Reference no: EM13753289
Task: Activity-Based Costing Problem
The Divine Cheesecake Shoppe is a national bakery that is known for its strawberry cheesecake. It also makes 12 different kinds of cheesecake as well as many other types of bakery items. It has recently adopted an activity-based costing system to assign manufacturing overhead to products. The following data relate to its strawberry cheesecake and the ABC cost pools:
Strawberry Cheesecake:
Annual Production 17,500 units
Direct Materials per unit $6
Direct Labor per unit $2
Cost Pool Cost Cost Driver
Materials ordering $72,000 # of purchase orders
Materials inspection $75,000 # of receiving reports
Equipment setup $105,000 # number of setups
Quality Control $69,000 # of inspections
Other $100,000 Direct Labor Costs
Total $421,000
Manufacturing Overhead
Cost Pool All Products Strawberry Cheesecake
Materials Ordering 8,000 orders 100
Material Inspection 375 receiving reports 60
Equipment Setup 3,000 setups 30
Quality Control 3,000 Inspections 150
Other $2,000,000 direct labor $35,000
1. Calculate the overhead rate per unit of activity for each of the five cost pools.
2. Calculate the total overhead assigned to the production of the strawberry cheesecake.
3. Calculate the overhead cost per unit for the strawberry cheesecake. Round to three decimal places
4. Calculate the total unit cost for the strawberry cheesecake. Round to three decimal places.
5. Suppose that the Divine Cheesecake Shoppe allocates overhead by a traditional production volume-based method using direct labor dollars as the allocation base and one cost pool.
a. Determine the overhead rate per direct labor dollar and the per unit overhead assigned to the strawberry cheesecake.
b. Discuss the difference in cost allocations between the traditional method and the activity-based costing approach. Round to three decimal places.
|
Calculate stews self-employment tax
: Stew is a self-employed surfboard-maker in 2014. His schedule C net income is $104,000 for the year. He also has a part time job and earns $8,500 in wages subject to FICA taxes. Calculate Stew's self-employment tax for 2014 using Schedule SE.
|
|
Apply against his first quarter estimated tax payment
: Harold Conners (Social Security number 785-23-9873) lives at 13234 DeMilo Drive, Houston, TX 77052, and is self-employed for 2014. He estimates his required annual estimated tax payment for 2014 to $6,544. He had a $674 overpayment of last year’s tax..
|
|
Hat is number of withholding allowances should phan claim
: Phan Mai is a single taxpayer with two dependent children under 17. Phan estimates her wages for the year will be $36,000 and her itemized deductions will be $11,000. Assuming Pha files as head of household. What is the number of withholding allowanc..
|
|
Master budget problem
: The Schrödinger Science Store operates a retail store in a local shopping mall. The results of operations for the fourth quarter of the past year are as follows: Sales and cost of sales are expected to increase by 15 percent in each of the next two q..
|
|
Activity-based costing problem
: The Divine Cheesecake Shoppe is a national bakery that is known for its strawberry cheesecake. It also makes 12 different kinds of cheesecake as well as many other types of bakery items. It has recently adopted an activity-based costing system to ass..
|
|
Determine gross profit
: Build a model to help a company determine gross profit. Gross profit is simply the excess of revenues over expenses. The company’s total costs contain both fixed and variable costs. Fixed costs are the same no matter how many units they sell, and var..
|
|
Description amount description amount
: A summary of the time tickets for August follows: Description Amount Description Amount Job No. 321 $11,000 Job No. 342 $8,300 Job No. 329 9,200 Job No. 346 5,700 Job No. 336 3,000 Present the journal entries to record (a) the labor cost incurred and..
|
|
What is the function of a credit rating agency
: What is the function of a credit rating agency and why have these agencies prospered- why do credit ratings under pip the world's financial system'?
|
|
Credit account titles are automatically indented
: Kohl Company lent $52,900 to Hemingway, Inc, accepting Hemingway's 2-year, $64,009, zero-interest-bearing note. The implied interest rate is 10.0%. Prepare Kohl's journal entries for the initial transaction, recognition of interest each year, and the..
|