Knowledge Check Bluebean Incorporated produces two lines of coffee cups: espresso coffee cups and travel coffee mugs. The unit cost information is shown here. The company uses a traditional volume-based costing system and believes that the number of labor hours is the appropriate cost driver. Activity Cost Pool Selling price Direct materials Direct labor Units produced Direct labor hours Estimated total overhead costs Item Number 1-Predetermined overhead rate Item Number 2- Total manufacturing overhead allocated Item Number 3-Manufacturing cost per unit Item Number 4-Gross profit per unit Espresso Coffee Cups $ 20 $6 $2 10,000 units 10,000 hours $ 80,000 Travel Coffee Mugs $ 25 58 $5 4,000 units 6,000 hours Espresso Coffee Cups - Travel Coffee Mugs
Knowledge Check Bluebean Incorporated produces two lines of coffee cups: espresso coffee cups and travel coffee mugs. The unit cost information is shown here. The company uses a traditional volume-based costing system and believes that the number of labor hours is the appropriate cost driver. Activity Cost Pool Selling price Direct materials Direct labor Units produced Direct labor hours Estimated total overhead costs Item Number 1-Predetermined overhead rate Item Number 2- Total manufacturing overhead allocated Item Number 3-Manufacturing cost per unit Item Number 4-Gross profit per unit Espresso Coffee Cups $ 20 $6 $2 10,000 units 10,000 hours $ 80,000 Travel Coffee Mugs $ 25 58 $5 4,000 units 6,000 hours Espresso Coffee Cups - Travel Coffee Mugs
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 5CE: Roberts Company produces two weed eaters: basic and advanced. The company has four activities:...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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