Docsity
Docsity

Prepare for your exams
Prepare for your exams

Study with the several resources on Docsity


Earn points to download
Earn points to download

Earn points by helping other students or get them with a premium plan


Guidelines and tips
Guidelines and tips

Product Cost Analysis: Model A vs. Model B, Study notes of Management Accounting

A detailed analysis of the production costs for model a and model b, including prime costs, direct labor hours, machine hours, production runs, inspection hours, maintenance hours, and overhead costs. The analysis is presented in both traditional and activity-based costing (abc) formats.

Typology: Study notes

2010/2011

Uploaded on 05/12/2011

skobus
skobus 🇺🇸

2 documents

1 / 2

Toggle sidebar

This page cannot be seen from the preview

Don't miss anything!

bg1
DATA
Product Data
Model A Model B Total
Units produced per year 30,000 300,000
Prime costs $100,000 $1,000,000
Directs labor hours 140,000 300,000 440,000
Machine hours 20,000 200,000 220,000
Production runs 40 60 100
Inspection hours 800 1,200 2,000
Maintenance hours 10,000 90,000 100,000
Total overhead costs:
Setup costs $180,000
Inspection costs 140,000
Machining 160,000
Maintenance 180,000
Total $660,000
Cost Activity Activity Rate
Setup costs $180,000 100 $1,800.00
Inspection costs 140,000 2,000 $70.00
Machining 160,000 220,000 $0.73
Maintenance 180,000 100,000 $1.80
Overhead rate:
$1.50
pf2

Partial preview of the text

Download Product Cost Analysis: Model A vs. Model B and more Study notes Management Accounting in PDF only on Docsity!

DATA

Product Data

  • Units produced per year 30,000 300, Model A Model B Total
  • Prime costs $100,000 $1,000,
  • Directs labor hours 140,000 300,000 440,
  • Machine hours 20,000 200,000 220,
  • Production runs
  • Inspection hours 800 1,200 2,
  • Maintenance hours 10,000 90,000 100,
    • Setup costs $180, Total overhead costs:
    • Inspection costs 140,
    • Machining 160,
    • Maintenance 180,
    • Total $660,
  • Setup costs $180,000 100 $1,800. Cost Activity Activity Rate
  • Inspection costs 140,000 2,000 $70.
  • Machining 160,000 220,000 $0.
  • Maintenance 180,000 100,000 $1. - Overhead rate: $1.

Traditional: Total Production Model A Model B Prime cost $100,000 $1,000, Overhead $210,000 $450, Total $310,000 $1,450, Unit Production Cost Model A Model B Prime cost $3.33 $3. Overhead $7.00 $1. Total $10.33 $4. Overhead Assignment: A B Total Traditional $210,000 $450,000 $660, ABC: ABC $166,001 $554,001 $720, Total Production Cost Model A Model B Prime $100,000 $1,000, Setup $72,000 $108, Inspection $56,000 $84, Machining $20,001 $200, Maintenance $18,000 $162, Total OH $166,001 $554, Unit Production Cost Model A Model B Prime $3.33 $3. Overhead $5.53 $1. Total $8.87 $5.