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oksano4ka
5 days ago
6

Horgen Corporation manufactures two products: Product M68B and Product H27T. The company is considering implementing an activity

-based costing (ABC) system that allocates its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products M68B and H27T.
Activity Cost Pool Activity Measure Total Cost Total Activity
Machining Machine-hours $299,000 13,000 MHs
Machine setups Number of setups $240,000 400 setups
Product design Number of products $80,000 2 products
Order size Direct labor-hours $290,000 10,000 DLHs


Activity Measure Product Product
Machine-hours M68B H27T
Number of setups 6,000 7,000
Number of products 250 150
Direct labor-hours 4,000 6,000

Using the ABC system, how much total manufacturing overhead cost would be assigned to Product H27T?
a. $291,000
b. $174,000
c. S465,000
d. $454,500
Business
1 answer:
arsen [3.2K]5 days ago
7 0

Answer: $465,000

Explanation:

Activity-based costing (ABC) is employed to determine the total expenses associated with activities necessary for product creation. In an ABC system, each activity related to production is allocated a corresponding cost.

From the information in the question, the following deductions can be made:

Machining costs:

= 299,000/13,000 × 7,000

= 23 × 7,000

= $161,000

Machine setup costs:

= 240,000/400 × 150

= 600 × 150

= $90,000

Cost for product design:

= 80,000/2

= $40,000

Order size costs:

= 290,000/10,000 × 6,000

= 29 × 6,000

= $174,000

Total expenses = $161,000 + $90,000 + $40,000 + $174,000

= $465,000

Thus, the total overhead cost associated with Product H27T comes to $465,000.

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I hope this information is beneficial, and now you understand how to approach it. Wishing you a fantastic and joyful day! Also, enjoy the remainder of Black History Month!:-)

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Evaluate the current China/Taiwan logistics costs. Assume a current total volume of 190,000 CBM and that 89 percent is shipped d
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The overall expenditure for transporting the containers to the U.S. amounts to $2,594,930

Explanation:

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Total Current volume (CBM) = 190,000

Percentage shipped directly = 0.89

Volume shipped directly (CBM) = 169,100

Volume at consolidation center = 190,000 - 169,100 = 20,900

To compute the shipping expenses for the company as outlined below:

Shipping Cost calculations

Direct shipping by Container type (in Feet) 20 40

Volume (%) 0.21 0.79

Volume (CBM) = 169,100*0.21 =169,100*0.79

= 35,511 =133,589

Container capacity utilized 85% 85%

Container center by container type

Volume (%) = 100

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Container capacity used = 96%

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Containers shipped = 35,511/ (34*0.85) = 1,229

Shipping Cost per container = $480

Shipping Costs by container size ($) = 1,229*480 = $589,920

Container capacity (CBM) (67)

Containers shipped = 133,589/ (0.85*67) + 20,900/ (0.96*67) = 2,671

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Calculate the total shipping cost as follows:

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Number of centers = 4

Annual fixed cost per center = $75,000

Total annual fixed costs = $75,000*4 = $300,000

Variable cost per CBM = $4.9

Total annual variable cost = 20,900*$4.9 = $102,410

Total annual consolidation center expenses = $300,000+$102,410 = $402,410

Now compute the complete cost of moving containers to the U.S. as below:

Total Cost = Total Shipping Fees + Total Annual Consolidation center Expense

= $2,192,520 + $402,410

= $2,594,930

Thus, the entire cost involved in shipping the containers to the U.S. is $2,594,930.

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