00 mode ii 9000 8000 13200 30200 mode iii 2000 4000

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Unformatted text preview: aterials Direct labor Manufacturing overhead Total $ $ Mode I 50.00 60.00 99.00 209.00 Mode II $ 90.00 80.00 132.00 $ 302.00 Mode III $ 20.00 40.00 66.00 $ 126.00 Additional information includes: Mode I Dr ive rs for dif f act ivit y cos t Direct labor (hr/board) S etup time (hr/run) Machine time (hr/board) Budgeted total Overhead: $3,894,000 Mode II 3 10 1 Mode III 4 10 1.25 2 10 2 Manufacturing overhead is determined as follows Wang 2013 16 Traditional, Volume-Based ProductCosting System Mode I 10,000 3 30,000 Units produced Direct labor (hr/unit) Total hours Mode II 20,000 4 80,000 Total hours required 118,000 Budgeted manufacturing overhead Budgeted direct-labor hours $3,894,000 118,000 Mode I Direct labor (hr/unit) Overhead rate per hour Overhead per unit Wang 2013 Mode III 4,000 2 8,000 $ $ = $33 per hour Mode II 3 33 99 $ $ 4 33 132 Mode III $ $ 2 33 66 17 Traditional, Volume-Based ProductCosting System With these product costs per unit, Aerotech established target selling prices (Cost × 125%). Direct materials Direct labor Manufacturing overhead Total Cost per unit Target selling price Wang 2013 $ $ $ Mode I 209.00 261.25 Mode II $ 302.00 377.50 Mode III $ 126.00 157.50 25 % ma rkup 209.00 x 1.25 Mode I Mode II Mode III 50.00 $ 90.00 $ 20.00 60.00 80.00 40.00 99.00 132.00 66.00 209.00 $ 302.00 $ 126.00 18 Aerotech Company Activity must be done on each unit produced. Overhead Costs Total budgeted cost = $3,894,000 Activity Cost Pools Unit Level Batch Level ProductSustaining Level Machinery cost pool $1,212,600 Setup cost pool $3,000 Engineering cost pool $700,000 Activity performed on each batch Wang 2013 produced. Activities needed to support an entire product line Identification of Activity Cost Pools Facility Level Facility cost pool $507,400 Activity required in order for the production process to occur. 19 Unit Level Batch Level ProductSustaining Level Machinery cost pool $1,212,600 Setup cost pool $3,000 Engineering cost pool $700,000 Facility cost pool $507,400 Informati on will be provided in exam whether cost is allocated a cost driver or by a percenta Receiving/Inspection cost pool $200,000 Facility Level Material Handling cost pool $600,000 Quality Assurance cost pool $421,000 Packaging/Shipping cost pool $250,000 Wang 2013 20 STAGE ONE—Machinery Various overhead costs related to machinery Wang 2013 Lubrication Depreciation Electricity Computer Support Activity cost pool Maintenance Calibration Machinery Cost Pool Total budgeted cost = $1,212,600 21 STAGE TWO—Machinery Calculate the pool rate Cost Assignment Wang 2013 Budgeted Machinery Costs = $1,212,600 Budgeted Machine Hours 4...
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This document was uploaded on 03/06/2014.

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