# Managerial Accounting 1B Ch17

Question
Managerial Accounting 1B

Financial and Managerial Accounting

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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

\$

730,000

\$

590,000

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

1.Exercise 17-6 Part 1
Required

1.

Compute the plantwide overhead rate using direct labor hours as the base.(Round your answer to 2 decimal places. Omit the “\$” sign in your response.)

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

Part A27C

Part X82B

3.xercise 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

\$

730,000

\$

590,000

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

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.)

Department

Molding

Trimming

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

cost

Part A27C

Part X82B

3.

Determine the overhead cost per unit for each product line using the departmental rate..(Round your answers to 2 decimal places. Omit the “\$” sign in your response.)

Product

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.

Additional production information concerning its two product lines follows.

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

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

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

Machine setup

\$

121,000

Materials handling

48,000

Quality control

80,000

\$

249,000

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.

Additional data from its two production departments follow.

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.

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