Question : 155. Lemon Yellow Company produces children’s clothing that requires two : 1256561

 

155. 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 x $20 per DLH)

$4,000

Sewing Department  (2,000 DLH x $22 per DLH)

$44,000

Machine hours

 

Cutting Department

160 MH

Sewing Department

1,500 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 Department

Sewing

Department

Direct labor hours

16,000 DLH

175,000 DLH

Machine hours

3,200 MH

30,000 MH

Manufacturing overhead costs

$480,000

$240,000

Assume this jacket currently sells for $10. How much profit does the company make per jacket?

 

 

156. 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. 

 

 

Budgeted Activity

Activity Cost Pool

Budgeted Cost

 

Product A

 

Product B

 

Product C

Activity 1

$140,000

7,500

4,000

6,000

Activity 2

$54,000

2,500

2,000

1,500

Activity 3

$28,000

15,000

25,000

30,000

 

Compute the company’s activity rates under activity-based costing for each of the three activities.

 

 

 

157. 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: 

 

 

Budgeted Activity

Activity Cost Pool

Budgeted Cost

 

Product A

 

Product B

 

Product C

Activity 1

$425,000

1,700

680

1,870

Activity 2

$144,900

1,890

1,575

2,835

Activity 3

$85,000

2,400

1,000

1,600

Compute the company’s activity rates under activity-based costing for each of the three activities.

 

 

 

 

 

 

 

158. A company uses activity-based costing to determine the costs of its three products:  A, B, and C. The activity rates and activity levels for each of the company’s three activity cost pools are shown below. 

 

 

Budgeted Activity

Activity Cost Pool

 

Activity Rate

 

Product A

 

Product B

 

Product C

Activity 1

$19

700

1,150

650

Activity 2

$27

2,400

2,100

1,500

Activity 3

$62

600

1,350

1,050

Compute the company’s budgeted cost for each of the three activities under activity-based costing.