Question : 100. The Valhalla Company manufactures small lamps and desk lamps. The : 1239670

 

100. The Valhalla Company manufactures small lamps and desk lamps. The following shows the activities per product: 

 

Setups

Inspections

Assembly (DLH)

Small Lamps – 8,000 units

10,000

32,000

8,000

Desk Lamps – 16,000 units

30,000

14,000

46,000

 

 

 

 

 

 

 

 

Using the following information prepared by the Valhalla Company, determine (a) the activity rates for each activity and (b) the activity-based factory overhead per unit for each product.

Activity Pool

Activity Base

Budgeted Amount

Setups

40,000

$160,000

Inspections

46,000

$230,000

Assembly (DLH)

54,000

$324,000

 

 

 

 

 

 

 

 

 

101. Tibet Company sells glasses, fine china, and everyday dinnerware. They use activity-based costing to determine the cost of the shipping and handling activity. The shipping and handling activity has an activity rate of $7 per pound. A box of glasses weighs 2 lbs, the box of china weighs 4 lbs, and a box of everyday dinnerware weighs 6 lbs. (a) Determine the shipping and handling activity for each product and (b) determine the total shipping and receiving costs for the china if 3,500 boxes are shipped. 

 

 

 

 

 

102. The Beauty Beyond Words Salon uses an activity-based costing system in its beauty salon to determine the cost of services. The salon has determined the costs of services by activity as follows: 

Activity

Activity Rate

Hair Washing

$3.00

Conditioning

$3.50

Chemical Treatment

$25.00

Styling

$10.00

 

 

 

 

Hair Washing

Conditioning

Chemical Treatment

Styling

Hair Cut

1

1

0

0

Complete Style

1

1

0

1

Perms

2

3

1

1

Hi-Lights

3

4

2

1

 

 

 

 

 

Calculate the cost of services for a Hi-light. 

 

 

 

 

 

103. Bugaboo Co. manufactures three types of cookies: Fluffs, Crinkles, and Snaps. The production process is relatively simple, and factory overhead costs are allocated to products using a single plantwide factory rate based on direct labor hours. Information for the month of May, Bugaboo’s first month of operations, follows: 

 

BudgetedUnit Volume

Direct LaborHours per unit

Fluffs

80,000 boxes

0.10

Crinkles

60,000 boxes

0.20

Snaps

20,000 boxes

0.50

 

 

 

Bugaboo has budgeted direct labor costs for May at $8.50 per hour. Budgeted direct materials costs for May are: Fluffs, $0.75/unit; Crinkles $0.40/unit; and Snaps $0.30/unit.Bugaboo’s budgeted overhead costs for May are: 

Indirect labor

$280,000

Utilities

65,000

Supplies

45,000

Depreciation

    30,000

Total

$420,000

 

 

Assume that Bugaboo sells all the boxes it produces in May. 

(a)

Compute Bugaboo’s plantwide factory overhead rate for May.

 

 

(b)

Compute May’s product cost for each type of cookie.

 

 

(c)

Does Bugaboo’s use of a plantwide factory overhead rate in any way distort May’s product costs?

 

 

 

 

 

 

 

 

 

 

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