University:
Grand Rapids Community College
Course:
Financial and Managerial Accounting: Information for Decisions - John J. Wild
Academic year:

2024
Views:

341

Pages:

2
Author:

stud_ice13

These exercises involve calculating overhead allocation using various costing methods, including the plantwide overhead rate, departmental overhead rates, and activity-based costing (ABC). Here’s an outline to help you with each exercise: Exercise 17-1 to 17-4: Plantwide Overhead Rate Calculations 1. Plantwide Overhead Rate Formula: Plantwide Overhead Rate=Total Budgeted Overhead Cost For each model (standard or deluxe), find: o o Overhead Cost per Unit: Multiply the plantwide rate by the hours used per unit. Total Product Cost per Unit: Add direct material, direct labor, and allocated overhead. Exercise 17-5 to 17-8: Comparison Between Plantwide and Departmental Overhead Rates 1. Departmental Overhead Rate Formula: Departmental Overhead Rate=Departmental Overhead Cost 2. Allocating Overhead Using Departmental Rates: Multiply the rate by the hours each model/unit uses in that department. Exercise 17-9 to 17-13: Activity-Based Costing (ABC) 1. ABC Activity Rate Calculation: Activity Rate=Total Cost for the Activity 2. ABC Overhead Allocation: o Multiply the activity rate by the actual usage of each cost driver for a specific job or product. Exercises 17-14 to 17-26: ABC for Services, Customer Profitability 1. Service Provider ABC Allocation: Similar to manufacturing, identify cost pools (e.g., consultations, hours), calculate activity rates, and allocate based on usage. 2. Customer Profitability: Use allocated costs to compute the profitability of each customer by subtracting total allocated costs from revenues. If you need step-by-step calculations for specific questions or exercises, let me know which ones you’d like detailed!