Assessment 5 Instructions: Applying Activity-Based Costing

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cf_applying_activity_based_costing_template.xlsx
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Problem 1

BUS-FPX4061 - Managerial Accounting Principles
Assessment 5: Applying Activity-Based Costing Worksheet
Problem 1
Solve the given problem based on the following information. Input values
Conglomco Company's overhead costs are as follows: Company name Conglomco
Production Activity Indirect Labor ($) Indirect Materials ($) Other Overheads ($) Production Activity Indirect Labor ($) Indirect Materials ($) Other Overheads ($)
Grinding 325,000 Grinding 325,000
Sanding 130,000 Sanding 130,000
Product modification 700,000 Product modification 700,000
Electrical 250,000 Electrical 250,000
System calibration 600,000 System calibration 600,000
Activity Resources Activity Resources
Grinding 13,000 machine hours Grinding Machine hours 13,000
Sanding 13,000 machine hours Sanding Machine hours 13,000
Product modification 1,500 engineering hours Product modification Engineering hours 1,500
Electrical 17,000 direct labor hours Electrical Direct labor hours 17,000
System calibration 400 batches System calibration Batches 400
Each production activity can be classified into different levels:
·      Unit level
·      Batch level
·      Product level
·      Facility level
Classify the following activities into the appropriate levels.
Activity Level
Grinding
Sanding
Product modification
Electrical
System calibration

Problem 2

Problem 2
Solve the given problem based on the following information. Input values
JordanCompany's overhead costs are as follows: Company name Jordan
Production Activity Indirect Labor ($) Indirect Materials ($) Other Overheads ($) Production Activity Indirect Labor ($) Indirect Materials ($) Other Overheads ($)
Grinding 352,000 Grinding 352,000
Sanding 148,500 Sanding 148,500
Product modification 660,000 Product modification 660,000
Electrical 280,500 Electrical 280,500
System calibration 550,000 System calibration 550,000
Activity Resources Activity Resources
Grinding 13,000 machine hours Grinding Machine hours 13,000
Sanding 13,000 machine hours Sanding Machine hours 13,000
Product modification 1,500 engineering hours Product modification Engineering hours 1,500
Electrical 17,000 direct labor hours Electrical Direct labor hours 17,000
System calibration 400 batches System calibration Batches 400
Compute overhead rates for each activity and create cost pools as appropriate.
Round the answers to two decimal places.
Activity Equation Overhead rates
Grinding
Sanding
Product modification
Electrical
System calibration

Problem 3

Problem 3 Input values
Solve the given problem based on the following information.
Company name Jordan
JordanCompany's overhead costs are as follows:
Production Activity Indirect Labor ($) Indirect Materials ($) Other Overheads ($) Production Activity Indirect Labor ($) Indirect Materials ($) Other Overheads ($)
Grinding 352,000 Grinding 352,000
Sanding 148,500 Sanding 148,500
Product modification 660,000 Product modification 660,000
Electrical 280,500 Electrical 280,500
System calibration 550,000 System calibration 550,000
Activity Resources Activity Resources
Grinding 13,000 machine hours Grinding Machine hours 13,000
Sanding 13,000 machine hours Sanding Machine hours 13,000
Product modification 1,500 engineering hours Product modification Engineering hours 1,500
Electrical 17,000 direct labor hours Electrical Direct labor hours 17,000
System calibration 400 batches System calibration Batches 400
Job P and Job Q use the following resources:
Resources Job P Job Q
Resources Job P Job Q Batches 30 90
Batches 30 90 Engineering hours 26 32
Engineering hours 26 32 Machine hours 550 5,500
Machine hours 550 5,500 Direct labor hours 500 4,375
Direct labor hours 500 4,375
Job P Job Q
Job P Job Q Number of units 200 2,500
Number of units 200 2,500
Given the information in the table above, compute overhead costs for each job.
Round the overhead rates to two decimal places. Round all other numbers to the nearest dollar.
Activity Job P Job Q
Grinding
Polishing
Product modification
Providing power
System calibration
Total cost of job

Problem 4

Problem 4
Solve the given problem based on the following information. Input values
JordanCompany's overhead costs are as follows: Company name Jordan
Production Activity Indirect Labor ($) Indirect Materials ($) Other Overheads ($) Production Activity Indirect Labor ($) Indirect Materials ($) Other Overheads ($)
Grinding 352,000 Grinding 352,000
Sanding 148,500 Sanding 148,500
Product modification 660,000 Product modification 660,000
Electrical 280,500 Electrical 280,500
System calibration 550,000 System calibration 550,000
Activity Resources Activity Resources
Grinding 13,000 machine hours Grinding Machine hours 13,000
Sanding 13,000 machine hours Sanding Machine hours 13,000
Product modification 1,500 engineering hours Product modification Engineering hours 1,500
Electrical 17,000 direct labor hours Electrical Direct labor hours 17,000
System calibration 400 batches System calibration Batches 400
Job P and Job Q use the following resources: Resources Job P Job Q
Batches 30 90
Resources Job P Job Q Engineering hours 26 32
Batches 30 90 Machine hours 550 5,500
Engineering hours 26 32 Direct labor hours 500 4,375
Machine hours 550 5,500
Direct labor hours 500 4,375 Job P Job Q
Number of units 200 2,500
Job P Job Q
Number of units 200 2,500
What is the overhead cost per unit for Job P and Job Q?
Round the overhead rates and average cost per unit to two decimal places.
Round all other numbers to the nearest dollar.
Costs Job P Job Q
Total overhead cost of job / Number of units in job
Average overhead cost per unit

Problem 5

Problem 5 Input values
Solve the given problem based on the following information.
JordanCompany's overhead costs are as follows: Company name Jordan
Production Activity Indirect Labor ($) Indirect Materials ($) Other Overheads ($) Production Activity Indirect Labor ($) Indirect Materials ($) Other Overheads ($)
Grinding 352,000 Grinding 352,000
Sanding 148,500 Sanding 148,500
Product modification 660,000 Product modification 660,000
Electrical 280,500 Electrical 280,500
System calibration 550,000 System calibration 550,000
Activity Resources Activity Resources
Grinding 13,000 machine hours Grinding Machine hours 13,000
Sanding 13,000 machine hours Sanding Machine hours 13,000
Product modification 1,500 engineering hours Product modification Engineering hours 1,500
Electrical 17,000 direct labor hours Electrical Direct labor hours 17,000
System calibration 400 batches System calibration Batches 400
Job P and Job Q use the following resources:
Resources Job P Job Q
Resources Job P Job Q Batches 30 90
Batches 30 90 Engineering hours 26 32
Engineering hours 26 32 Machine hours 550 5,500
Machine hours 550 5,500 Direct labor hours 500 4,375
Direct labor hours 500 4,375
Job P Job Q
Job P Job Q Number of units 200 2,500
Number of units 200 2,500
Compute overhead costs for the units produced for Job P and Job Q.
Base the calculation on a plant-wide overhead rate that is based on direct labor hours.
Round all answers to the nearest dollar.
Activity Plant-Wide Rate
Grinding
Polishing
Product modification
Providing power
System calibration
Total overhead cost
Rate per direct labor hour
(Total overheads / Direct labor hours)
Overhead cost for a job = Total direct labor hours × Overhead rate
Job P
Job Q
Average overhead cost per unit = Overhead cost / Units in each job
Job P
Job Q