[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
Required
1.
Compute the plantwide overhead rate using direct labor hours as the base. (Round your answer to 2 decimal places. Omit the “$” sign in your response.)
Plantwide overhead rate
rev: 03-04-11
2.
Exercise 17-6 Part 2
2.
Determine the overhead cost assigned to each product line using the plantwide rate computed in part 1.(Round your intermediate calculations to 2 decimal places. Omit the “$” 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 “$” sign in your response.)
Department
Overhead rate
Molding
Trimming
2.
Determine the total overhead cost assigned to each product line using the departmental overhead rates from requirement 1. (Round your intermediate calculations to 2 decimal places and final answers to whole dollar amount. Omit the “$” sign in your response.)
Product
Molding
Trimming
Total overhead 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
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
rev: 03-04-11
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.
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