cost accounting excel, accounting assignment help

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Kitchen Supply, Inc. (KSI), manufactures three types of flatware: institutional, standard, and silver. It applies all indirect costs according to a predetermined rate based on direct labor-hours. A consultant recently suggested that the company switch to an activity-based costing system and prepared the following cost estimates for year 2 for the recommended cost drivers. Activity Recommended Cost Driver Estimated Cost Processing orders Number of orders $ 54,000 Estimated Cost Driver Activity 200 orders Setting up production Number of production runs 216,000 100 runs Handling materials 360,000 120,000 pounds Pounds of materials used Machine depreciation and maintenance Machine-hours 288,000 12,000 hours Performing quality control 72,000 45 inspections Number of inspections Packing Number of units 144,000 Total estimated cost 480,000 units $1,134,000 In addition, management estimated 7,500 direct labor-hours for year 2. Assume that the following cost driver volumes occurred in January, year 2: Institutional Number of units produced Direct materials costs Standard Silver 60,000 $39,000 24,000 $24,000 Direct labor-hours 450 450 Number of orders 12 9 3 15,000 3 6,000 6 3,000 580 140 80 3 3 3 60,000 24,000 Number of production runs Pounds of material Machine-hours Number of inspections Units shipped Actual labor costs were $15 per hour. Required 9,000 15,000 600 6 9,000 a. Compute a predetermined overhead rate for year 2 for each cost driver using the estimated costs and estimated cost driver units prepared by the consultant. Also compute a predetermined rate for year 2 using direct labor-hours as the allocation base. b. Compute the production costs for each product for January using direct labor-hours as the allocation base and the predetermined rate computed in requirement (a). c. Compute the production costs for each product for January using the cost drivers recommended by the consultant and the predetermined rates computed in requirement (a). (Note: Do not assume that total overhead applied to products in January will be the same for activity-based costing as it was for the labor-hour-based allocation.) d. Management has seen your numbers and wants an explanation for the discrepancy between the product costs using direct labor-hours as the allocation base and the product costs using activity-based costing. Write a brief response to management. Student Name: Instructor Class: McGraw-Hill/Irwin Problem 09-51 KITCHEN SUPPLY, INC. Part a. Activity Processing orders Setting up production Handling materials Using machines Performing quality control Packing Total estimated overhead Estimated Costs $ 54.000 216.000 360.000 288.000 72.000 144.000 $ 1.134.000 Cost Driver Number of orders Number of runs Pounds Machine hours Number of inspections Number of units Estimated activity Estimated allocation base Predetermined rate for direct labor-hour: Driver Units 200 orders 100 runs 120.000 pounds 12.000 hours 45 inspections 480.000 units $ 1.134.000 #DIV/0! #DIV/0! Part b. Production costs using direct labor hours Account Direct materials Direct labor Indirect costs Total cost Institutional $ - Standard $ Try again! Silver - $ Try again! Total - $ Try again! Try again! Part c. Production costs using ABC Account Direct materials Direct labor Indirect costs: Processing orders Setting up production Handling materials Using machines Performing quality control Packing Total cost Institutional Standard $ $ Try again! Silver - $ Try again! $ Total - $ Try again! $ - $ Try again! Rate
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Student Name: Instructor
Class: McGraw-Hill/Irwin
Problem 09-51
KITCHEN SUPPLY, INC.
Part a.

Activity
Processing orders
Setting up production
Handling materials
Using machines
Performing quality control
Packing
Total estimated overhead

Cost Driver
Numbe...


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