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    Theories Problems

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    Fernando III Perez
    The document contains information about various companies and their activity cost pools and overhead rates. Radakovich Corporation's activity cost pools are assembly, processing orders, and inspection. ABC Co.'s quality control activities and their associated costs are described. It also provides information on the average number of components needed per unit and the potential cost savings from purchasing higher quality components. Additional sections provide financial data for JRD Co., Tulip Co., XYZ Co., and XYC Co.

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    Theories Problems

    Uploaded by

    Fernando III Perez
    21 views6 pages
    The document contains information about various companies and their activity cost pools and overhead rates. Radakovich Corporation's activity cost pools are assembly, processing orders, and inspection. ABC Co.'s quality control activities and their associated costs are described. It also provides information on the average number of components needed per unit and the potential cost savings from purchasing higher quality components. Additional sections provide financial data for JRD Co., Tulip Co., XYZ Co., and XYC Co.

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    THEORIES PROBLEMS

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    The document contains information about various companies and their activity cost pools and overhead rates. Radakovich Corporation's activity cost pools are assembly, processing orders, and inspection. ABC Co.'s quality control activities and their associated costs are described. It also provides information on the average number of components needed per unit and the potential cost savings from purchasing higher quality components. Additional sections provide financial data for JRD Co., Tulip Co., XYZ Co., and XYC Co.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    21 views6 pages

    Theories Problems

    Uploaded by

    Fernando III Perez
    The document contains information about various companies and their activity cost pools and overhead rates. Radakovich Corporation's activity cost pools are assembly, processing orders, and inspection. ABC Co.'s quality control activities and their associated costs are described. It also provides information on the average number of components needed per unit and the potential cost savings from purchasing higher quality components. Additional sections provide financial data for JRD Co., Tulip Co., XYZ Co., and XYC Co.

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    THEORIES

    RADAKOVICH CORPORATION
    ACTIVITY COST POOL TOTAL COST TOTAL ACTIVITY ASSEMBLY
    ASSEMBLY ₱ 436,240.00 28,000 MACHINE HOURS
    PROCESSING ORDER ₱ 60,896.00 1,600 ORDERS
    INSPECTION ₱ 82,767.00 1,410 INSPECTION HOURS

    PRODUCTION F60/YEAR TOTAL MACHINE HOURS


    230 UNITS 480
    ORDERS INSPECTION-HOURS/YEAR
    50 30
    DIRECT MATERIAL COST DIRECT LABOR COST
    12.7 45.93
    PRODUCT SELSS
    126.6

    SALES 230*126.60
    COST OF GOODS SOLD
    DIRECT MATERIAL COST 230*12.70 ₱ 2,921.00
    DIRECT LABOR COST 230*45.93 ₱ 10,563.90
    MANUFACTURING OVERHEAD
    ASSEMBLY 480*15.58 ₱ 7,478.40
    PROCESSING ORDER 50*38.06 ₱ 1,903.00
    INSPECTION 30*58.7 ₱ 1,761.00
    PRODUCT MARGIN

    ABC CO.
    QUALITY CONTROL ACTIVITIES ACTIVITIES COST TOTAL INTERNAL FAILURE COST
    PROCESS AUDITS ₱ 50,000.00
    TRAINING OF MACHINE OPERATORS ₱ 27,000.00
    PROCESSING RETURNED PRODUCTS ₱ 18,000.00
    SCRAP PROCESSING ₱ 24,000.00 ₱ 24,000.00
    REWORK ₱ 8,000.00 ₱ 8,000.00
    PREVENTATIVE MAINTENANCE ₱ 30,000.00
    PRODUCT DESIGN ₱ 46,000.00
    WARRANTY WORK ₱ 12,000.00
    FINISHED GOODS INSPECTION ₱ 22,000.00
    TOTAL ₱ 32,000.00

    Each unit of a product requires four components. The average number of components is 4.25 due to component failure.
    Purchasing higher quality components can reduce the average number of components to four per unit. The cost per compone
    Calculate the reduction in failure costs per unit due to purchasing higher quality components.
    AVE. NUMBER OF COMPONENTS ₱ 4.25
    HIGHER QUALITY AVE. # COMPONENTS 4
    REDUCTION 0.25
    MULTIPLY BY: COST PER COMPONENTS ₱ 350.00
    reduction in failure costs per unit ₱ 87.50

    ABC CO. 2019


    PURCHASING COMPONENTS ₱ 50,000.00
    PURCHASE ORDERS 500

    PURCHASE ORDERS ₱ 250.00


    ENTAIL COST ₱ 27,500.00

    INSPECTION TIME ₱ 10,000.00


    2 INSPECTORS ₱ 120,000.00
    SUPPLIES COSTING 2
    COST RELATED TO REWORKING ₱ 30,000.00
    PERFORMING WARRANTY WORK ₱ 60,000.00
    WARRANTY COST FOR COMPETITORS ₱ 30,000.00

    JRD CO. FILLING ORDERS


    WAGES AND SALARIES 580000 15%
    OTHER EXPENSES 120000 55%

    FILLING ORDERS 2000


    CUSTOMER SUPPORT 20

    WAGES AND SALARIES COST RATE COST


    ALLOCATED TO FILLING ORDERS 15% 580000
    ALLOCATED TO CUSTOMER SUPPORT 75% 580000
    TOTAL

    TULIP CO. MAKING BOUQUETS


    WAGES AND SALARIES ₱ 70,000.00 70%
    OTHER EXPENSES ₱ 60,000.00 45%

    WAGES AND SALARIES ₱ 70,000.00 70%


    OTHER EXPENSES ₱ 60,000.00 45%
    TOTAL

    TOTAL OH COST PER BOUQUET


    XYZ CO.
    ACTIVITY COST POOLS EST. OVERHEAD COST TOTAL EXPECTED ACTIVITY
    MACHINE RELATED ₱ 242,100.00 9,000.00
    BATCH SET UP ₱ 713,900.00 11,000.00
    GENERAL FACTORY ₱ 256,500.00 9,000.00
    TOTAL ₱ 1,212,500.00 29,000.00

    XYC CO.
    PARTICULARS PRODUCT A PRODUCT B
    PRODUCTION VOLUME 2500 10000
    DIRECT LABOR HOURS 5000 20000
    SETUP COST/BATCH ₱ 1,000 ₱ 2,000
    BATCH SIZE 100 50
    TOTAL SETUP COSTS ₱ 20,000 ₱ 40,000
    ₱ 29,118.00

    ₱ 24,627.30
    ₱ 4,490.70

    TOTAL PREVENTION COST

    ₱ 27,000.00

    ₱ 30,000.00
    ₱ 46,000.00

    ₱ 103,000.00

    5 due to component failure.


    ur per unit. The cost per component is P350.
    CUSTOMER SUPPORT OTHER
    75% 10%
    25% 20%

    TOTAL COST TOTAL ACTIVITY ACTIVITY RATE TOTAL ACTIVITY ABC COST
    87000 2000 43.5 7 304.5
    435000 20 21750 1 21750
    522000 $ 22,055

    DELIVERY OTHER TOTAL


    20% 10% 100%
    25% 30% 100%

    ₱ 49,000.00
    ₱ 27,000.00
    ₱ 76,000.00
    40000
    ₱ 1.90
    COST DRIVER RATE PRODUCT X TOTAL
    ₱ 26.90 6,000.00 ₱ 161,400.00
    ₱ 64.90 6,000.00 ₱ 389,400.00
    ₱ 28.50 1,000.00 ₱ 28,500.00
    ₱ 120.30 13,000.00 ₱ 579,300.00

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