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Learning Activity 3

The document presents a detailed analysis of costs associated with various activities in a managerial accounting context, including wages, salaries, and overhead allocations for different production tasks. It includes calculations for activity rates and overhead costs related to specific jobs, as well as a breakdown of costs by activity levels. Additionally, it categorizes activities into unit-level, batch-level, product-level, and organization-level for better understanding of cost hierarchies.

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Ravneet Kaur
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12 views3 pages

Learning Activity 3

The document presents a detailed analysis of costs associated with various activities in a managerial accounting context, including wages, salaries, and overhead allocations for different production tasks. It includes calculations for activity rates and overhead costs related to specific jobs, as well as a breakdown of costs by activity levels. Additionally, it categorizes activities into unit-level, batch-level, product-level, and organization-level for better understanding of cost hierarchies.

Uploaded by

Ravneet Kaur
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Learning Activity 3 1.

Submitted To – Professor Izzy Elkhazin

Course – BUSI 2083 Introduction to Managerial Accounting 11/11 (20U-C-ON-5I)

Name -Ravneet Kaur

Student ID – 2019032142

Yorkville University
Learning Activity 3 2.

1.

Filing Orders Product Support Other Total


Wages and $76,000 $247,000 $57,000 $380,000
Salaries
Non-wage $13,500 $54,000 $22,500 $90,000
expenses
Total $89,500 $301,000 $79,500 $470,000
Activity 3,100 orders 32 products

Activity Rates (Costs divided by activity)

Filling Orders Product Support


Wages and Salaries $24.52 $301,000
Non-wage expenses 4.35 32
Total $29 $9,406

2. (1) First Stage Allocation:

Making Covers Job Support Other Total


Production $29,370 $40,050 $19,580 $89,000
Overhead
Office Expenses 5,810 22,410 13,280 $41,500
Total $35,180 $62,460 $32,860 $130,500
Activity 2,500 metres 200 jobs

(2) Activity rates (costs divided by activity)

Making Covers Job Support


Production overhead $11.75 $200.25
Office Expense $2.32 $112.05
Total $14.07 $312.30

(3) Overhead cost of the job

Making Covers Job Support Total


Activity $0 1
Production Overhead $587.40 $200.25 $787.65
Office Expense $116.20 $112.05 $228.25
Total $703.60 $312.30 $1,015.90
Learning Activity 3 3.

Overhead assigned can also be calculated using the total rate for each activity:

Revenue
Sales $2,500
Cost:
Direct Material and Labour $950
Making Covers $703.60
Job Support $312.30 1,966
Product (JOB) Margin $534

3.
Activity Level
Factory utilities Organization
A steering wheel is installed in a golf cart. Unit-Level
Machine set-up. Batch-Level
Completed golf carts are individually tested on the company’s test Unit-Level
track.
Molding and sanding each unit of product Unit-Level
An outside lawyer draws up a new generic sales contract for the Organization-
company, limiting Go Pro’s liability in case of accidents that involve Sustaining
its golf carts.
Electricity is used to heat and light the factory and the administrative Organization-
offices. Sustaining
A golf cart is painted. cost hierarchy often used to implement ABC, Product-Level
with the exception of
Research and development Product-Level
The company’s engineer modifies the design of a model to eliminate Product-Level
a potential safety problem.

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