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Publicado: 18 de octubre de 2012
COST ASSIGNMENT
A1. EXERCISE 1 Intermediate
A1.E1 Problem 1
A1.E1 Problem 2
A1.E1 Problem 3
A1.E1 Problem 4
A1.E1 PROBLEM 1: Calculation of overhead rates and a product costThe Jewell plant has two categories of overhead: maintenance and inspection. Costs expected for these categories for the coming year are as follows:
Total expectedmachine hours for all jobs during the year is 60,000, and the total expected number of inspections is 4,000.
Required:
a. Compute the total cost of the potential job using direct labourhours to assign overhead. Determine the bid price for the potential job.
Overhead: £ 1,980 Bid price: £ 11,646
b. Compute the total cost of the job using activity-based costing and theappropriate activity drivers. Determine the bid price if activity-based costing is used.
Total cost: £ 11,175 Bid price: £ 13,410
c. Prepare a memorandum to the plant managerrecommending a bid price for the potential job. Support your recommendation by explaining which costing method best reflects the actual cost of the job.
The price is the second best, because thatmethod of activity-based costing is more effective in setting and allocating in a more cost efficient and therefore better reflects the actual cost of the product and thus able to charge the priceworth the product.
A1. EXERCISE 1 – Cost Assignment
A1.E1 Problem 2: Overhead analysis, calculation of overhead rates and a product cost
Hunter Company manufactures two products (XXand YY). The overhead costs have been divided into four cost pools that use the following activity drivers:
[pic]
Required:
a. Compute the allocation rates for each of the activitydrivers listed.
| |Allocation rate |
|Number of Orders |£ 200 |
|Number of Setups...
A1. EXERCISE 1 Intermediate
A1.E1 Problem 1
A1.E1 Problem 2
A1.E1 Problem 3
A1.E1 Problem 4
A1.E1 PROBLEM 1: Calculation of overhead rates and a product costThe Jewell plant has two categories of overhead: maintenance and inspection. Costs expected for these categories for the coming year are as follows:
Total expectedmachine hours for all jobs during the year is 60,000, and the total expected number of inspections is 4,000.
Required:
a. Compute the total cost of the potential job using direct labourhours to assign overhead. Determine the bid price for the potential job.
Overhead: £ 1,980 Bid price: £ 11,646
b. Compute the total cost of the job using activity-based costing and theappropriate activity drivers. Determine the bid price if activity-based costing is used.
Total cost: £ 11,175 Bid price: £ 13,410
c. Prepare a memorandum to the plant managerrecommending a bid price for the potential job. Support your recommendation by explaining which costing method best reflects the actual cost of the job.
The price is the second best, because thatmethod of activity-based costing is more effective in setting and allocating in a more cost efficient and therefore better reflects the actual cost of the product and thus able to charge the priceworth the product.
A1. EXERCISE 1 – Cost Assignment
A1.E1 Problem 2: Overhead analysis, calculation of overhead rates and a product cost
Hunter Company manufactures two products (XXand YY). The overhead costs have been divided into four cost pools that use the following activity drivers:
[pic]
Required:
a. Compute the allocation rates for each of the activitydrivers listed.
| |Allocation rate |
|Number of Orders |£ 200 |
|Number of Setups...
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