Chapter 19 Exercises

1. Cost Management Systems: Activity-Based, Just-In-Time, and QualityManagement Chapter 19 Exercises

2. Activity Based Costing • In-Class Exercises (Form groups and work exercise): Exercise No.Page E19-18 1187 Activity-Based Costing (Use the format, as reflected on the next slide, to begin this exercise)

3. Activity Based Costing Use the above formula to calculate the overhead rate for each of the three cost pools. (See the next slide for the format to allocate costs)

4. Activity Based Costing Use this format to allocate the overhead costs to each of the three activities.

5. Activity Based Costing Exercise E19-18: Turbo Champs Corp. uses activity-based costing to account for its motorcycle manufacturing process. Company managers have identified three supporting manufacturing activities: inspection, machine setup, and machine maintenance. The budgeted activity costs for 2014 and their allocation bases are as follows: ActivityTotal Budgeted CostAllocation BaseInspections…………………….. $ 6,000 …………. Number of inspectionsMachine Setup………………… 32,000 ………… Number of setups Machine Maintenance………... 5,000 …………. Finishing of machine Total………………………….. $43,000 hoursTurbo expects to produce 20 custom-built motorcycles for the year. The motorcycles are expected to require 100 inspections, 20 setups, and 100 machine hours. Requirements:(1) Compute the predetermined overhead allocation rate for each activity.(2) Compute the expected indirect manufacturing cost of each motorcycle.

6. Activity Based Costing Exercise E19-18, Part 1

7. Activity Based Costing Predetermined Overhead Rates

8. Activity Based Costing Exercise E19-18, Part 2

9. Activity Based Costing