# Managerial accounting 1b ch17 | Accounting homework help

Managerial Accounting 1B

Financial and Managerial Accounting

Chapter 17

Exercise 17-6 Plantwide overhead rate L.O. P1

[The following information applies to the questions displayed below.]

 Textra Polymers produces parts for a variety of small machine manufacturers. Most products go through two operations, molding and trimming, before they are ready for packaging. Expected costs and activities for the molding department and for the trimming department for 2011 follow.

 Molding Trimming Direct labor hours 52,000 DLH 48,000 DLH Machine hours 30,500 MH 3,600 MH Overhead costs \$ 730,000 \$ 590,000

 Data for two special order parts to be manufactured by the company in 2011 follow:

 Part A27C Part X82B Number of units 9,800 units 54,500 units Machine hours Molding 5,100 MH 1,020 MH Trimming 2,600 MH 650 MH Direct labor hours Molding 5,500 DLH 2,150 DLH Trimming 700 DLH 3,500 DLH

1.Exercise 17-6 Part 1

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2.

Exercise 17-6 Part 2

 2 Determine the overhead cost assigned to each product line using the plantwide rate computed in part 1.(Round your intermediate calculations to 2 decimal places. Omit the “\$” sign in your response.)

 Product Overhead cost Part A27C Part X82B

3.

Exercise 17-7 Departmental overhead rates L.O. P2

 Textra Polymers produces parts for a variety of small machine manufacturers. Most products go through two operations, molding and trimming, before they are ready for packaging. Expected costs and activities for the molding department and for the trimming department for 2011 follow.

 Molding Trimming Direct labor hours 52,000 DLH 48,000 DLH Machine hours 30,500 MH 3,600 MH Overhead costs \$ 730,000 \$ 590,000

 Data for two special order parts to be manufactured by the company in 2011 follow:

 Part A27C Part X82B Number of units 9,800 units 54,500 units Machine hours Molding 5,100 MH 1,020 MH Trimming 2,600 MH 650 MH Direct labor hours Molding 5,500 DLH 2,150 DLH Trimming 700 DLH 3,500 DLH

 Required 1. Compute a departmental overhead rate for the molding department based on machine hours and a department overhead rate for the trimming department based on direct labor hours. (Round your answers to 2 decimal places. Omit the “\$” sign in your response.)

 2 Determine the total overhead cost assigned to each product line using the departmental overhead rates from requirement 1. (Round your intermediate calculations to 2 decimal places and final answers to whole dollar amount. Omit the “\$” sign in your response.)

 Product Molding Trimming Total overheadcost Part A27C Part X82B

 Product Overhead cost Part A27C Part X82B

4.

Exercise 17-9 Using the plantwide Overhead rate to assess prices L.O. A1, P1

 Real Cool produces two different models of air conditioners. The company produces the mechanical systems in their components department. The mechanical systems are combined with the housing assembly in its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow.

 Process Activity Overhead Cost Driver Quantity Components Changeover \$ 500,000 Number of batches 800 Machining 279,000 Machine hours 6,000 Setups 225,000 Number of setups 120 \$ 1,004,000 Finishing Welding \$ 180,300 Welding hours 3,000 Inspecting 210,000 Number of inspections 700 Rework 75,000 Rework orders 300 \$ 465,300 Support Purchasing \$ 135,000 Purchase orders 450 Providing space 32,000 Number of units 5,000 Providing utilities 65,000 Number of units 5,000 \$ 232,000

 Additional production information concerning its two product lines follows.

 Model 145 Model 212 Units produced 1,500 3,500 Welding hours 800 2,200 Batches 400 400 Number of inspections 400 300 Machine hours 1,800 4,200 Setups 60 60 Rework orders 160 140 Purchase orders 300 150

 Required 1. Using a plantwide overhead rate based on machine hours, compute the overhead cost per unit for each product line. (Round your intermediate calculations and final answers to 2 decimal places. Omit the “\$” sign in your response.)

 Product Overhead cost Model 145 Model 212

 2 Determine the total cost per unit for each products line if the direct labor and direct materials costs per unit are \$250 for Model 145 and \$180 for Model 212. (Round your intermediate and final answers to 2 decimal places. Omit the “\$” sign in your response.)

 Product Total cost Model 145 Model 212

 3 Assume if the market price for Model 145 is \$800 and the market price for Model 212 is \$470, determine the profit or loss per unit for each model. (Input all amounts as positive values. Round your intermediate and final answers to 2 decimal places. Omit the “\$” sign in your response.)

 Model 145 Model 212

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5.

Exercise 17-13 Using ABC for strategic decisions L.O. P1, P3

 Consider the following data for two products of Rowena Manufacturing.

 Product A Product B Number of units produced 10,000 units 2,000 units Direct labor cost(@\$24 per DLH) 0.20 DLH per unit 0.25 DLH per unit Direct materials cost \$ 2 per unit \$ 3 per unit

 Activity Overhead costs Machine setup \$ 121,000 Materials handling 48,000 Quality control 80,000 \$ 249,000

 Required 1. Using direct labor hours as the basis for assigning overhead costs, determine the total production cost per unit for each product line. (Round your answers to 2 decimal places. Omit the “\$” sign in your response.)

 Product A Product B Manufacturing cost per unit

 2 Assume if the market price for Product A is \$20 and the market price for Product B is \$60, determine the profit or loss per unit for each product. (Round your answers to 2 decimal places. Omit the “\$” sign in your response. Input all amounts as positive values.)

 Product A Product B

 3 Consider the following additional information about these two product lines. If ABC is used for assigning overhead costs to products, what is the cost per unit for Product A and for Product B? (Round your answers to 2 decimal places. Omit the “\$” sign in your response.)

 Product A Product B Number of setups required for production 10 setups 12 setups Number of parts required 1 part / unit 3 parts / unit Inspection hours required 40 hours 210 hours

 Product A Product B Manufacturing cost per unit

 4.1 Determine the profit or loss per unit for each product. (Round your answers to 2 decimal places. Input all amounts as positive values. Omit the “\$” sign in your response.)

 Product A Product B

Problem 17-1A Evaluating product line costs and prices using ABC L.O. P3

[The following information applies to the questions displayed below.]

 Healthy Day Company produces two beverages, PowerPunch and SlimLife. Data about these productsfollow.

 PowerPunch SlimLife Production volume 12,500 bottles 180,000 bottles Liquid materials 1,400 gallons 37,000 gallons Dry materials 620 pounds 12,000 pounds Bottles 12,500 bottles 180,000 bottles Labels 3 labels per bottle 1 label per bottle Machine setups 500 setups 300 setups Machine hours 200 MH 3,750 MH

 Additional data from its two production departments follow.

 Department Driver Cost Mixing department Liquid materials Gallons \$ 2,304 Dry materials Pounds 6,941 Utilities Machine hours 1,422 Bottling department Bottles Units \$ 77,000 Labeling Labels per bottle 6,525 Machine setup Setups 20,000

7.

Problem 17-1A Part 2

 2 What is the cost per bottle for PowerPunch and SlimLife? (Do not round intermediate calculations and round your final answers to 2 decimal places. Omit the “\$” sign in your response.)

 PowerPunch SlimLife Average cost per bottle

9.

Problem 17-1A Part 4

 4 What is the minimum price that the company should set per bottle of SlimLife?

 \$0.53 per bottle \$0.86 per bottle \$0.36 per bottle

 The price of SlimLife must cover the costs associated with the product, so the minimum price for this product is \$0.53 / bottle.