Purchase Solution

Beeline Manufacturing Activity Based Costing

Not what you're looking for?

Ask Custom Question

Beeline Manufacturing produces two types of industrial ventilation machines: heavy-duty and standard. The assignment basis for overhead costs has always been direct labor hours. For 2013, Beeline compiled the following data for the two products:
Heavy-duty Standard
Sales in units 4,000 45,000
Sales price per unit $12,000.00 $9,900.00
Direct material and direct labor costs per unit $3,900.00 $3,100.00
Manufacturing overhead costs per unit $ 1,950.00 $2,350.00

Last year, Beeline purchased an expensive robotics system to allow for more complex products in the heavy-duty line. The CFO suggested that an ABC analysis could be valuable to help evaluate a product mix and promotion strategy for the next sales campaign. She obtained the following ABC information for 2013:

Activity Cost Driver Cost Total Deluxe Standard
Setups # setups $ 1,200,000 500 410 90
Machine-related # of machine hours $ 59,800,000 500,000 250,000 250,000
Packing # shipments $ 104,550,000 255,000 45,000 210,000

1. Using the current cost system based on direct labor hours, what is the estimated total cost of manufacturing one unit for each type of ventilation machine?

2. Using the current cost system based on direct labor hours, what is the estimated profit per unit for each type of machine?
3. Using the activity-based costing data presented above, compute the cost driver rate for each overhead activity.

4. Compute the revised manufacturing overhead cost per unit for the heavy-duty machine.

5. Compute the revised total cost to manufacture one unit of the heavy-duty machine.

6. Compute the revised profit on one unit of the heavy-duty machine.

Purchase this Solution
Solution Summary

Tutorial is attached in excel, click in cells to see computation. Shows schedules for finding rates, allocating costs, computing profit and MOH per unit.

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
Recent Feedback
  • "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
  • "Thank, this is more clear to me now."
  • "Awesome job! "
  • "ty"
  • "Great Analysis, thank you so much"
Purchase this Solution
Free BrainMass Quizzes
Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

View More Free Quizzes
Related BrainMass Solutions

  • Activity-based costing

    A) Traditional costing systems allocate both manufacturing costs and non-manufacturing costs B) Activity-based costing systems allocate only manufacturing costs C) Activity-based costing systems allocate both manufacturing costs and non-manufacturing

  • Alternative Forms of Costing

    124898 Alternative Forms of Costing Compare and contrast the alternative forms of costing: - Activity based costing (ABC) - Traditional Product Costing - Variable Costing - Absorption Costing Activity Based Costing Activity-Based Costing

  • Milton Manufacturing Overhead Activity Based Costing

    e.Determine the total cost of the proposed job if activity-based costing is used. f.Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.

  • Traditional Costing vs. Activity Based Costing

    Determine the unit product cost of the Deluxe and Standard products under the activity based costing system. Please see the attachment The solution explains how to calculate the product cost using traditional costing and activity based costing

  • Activity Based Costing

    The solution computes cost based on Activity Based Costing for Pitney Corporation.

  • Unit product cost under absorption costing

    to Product B under activity-based costing?

  • Evaluation of Activity-Based Costing

    497854 Evaluation of Activity-Based Costing 1. Discuss differences between activity-based costing and the traditional costing systems. 2. Discuss the reasons that activity-based costing may be resisted by top management. 3.

  • Activity-Based Costing vs. Traditional

    147950 Activity-Based Costing vs. Traditional Mission Bearings Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs).

  • Activity-based costing (ABC)?

    companies would probably improve its product costing accuracy most by converting to activity-based costing (ABC)?

View More Related Solutions