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Chapter 05 Homework Help Save & Exit Submit Check my work Manchester Technology, Inc. manufactures several different types of printed circuit boards; however, two of the boards account for the majority of the company's sales. The first of these boards, a television circuit board, has been a standard in the industry for several years. The market for this type of board is competitive and price-sensitive Manchester plans to sell 66,000 of the TV boards in 20x1 at a price of $330 per unit. The second high-volume product, a personal computer circuit board, is a recent addition to Manchester's product line. Because the PC board incorporates the latest technology. It can be sold at a premium price. The 20xt plans include the sale of 41,000 PC boards at $675 per unit. Manchester's management group is meeting to discuss how to spend the sales and promotion dollars for 20xThe sales manager believes that the market share for the TV board could be expanded by concentrating Manchester's promotional efforts in this area. In response to this suggestion, the production manager said, "Why don't you go after a bigger market for the PC board? The cost sheets that I get show that the contribution from a PC board is significantly larger than the contribution from a TV board. I know we get a premium price for the PC board. Selling it should help overall profitability" The cost-accounting system shows that the following costs apply to the PC and TV boards. PC Board TV Board Variable manufacturing overhead is applied on the basis of direct labor hours. For 20x1, variable overhead is budgeted at $2,255,000 and direct labor hours are estimated at 207 000. The hourly rates for machine time and direct laborare $22 and 30 respectively. The company applies a material handling charge at 10 percent of material cost. This material handling charge is not included in variable manufacturing overhead. Total 20x1 expenditures for direct material are budgeted at $18.260,000 Andrew Fulton, Manchester's controller, believes that before the management group proceeds with the discussion about allocating sales and promotional dollars to individual products, it might be worthwhile to look at these products on the basis of the activities involved in their production. Fulton has prepared the following schedule to help the management group understand this concept. "Using this information Fulton explained, "we can calculate an activity based cost for each TV board and each PC board and then Help Save & Exit Submit "Using this information," Fulton explained, "we can calculate an activity based cost for each TV board and each PC board and then compare it to the standard cost we have been using. The only cost that remains the same for both cost methods is the cost of direct material. The cost drivers will replace the direct labor, machine time, and overhead costs in the old standard cost figures. ted Anal Activity Budgeted cost cost biver er of parts We of boards 465.000 proti hedeling Packaging and shipping 6,530,900 parts 117,700 boards 18.200 stupe waardous waste disposal 98,000 1.126,000 Number of setup Pounds of waste Number of inspections 3.164.000 parte H ot parts Machine insertiona Manual insertions Hazardous waste disposal, Required 1. Identify at least four general advantages associated with activity-based costina Required: 1. Identify at least four general advantages associated with activity-based costing 2. On the basis of Manchester's unit cost data given in the problem, calculate the total amount that each of the two product lines will contribute toward covering fixed costs and profit in 20x1 3. Using activity-based costing, calculate the total amount that each of the two product lines will contribute toward covering fixed costs and profit in 20x1. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Identify at least four general advantages associate with activity based costing. Select "XIf the item is a general advantage. Allows management to focus on value-added and non-value added activities, so that non value-added activities can be corredoriminated, thus streaming production processes High the relationship between acties and identifies oportunities to reduc e designing products with fewer parts in order to reduce the cost of the manufacturing process Provides management with reports that are easier to interpret because only one manufacturing overhead cost pool is used per product Provides management with more thorough understanding of complex product costs and product profitably for proved resource management and pricing decisions Provides a more appropriate means of charging overheads to products Requires los resurs and is c o mplement than adonal costing systems Check my work Required: 1. Identify at least four general advantages associated with activity based costing. 2. On the basis of Manchester's unit cost data given in the problem, calculate the total amount that each of the two product lines will contribute toward covering fixed costs and profit in 20x1. 3. Using activity-based costing, calculate the total amount that each of the two product lines will contribute toward covering fixed costs and profit in 20x1. 10 points Complete this question by entering your answers in the tabs below. Print Required 1 Required 2 Required 3 On the basis of Manchester's unit cost data given in the problem, calculate the total amount that each of the two product lines will contribute toward covering fixed costs and profit in 20x1. (Round your intermediate calculations to 2 decimal places.) PC Board TV Board Total contribution margin Required: 1. Identify at least four general advantages associated with activity-based costing. 2. On the basis of Manchester's unit cost data given in the problem, calculate the total amount that each of the two product lines will contribute toward covering fixed costs and profit in 20x1. 3. Using activity-based costing, calculate the total amount that each of the two product lines will contribute toward covering fixed costs and profit in 20x1. points Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Using activity-based costing, calculate the total amount that each of the two product lines will contribute toward covering fixed costs and profit in 20x1. (Round your intermediate calculations to 2 decimal places.) PC Board TV Board Total contribution margin

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