Maurice Tutor

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About Maurice Tutor

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Algebra,Applied Sciences,Biology,Calculus,Chemistry,Economics,English,Essay writing,Geography,Geology,Health & Medical,Physics,Science Hide all
Teaching Since: May 2017
Last Sign in: 402 Weeks Ago, 6 Days Ago
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Education

  • MCS,PHD
    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

Experience

  • Professor
    Phoniex University
    Oct-2001 - Nov-2016

Category > Accounting Posted 26 Jul 2017 My Price 4.00

Flavorland Brands

The question is about activity based costing involving calculation of allocating cost by activity rates. Flavorland Brands packages single-sized servings of sugar and sugar substitute for fast food restaurants. The activities required to package sugar are fewer and less complex than for sugar substitute. The direct costs of producing the two products are as follows: Sugar Sugar Substitute Direct materials $0.01 $0.02 Direct labor $0.02 $0.04 Overhead is currently assigned to the two products on the basis of machine hours. The following information is provided regarding overhead costs: COST DRIVER DATA ACTIVITY TRACEABLE COST SUGAR SUGAR COSTS DRIVER LINE SUB LINE TOTAL Setup $75,000 Number of setups 50 100 150 Packing $125,000 Number of machine hours 10,000 15,000 25,000 Inspection $25,000 Number of batches 200 300 500 Required 1) Compute the predetermined overhead rate under the current method of overhead cost allocation. How much total overhead cost will be assigned to each product under the current system? 2) Compute the three activity rates that would be used in an activity-based system. How much total overhead cost will be assigned to each product under an ABC system? 3) Assuming an ABC system to be more precise, by how much does the company’s current costing system over or under cost the products? Be specific.

Answers

Maurice Tutor
(5)
Status NEW Posted 26 Jul 2017 03:07 PM My Price 4.00

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