Problem 6-12-Microsolt Edge https/ed gen Propiem b-12 The Ceradyne Shoppe is a n
ID: 340493 • Letter: P
Question
Problem 6-12-Microsolt Edge https/ed gen Propiem b-12 The Ceradyne Shoppe is a national bakery that is known for its strawberry cheesecake. It makes 12 different kinds of cheesecake as well as many other types of bakery the ABC cost pools: Strawberry Cheesecake: tem to assign manufacturing overhead to products. The following data relate to its strawberry cheesecake and Annual production 17,700 units $12 $2 Direct materials per unit Direct labor per unit Cost Pool Materials ordehing Materials inspection Equipment setup Quality control Other Total manufacturing overhead Cost $83,700 82,410 96,000 52,800 83,600 Cost Driver Number of purchase orders Number of receiving reports Number of setups Number of inspections Direct labor cost $398,510 Annual activity information related to cost drivers: Strawberry Cheesecak All Products 8,370 orders Cost Pool Materials ordering Materials inspection Equipment setup Quality control Other 90 410 receiving report 2,400 setups 2,400 inspections 180 $35,400 $2,090,000 direct labor r each of the five cost pools. (Round overhead rate for Other Cost Pool to 2 decimal places, e.g. 15,25.) O Type here to searchExplanation / Answer
STATEMENT SHOWING ACTIVITY RATE OF ACTIVITY POOL Activity Total Expected Activity ACTIVITY COST POOL Measures Overheads Activity Rate material Ordering Purchase orders 83700 8370 10 per order material inspection Reprts 82,410 410 201 per report equipment setup Setups 96,000 2,400 40 per setup Quality Control Inspections 52,800 2,400 22 per inspection Other Dirct labour cost 83,600 2,090,000 40% of Direct labour cost Overheads assigned: Material Ordering (90 orders @ 10) 900 Material Inspection(6 report @ 201) 1206 Equipment setup(3 setups @40) 120 Quality control (180 inspection@ 22) 3960 Other ($35400*40%) 14160 Total overheads 20346 Divide: Number of units 17700 OH per unit 1.15 Overhead assigned to Strawbeery cheesecake is $ 2034 Overheads per unit is $1.15 per r unit Total cost per unit is $ 15.15 per unit Computed as follows: material 12 labour 2 Overheads 1.15 Total cost 15.15 Overheads rate based on Diret labour cost $ Overheads rate: Estimated Overheads / Direct labour cost *100 ($ 398,510 /2090,000)*100 = 19.07% Overhad rate 19.07% of Direct Labour Directlabour cost $2 per unit Overhhead assigned 0.38 per unit