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A company was evaluating the activity based environmental cost of two different products Product X and Product Y Information on two environmental activities

A company was evaluating the activity-based environmental cost of two different products: Product X and Product Y. Information on two environmental activities is as follows:

 

Activity     Driver Cost

Maintaining pollution equipmentMaintenance hours$120,000

Toxic waste disposalKilograms of waste80,000

 

Data on Product X and Product Y follows:

 

     Product X    Product Y

Production costs (nonenvironmental)$400,000$500,000

Units produced100,000200,000

Maintenance hours for pollution equipment1,0004,000

Pounds of toxic waste10,00030,000

 

A.Assign the environmental activity costs to Product X and to Product Y.

B.Calculate the unit environmental cost of Product X.

C.Calculate the unit environmental cost of Product Y.

D.Calculate the overall unit cost of Product X.

E.Calculate the overall unit cost of Product Y.

 

 

 

17.Browning Manufacturing Company uses activity-based costing. The overhead budget for the coming period is $1,053,000, consisting of the following:

 

     Budgeted

Cost Pool    Amount

Supervision$   320,000

Machine usage420,000

Machine setups187,000

Design changes126,000

Totals$1,053,000

 

The potential allocation bases and their estimated amounts were as follows:

 

Allocation    Budgeted

Base  Amount

Number of design changes35

Number of setups110

Machine hours6,000

Direct labour hours10,000

 

A.Determine the overhead rate for each cost pool, using the most appropriate allocation base for each pool.

B.Job 80130 required $45,000 for direct materials, $20,000 for direct labour, 2,000 direct labour hours, 800 machine hours, five setups, and four design changes.  Determine the cost of Job 80130.

Mar 13 2020 View more View Less

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