Whiteley Inc. manufactures and sells two products: Product M5 and Product P4. Data concerning the expected production of each product and the expected total direct labor hours (DLH) required to produce that output appear below: Show
Expected 3,000 The direct labor rate is $27.50 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated $768,435 The unit product cost of Product P4 under activity-based costing is closest to ___________. Dobles Corporation has provided the following data from its activity-based costing system: Activity Cost Pools The company makes 420 units of product D28K a year, requiring a total of 460 machine hours, 80
orders, and 10 inspection-hours per year. The product's direct materials cost is $48.96 per unit, and its direct labor cost is $25.36 per unit. Students also viewedWhich approach to cost allocation is considered the most accurate?An activity-based costing system is considered more complex than using a single plantwide rate to allocate overhead, but an ABC system is also considered a more accurate way to allocate overhead costs.
Why is a company's selection of cost allocation methods important to individual managers?Cost allocation is an important planning tool for reducing costs and increasing profits. It can also be a cost motivator, giving managers incentives for making sure that costs are not accumulated carelessly. Managers will be more likely to operate their departments with greater efficiently.
What is the first step in the development of an activityStep 1: Identify the products that are the chosen cost objects. Step 2: Identify the direct costs of the products Step 2: Identify the direct costs of the products. Step 3: Select the activities and cost-allocation bases to use for allocating indirect costs to the products for allocating indirect costs to the products.
Which of the following does activity − based costing consider to be the fundamental cost object?Individual activities are the fundamental cost objects in activity-based costing. Activity-based costing first uses resource drivers to assign the costs of resources to individual activities and then it uses activity drivers to assign the cost of these activities to products or services (as final cost objects).
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