Question :
177.Rising Sun, Inc. produces granola that requires two processes, mixing : 1258541
177.Rising Sun, Inc. produces granola that requires two processes, mixing and baking, to complete. The best-selling type of granola is cherry almond delight. Information related to the 100,000 units of cherry almond delight produced annually is shown in the following table:
Direct materials$230,000
Direct labor
Mixing Department (600 DLH × $24 per DLH)$14,400
Baking Department (400 DLH × $22 per DLH)$8,800
Machine hours
Mixing Department200 MH
Baking Department300 MH
Rising Sun’s total expected overhead costs and related overhead data are shown below. The company uses departmental overhead rates based on machine hours in the mixing department and direct labor hours in the baking department.
Mixing DepartmentBaking Department
Direct labor hours11,000 DLH5,000 DLH
Machine hours4,000 MH3,000 MH
Manufacturing overhead costs$80,000$12,500
Determine the total product cost of this product line and each unit of cherry almond delight.
178.Slosh, Inc. produces washing machines that require two processes, assembling and finishing, to complete. The company’s bestselling machine is the commercial washer. Information related to the 500 commercial washers produced annually is shown below.
Direct materials$161,000
Direct labor
Assembling Department (1,000 DLH × $25 per DLH)$25,000
Finishing Department (250 DLH × $22 per DLH)$5,500
Machine hours
Assembling Department1,500 MH
Finishing Department400 MH
Slosh’s total expected overhead costs and related overhead data are shown below. The company uses departmental overhead rates based on direct labor hours in the Assembling Department and machine hours in the Finishing Department.
AssemblingDepartmentFinishingDepartment
Direct labor hours50,000 DLH275,000 DLH
Machine hours37,500 MH8,000 MH
Manufacturing overhead costs $4,000,000$60,000
179.Lemon Yellow Company produces children’s clothing that requires two processes, cutting and sewing, to complete. The company is concerned about one product, a hooded jacket, which hasn’t been selling as well as it had in past years. Information related to the 20,000 jackets produced annually is shown in the following table:
Direct materials$26,000
Direct labor
Cutting Department (200 DLH × $20 per DLH)$4,000
Sewing Department (2,000 DLH × $22 per DLH)$44,000
Machine hours
Cutting Department160 MH
Sewing Department1,500 MH
Lemon Yellow’s total expected overhead costs and related overhead data are shown below. The company uses departmental overhead rates based on direct labor hours in the Cutting Department and machine hours in the Sewing Department.
Cutting DepartmentSewing Department
Direct labor hours16,000 DLH175,000 DLH
Machine hours3,200 MH30,000 MH
Manufacturing overhead costs $480,000$240,000
Assume this jacket currently sells for $10. How much profit does the company make per jacket?
Cutting Dept. overhead: $480,000/16,000 DLH = $30 per DLH $30 per DLH × 200 DLH = $6,000 for the hooded jacket product line Sewing Dept. overhead: $240,000/30,000 MH = $8 per MH $8 per MH × 1,500 MH = $12,000 for the hooded jacket product line180.A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the company’s three activity cost pools are shown below.
181.A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the company’s three activity cost pools are shown in the following table:
