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Determining Activity Cost

# Determining Activity Cost

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"1) Determine the activity-cost-driver rate for packaging costs.
2) Using the ABC system, for the sugar cookie, compute the estimated overhead costs per thousand cookies.
3) Using the ABC system, for the sugar cookie, compute the estimated operating profit per thousand cookies.
5) Using a traditional system (with direct labor hours as the overhead allocation base) for the sugar cookie, compute the estimated operating profit per thousand cookies.
6) Explain the difference between the profits obtained from the traditional system and the ABC system. Which system provides a better estimate of profitability? Why?
"
"1) Determine the activity-cost-driver rate for packaging costs.
2) Using the ABC system, for the sugar cookie, compute the estimated overhead costs per thousand cookies.
3) Using the ABC system, for the sugar cookie, compute the estimated operating profit per thousand cookies.
5) Using a traditional system (with direct labor hours as the overhead allocation base) for the sugar cookie, compute the estimated operating profit per thousand cookies.
6) Explain the difference between the profits obtained from the traditional system and the ABC system. Which system provides a better estimate of profitability? Why?
"

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07/05/2013

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# Accounting

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14 \$0.02 \$0.000 \$360.000 \$0.15 \$0.20 \$0. Sugar. the information listed below is available: Projected sales in units PER UNIT data: Selling price Direct materials Direct labor Hours per 1000-unit batch: Direct labor hours Oven hours Packaging hours Macaroon 500.classof1. .Sub: Accounting Determining Activity Cost Question: Topic: Cost Accounting Aunt Ethel's Fancy Cookie Company manufactures and sells three flavors of cookies: Macaroon.000 \$150.000 cookies based on the size of the ovens and cookie molds owned by the company.02 2 1 0.5 1 1 0.75 \$0. The batch size for the cookies is limited to 1.5 Total overhead costs and activity levels for the year are estimated as follows: Activity Direct labor Oven Packaging Overhead costs \$210.000 Activity levels 2.000 Butter cream 600.900 Oven Hours 950 Packing Hours Questions: 1) Determine the activity-cost-driver rate for packaging costs.400 Hours 1.5 1 1 0.com/homework-help/accounting *The Homework solutions from Classof1 are intended to help students understand the approach to solving the problem and not for submitting the same in lieu of their academic submissions for grades. www. and Butter cream.80 \$0.000 Sugar 800. Based on budgetary projections.60 \$0.04 \$0.

000 2.000 \$150.80 \$0. .14 \$0.classof1.com/homework-help/accounting *The Homework solutions from Classof1 are intended to help students understand the approach to solving the problem and not for submitting the same in lieu of their academic submissions for grades.000 Activity levels Computation of activity-cost-driver rate for packaging costs www.02 \$0.60 \$0.000 cream 600.5 1 1 0.04 \$0.15 \$0.5 \$0.5 Overhead costs Direct labor Oven \$210.900 Hours Oven Hours Packing Packaging 1) \$360.000 950 Hours 1 1 0.75 \$0.Sub: Accounting Solution: Actual Values: Topic: Cost Accounting Butter Macaroon Sugar Projected sales in units PER UNIT data: Selling price Direct materials Direct labor Hours per 1000-unit batch: Direct labor hours Oven hours Packaging hours Activity 2 1 0.000 800.02 500.400 1.20 \$0.