Overhead Costs with Traditional Costing on Stellar Stairs
Not what you're looking for?
Overhead costs using traditional costing and ABC.
(See attached file for full problem description)
(a) Predetermined...
$xxx ÷ xxx hrs. = $xx.xx per machine hour
(b) Manufacturing cost per stair under traditional costing:
Direct materials $xxx,000
Direct labor  xxx,000
Overhead (xxx X $xxx)  xxx,350
Total cost of 280 stairs $xxx,950
Cost per stair ($xxx ÷ 280)  $1,199.82
(c) Manufacturing cost per stair under activity-based costing:
Computation of Activity-Based Overhead Rate
Activity Cost Pool Estimated
Overhead
÷ Total
Estimated Drivers
= Activity-Based
Overhead Rate
Purchasing
Handling materials
Production
Setting up machines
Inspecting
Inventory control
Utilities $  xxx
   xxx
   xxx
   xxx
   xxx
   xxx
   xxx
$830,000     600 Orders
  8,000 Moves
100,000 D/L Hours
  1,250 Setups
  6,000 Inspections
 168,000 Components
 90,000 Sq. ft. $xx per order
$xx.xx per move
$x.xx per D/L hour
$xx per setup
$xx per inspection
$.xx per component
$x per sq. ft.
Assignment of Overhead to Order of 280 Stairs
Activity Cost Pool Expected
Use of Driver
X Activity-Based
Overhead Rate
=
Cost Assigned
Purchasing
Handling materials
Production
Setting up machines
Inspecting
Inventory control
Utilities     60 Orders
   800 Moves
5,000 D/L Hours
   100 Setups
   450 Inspections
 16,000 Components
 8,000 Sq. ft. $xx
$xx.xx
$x.xx
$xx
$xx
$.xx
$x $  xxx
  xxx
  xxx
  xxx
  xxx
  xxx
  xxx
Total overhead assigned $65,950
Chapter 4 Problem 4-3A (Continued)
Total manufacturing cost per stair under ABC:
Direct materials $  xxx
Direct labor    xxx
Overhead    xxx
Total cost of 280 stairs $  281,550
Total cost per stair $xxx
(d) The difference between the traditional cost and the activity-based cost per unit of $xxx or ($xxx vs. $xxx) is not great in amount but?xx.3%...
Purchase this Solution
Solution Summary
The solution has the activity based costing solution for Stellar Stairs.
Purchase this Solution
Free BrainMass Quizzes
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.