Managerial accounting CT1

Module 04: Critical Thinking Assignment

Attached Files:

QT Rubric (74.104 KB)

Complete the following questions using Microsoft Excel. No other submission format is allowed. Review the grading rubric to confirm you are meeting the assignment requirements.

Consider the following information for Hamburg Corporation:

			Items	Units Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper
Beginning inventory	85,000
Units started during the year	1	55,000
Ending inventory	61,000

Inventory is 100% complete as to materials and 60% complete as to conversion.

Items

Materials	Conversion
Beginning costs (SAR)	4	25,000	686,000
Costs added during the period (SAR)	1,255,000		980,000

Using the WEIGHTED AVERAGE method:

1. Calculate the number of units completed during the period.
2. Calculate equivalent units for conversion during the period.
3. Calculate cost per equivalent units for materials.

Mannheim Corporation manufactures small camping tents and family camping tents. The estimated direct labor time to produce each type of tent is as follows:

Items

per tent

	Small		Family
Estimated tents produced	24,500	11,000
	Direct labor hours	2.5	4.5

Estimated overhead for the period = 1,300,000 SAR.

1. Compute the overhead cost assigned to each type of tent assuming direct labor hours are used to allocate overhead costs.

The controller is not satisfied with the traditional method of allocating overhead because he believes that most of the overhead costs relate to the family tent product line because of its complexity. He, therefore, developed the following three activity cost pools and related cost drivers to better understand the costs.

25,000

980,000

Activity Cost Pools	Expected Use of Cost Drivers	Estimated Overhead Costs (SAR)
Setting up machines	1,000 setups
Assembling	90,000 labor hours
Inspection	1,200 inspections	230,000

1. Calculate the activity-based overhead rates for these three cost pools.
2. Compute the cost that is assigned to each tent using activity-based costing system, given the following information.

ItemsSmallFamily

Direct labor hours

55,000

Expected Use of Cost Drivers per Product
Number of setups	130	825
29,000
Number of inspections	125	1,125

1. What do you believe the controller should do and why?

You must show your work for credit.