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MA Chapter 7 Questions (ABC SV Version )New

# MA Chapter 7 Questions (ABC SV Version )New - Chapter 7...

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Chapter 7 Questions Activity based Costing Question # 1 Gladmark Company produces two types of get well cards: scented and regular . Drivers for the four activities are as follows: Activities Scented Cards Regular Cards Inspection Hours Setup Hours Machine Hours Number of moves 40 50 200 225 160 50 600 75 Required Calculate the consumption ratio for the four drivers

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Question # 2 Suppose that a cardiology ward has gathered the following information for four nursing activities and two of patients: Activities Driver Patient Category Activity Rate ( \$) Normal Intensive Treating Patients Providing a hygienic care Responding to requests Monitoring patients Treatment Hygienic Hours Requests Monitoring Hours 5,000 5,000 30,000 20,000 20,000 11,000 50,000 180,000 4.00 5.00 2.00 0.75 Required 1- Determine the total nursing costs assigned to each patient category. 2- Output is measured in patient days. Assuming that the normal patient category uses 10,000 patient days and the intensive patient category uses 8,000 patient days, calculate the nursing cost per patient day for each type of patient .
Question # 3 Lumus Company manufactures refrigerators. Lumus produces all the parts necessary for its product except for one electronic component, which is purchased from two local suppliers: Vance Inc. and Foy Company. Both suppliers are reliable and seldom deliver late; however, Vance sells the component for \$24 per unit, while Foy sells the same component for \$21.50. Lumus purchased 80% of its component from Foy because of its lower price. The total annual demand is 2,000,000 components. To help assess the cost effect of the two components, the following data were collected for suppliers’ related activities and suppliers: 1- Activities Data Activities Cost Inspecting Components (sampling only) Rework products (due to failed component) Warranty work (due to failed component) 120,000 1,521,000 2,400,000 2- Supplier Data Transaction /activities Vance Inc. Foy Company Unit purchase price Units purchased Sampling Hours Rework Hours Warranty hours \$24 400,000 40 180 400 \$21.50 1,600,000 1960 2,820 7,600 Required 1. Calculate the cost per component for each supplier, taking into consideration the cost of the supplier- related activities and using the current prices and sales volume. Round the unit cost to two decimal places. 2. Suppose that lumus lose \$1,000,000 in sales per year because of the reputation effect of defective units attributable to fail component. Using warranty hours assign the cost of lost sales to each supplier. By how much would this change the cost of each supplier’s component ?

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Question # 4 The following six situations are independent a. A manual insertion process takes 30 minutes and 8 pounds of material to produce a product. Automating the insertion process requires 15 minutes of machine time and 7.5 pounds of material. The cost per labor hour is \$ 12, the cost per machine hour is \$8, and the cost per pound of materials is \$10.
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MA Chapter 7 Questions (ABC SV Version )New - Chapter 7...

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