155. Lemon Yellow Company produces children’s clothing that requires two processes, cutting and sewing, to complete. The company is concerned about one product, a hooded jacket, which hasn’t been selling as well as it had in past years. Information related to the 20,000 jackets produced annually is shown in the following table:
Direct materials
|
$26,000
|
Direct labor
|
|
Cutting Department (200 DLH x $20 per DLH)
|
$4,000
|
Sewing Department (2,000 DLH x $22 per DLH)
|
$44,000
|
Machine hours
|
|
Cutting Department
|
160 MH
|
Sewing Department
|
1,500 MH
|
Lemon Yellow’s total expected overhead costs and related overhead data are shown below. The company uses departmental overhead rates based on direct labor hours in the Cutting Department and machine hours in the Sewing Department.
|
Cutting Department
|
Sewing
Department
|
Direct labor hours
|
16,000 DLH
|
175,000 DLH
|
Machine hours
|
3,200 MH
|
30,000 MH
|
Manufacturing overhead costs
|
$480,000
|
$240,000
|
Assume this jacket currently sells for $10. How much profit does the company make per jacket?
156. A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the company’s three activity cost pools are shown below.
|
|
Budgeted Activity
|
Activity Cost Pool
|
Budgeted Cost
|
Product A
|
Product B
|
Product C
|
Activity 1
|
$140,000
|
7,500
|
4,000
|
6,000
|
Activity 2
|
$54,000
|
2,500
|
2,000
|
1,500
|
Activity 3
|
$28,000
|
15,000
|
25,000
|
30,000
|
|
|
|
|
|
Compute the company’s activity rates under activity-based costing for each of the three activities.
157. A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity for each of the company’s three activity cost pools are shown in the following table:
|
|
Budgeted Activity
|
Activity Cost Pool
|
Budgeted Cost
|
Product A
|
Product B
|
Product C
|
Activity 1
|
$425,000
|
1,700
|
680
|
1,870
|
Activity 2
|
$144,900
|
1,890
|
1,575
|
2,835
|
Activity 3
|
$85,000
|
2,400
|
1,000
|
1,600
|
|
|
|
|
|
Compute the company’s activity rates under activity-based costing for each of the three activities.
158. A company uses activity-based costing to determine the costs of its three products: A, B, and C. The activity rates and activity levels for each of the company’s three activity cost pools are shown below.
|
|
Budgeted Activity
|
Activity Cost Pool
|
Activity Rate
|
Product A
|
Product B
|
Product C
|
Activity 1
|
$19
|
700
|
1,150
|
650
|
Activity 2
|
$27
|
2,400
|
2,100
|
1,500
|
Activity 3
|
$62
|
600
|
1,350
|
1,050
|
|
|
|
|
|
Compute the company’s budgeted cost for each of the three activities under activity-based costing.