5e sol04-16 - Rate 6 Receiving $200,000 Number of orders...

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Cost Management Hansen and Mowen Prob 4-16 Name: SOLUTION Enter the appropriate amounts in the shaded cells in columns E, G, I, and L. 1) Calculation of overhead rate Overhead rate = Total overhead = $3,000,000 = $30.00 per DLH Total DLH 100,000 Cost per unit Standard Deluxe Prime costs: Standard 20,000 units x $150.00 $3,000,000 Deluxe 10,000 units x $350.00 $3,500,000 Applied overhead: Standard 50,000 DLH x $30.00 1,500,000 Deluxe 50,000 DLH x $30.00 1,500,000 Total cost $4,500,000 $5,000,000 Divided by units produced 20,000 10,000 Cost per unit $225.00 $500.00 2) Cost pools and pool rates Cost driver Activity rate Rate 1: Maintenance $400,000 Maintenance hours 20,000 = $20.00 Total Rate 2: Engineering support $600,000 Engineering hours 30,000 $20.00 Rate 3: Materials Handling $800,000 Number of moves 40,000 = $20.00 Rate 4: Setups $500,000 Number of setups 400 = $1,250.00 Rate 5: Purchasing $300,000 Number of requisitions
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Unformatted text preview: # Rate 6: Receiving $200,000 Number of orders 5,000 = $40.00 # Rate 7: Paying Supplier $200,000 Number of orders 5,000 = $40.00 # Cost per unit Standard Deluxe 3) Prime costs: $3,000,000 $3,500,000 Applied overhead: Rate 1: Standard $20 x 4,000 80,000 # Deluxe $20 x 16,000 320,000 # Rate 2: Standard $20 x 9,000 180,000 # Deluxe $20 x 21,000 420,000 # Rate 3: Standard $20 x 10,000 200,000 # Deluxe $20 x 30,000 600,000 # Rate 4: Standard $1,250 x 40 50,000 # Deluxe $1,250 x 360 450,000 # Rate 5: Standard $200 x 500 100,000 # Deluxe $200 x 1,000 200,000 # Rate 6: Standard $40 x 2,000 80,000 # Deluxe $40 x 3,000 120,000 # Rate 7: Standard $40 x 2,500 100,000 # Deluxe $40 x 2,500 100,000 # Total cost $3,790,000 $2,210,000 Divided by units produced 20,000 10,000 # Cost per unit (ABC) $189.50 $221.00 # Cost per unit (FBC) $225.00 $500.00 #...
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