Adelberg Company has two products (Graded A+) - use as a guide only - 19207

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arsalanahmed

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Usethefollowingtoanswerquestion11:

 

AdelbergCompanyhastwoproducts:Aand B.Theannualproductionand salesofProductAis500 unitsandofProductBis1,000units.Thecompanyhastraditionallyuseddirectlabor-hoursasthebasis forapplyingallmanufacturingoverheadtoproducts.ProductArequires0.4 directlaborhoursperunit andProductBrequires0.2directlaborhoursperunit.Thetotalestimatedoverheadfornextperiodis

$68,756.

Thecompanyisconsideringswitchingtoanactivity-basedcostingsystemforthepurposeofcomputing unitproductcostsforexternalreports.Thenewactivity-basedcostingsystemwouldhavethree

overheadactivitycostpools--Activity1,Activity2,andGeneralFactory--withestimatedoverheadcosts andexpectedactivityasfollows:


Estimated

Overhead


ExpectedActivity


ActivityCostPool           Costs        ProductA       ProductB       Total

Activity1                              $31,031            1,000                  300     1,300

Activity2                             $22,249            1,600                  300     1,900

GeneralFactory                    $15,476               200                  200        400

Total                                     $68,756

(Note:TheGeneralFactoryactivitycostpool'scostsareallocatedonthebasisofdirectlaborhours.)

 

11.Thepredeterminedoverheadrateunderthetraditionalcostingsystemisclosestto:

 

 

 

 

 

 

 

 

 

 

12.

The

 predeterminedoverheadrateunderthetraditionalcostingsystemis:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13.    ReachConsultingCorporationhasitsheadquartersinChicagoandoperatesfromthree branchofficesinPortland,Dallas,andMiami.Reach'sheadquarteractivitiesare assignedtotwoactivitycostpools:GeneralServiceandResearchService.Thesecosts arethenallocatedtothethreebranchoffices. Informationfornextyearrelatedtothis activity-basedcostingsystemisasfollows:

 

ActivityCostPool                ActivityMeasure                   Estimated

 

OverheadCost

Generalservice

%oftimedevotedtobranch

$700,000

Researchservice

Computertime

$140,000

 

Estimatedbranchdatafornextyearisasfollows:

 


%oftime devotedto branch


ComputerTime


Portland               30%             200,000minutes Dallas        60%             150,000minutes Miami            10%               50,000minutes

 

HowmuchoftheheadquarterscostallocationshouldDallasexpecttoreceivenext year?

 

 

 

 

 

 

 

 


 

 


 

 

Solution Description

A++++++++++

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