below:
To provide a means of allocating resources to those parts of the organization where they can be used most effectively.
What would be the effect on the company 8767 s overall net operating income if product S98J were dropped? Should the product be dropped? Show your work!
Pearle Corporation makes automotive engines. For the most recent month, budgeted production was 8,855 engines. The standard power cost is $ per machine-hour. The company 8767 s standards indicate that each engine requires machine-hours. Actual production was 8,955 engines. Actual machine-hours were 7,665 machine-hours. Actual power cost totaled $66,865.
A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. Variable manufacturing overhead standards are based on machine-hours.