Razorback Remedies produces a natural allergy treatment in tablet form. The company sells large containers of 1,000 tablets to university health centers and small containers of 50 tablets to health food stores. The company is considering adopting an activity-based costing system and the accountant gathered the following information
Activity
Estimated Indirect Cost
Cost Driver
Estimated Activity
Materials handling
$350,000
Pounds
58,000 pounds
Packaging
500,000
Machine Hours
8,000
hours
Quality control
250,000
Number of Samples
6,000
samples
Total indirect costs
$1,100,000
Other production information follows:
Large Containers
Small Containers
Units produced
20,000
180,000
Weight in pounds
40,000
18,000
Machine hours
6,000
2,000
Number of samples
1,000
5,000
Questions
Razorback’s current system allocates indirect cost to products on the basis of machine hours. Calculate the predetermined overhead application rate per machine hour.
Use the overhead application rate per machine hour to compute the indirect cost applied to each product line (large containers and small containers). In addition, calculate the indirect cost per unit for large and small containers.
Assuming the company wants to convert to an activity-based system, calculate the cost per unit of cost driver for each activity in the first chart above.
Use the cost per unit of cost driver to compute the indirect cost applied to each product line (large containers and small containers). In addition, calculate the indirect cost per unit for large and small containers.
Compare the indirect activity-based cost per unit to the indirect cost per unit from the current (traditional) system. How have unit costs changed? Explain why the costs changed as they did.
Should Razorback convert to activity-based costing? Provide an appropriate justification for your decision.
Answers: 2
Business, 21.06.2019 18:20
Which of the following is intended to demonstrate to an employer the importance of cooperating with workers? a. a collective agreement. b. a stock offer. c. a boost in production. d. a work slowdown. 2b2t
Answers: 2
Business, 22.06.2019 13:30
Jose recently died with a probate estate of $900,000. he was predeceased by his wife, guadalupe, and his daughter, lucy. he has two surviving children, pete and fred. jose was also survived by eight grandchildren, pete’s three children, naomi, daniel, nick; fred’s three children, heather, chris and steve; and lucy’s two children, david and rachel. jose’s will states the following “i leave everything to my three children. if any of my children shall predecease me then i leave their share to their heirs, per stirpes.” which of the following statements is correct? (a) under jose’s will rachel will receive $150,000. (b) under jose’s will chris will receive $150,000. (c) under jose’s will nick will receive $100,000. (d) under jose’s will pete will receive $200,000.
Answers: 1
Business, 22.06.2019 16:10
Waterway company’s record of transactions for the month of april was as follows. purchases sales april 1 (balance on hand) 672 @ $6.00 april 3 560 @ $11.00 4 1,680 @ 6.08 9 1,568 @ 11.00 8 896 @ 6.41 11 672 @ 12.00 13 1,344 @ 6.51 23 1,344 @ 12.00 21 784 @ 6.61 27 1,008 @ 13.00 29 560 @ 6.79 5,152 5,936 (a) calculate average-cost per unit. (b) assuming that periodic inventory records are kept in units only, compute the inventory at april 30 using lifo and average-cost. (c) assuming that perpetual inventory records are kept in dollars, determine the inventory using (1) fifo and (2) lifo. (d) compute cost of goods sold assuming periodic inventory procedures and inventory priced at fifo.
Answers: 2
Business, 23.06.2019 01:00
Motonous corporation has completed its fiscal year and reported the following information. the company had current assets of $153,413, net fixed assets of $ 412,331, and other assets of $7,822. the firm also has current liabilities worth $65,314, long-term debt of $178,334, and common stock of $162,000. how much retained earnings does the firm have?
Answers: 2
Razorback Remedies produces a natural allergy treatment in tablet form. The company sells large cont...
Social Studies, 07.11.2021 09:10
Mathematics, 07.11.2021 09:10
Business, 07.11.2021 09:20
Social Studies, 07.11.2021 09:20
Mathematics, 07.11.2021 09:20
Mathematics, 07.11.2021 09:20
Chemistry, 07.11.2021 09:20
Advanced Placement (AP), 07.11.2021 09:30