Duke Metal Works produces two types of metal lamps. Duke manufactures 24,000 basic lamps and 4,500 designer lamps. Its activity-based costing system uses two indirect-cost pools. One cost pool is for set up costs and the other for general manufacturing overhead. Duke allocates set up costs to the two lamps based on setup labor-hours and general manufacturing overhead costs on basis of direct manufacturing labor-hours. It provides the following budgeted cost information: (Click the icon to view the information.) Calculate the total budgeted costs of the basic and designer lamps using Duke's activity-based costing system. Begin by calculating the overhead rates for each of the two indirect-cost pools; set up costs and general manufacturing overhead. First select the formula, then enter the applicable amounts and calculate the rate. Begin with the overhead rate for set up costs. (Abbreviations used: MOH = Manufacturing Overhead.) Data table Direct materials per lamp Direct manufacturing labor-hours per lamp Direct manufacturing labor rate per hour Setup costs C Lamps produced per batch Setup-hours per batch General manufacturing overhead costs Budgeted setup rate per setup labor-hour Basic Lamps Designer Lamps $ 11 $ 0.4 hours $ 30 240 1 hour $ 12 0.7 hours 30 36 3 hours Total $ 114,000 $ 179,250 - X
Duke Metal Works produces two types of metal lamps. Duke manufactures 24,000 basic lamps and 4,500 designer lamps. Its activity-based costing system uses two indirect-cost pools. One cost pool is for set up costs and the other for general manufacturing overhead. Duke allocates set up costs to the two lamps based on setup labor-hours and general manufacturing overhead costs on basis of direct manufacturing labor-hours. It provides the following budgeted cost information: (Click the icon to view the information.) Calculate the total budgeted costs of the basic and designer lamps using Duke's activity-based costing system. Begin by calculating the overhead rates for each of the two indirect-cost pools; set up costs and general manufacturing overhead. First select the formula, then enter the applicable amounts and calculate the rate. Begin with the overhead rate for set up costs. (Abbreviations used: MOH = Manufacturing Overhead.) Data table Direct materials per lamp Direct manufacturing labor-hours per lamp Direct manufacturing labor rate per hour Setup costs C Lamps produced per batch Setup-hours per batch General manufacturing overhead costs Budgeted setup rate per setup labor-hour Basic Lamps Designer Lamps $ 11 $ 0.4 hours $ 30 240 1 hour $ 12 0.7 hours 30 36 3 hours Total $ 114,000 $ 179,250 - X
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 7E: The management of Nova Industries Inc. manufactures gasoline and diesel engines through two...
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Transcribed Image Text:Duke Metal Works produces two types of metal lamps. Duke manufactures 24,000 basic lamps and 4,500 designer lamps. Its activity-based costing system uses two indirect-cost pools. One cost
pool is for set up costs and the other for general manufacturing overhead. Duke allocates set up costs to the two lamps based on setup labor-hours and general manufacturing overhead costs on
basis of direct manufacturing labor-hours. It provides the following budgeted cost information:
(Click the icon to view the information.)
Calculate the total budgeted costs of the basic and designer lamps using Duke's activity-based costing system.
Begin by calculating the overhead rates for each of the two indirect-cost pools; set up costs and general manufacturing overhead. First select the formula, then enter the applicable amounts and
calculate the rate. Begin with the overhead rate for set up costs. (Abbreviations used: MOH = Manufacturing Overhead.)
Data table
=
Direct materials per lamp
Direct manufacturing labor-hours per lamp
Direct manufacturing labor rate per hour
Setup costs
Lamps produced per batch
Setup-hours per batch
General manufacturing overhead costs
Budgeted setup rate
per setup labor-hour
$
Basic Lamps Designer Lamps
11
0.4 hours
$
30
$
240
1 hour
$
12
0.7 hours
30
36
3 hours
Total
$ 114,000
$ 179,250
X
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