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8/10/2019 p4-2a
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$1,600
$1,300
Royale Majestic$700 $420120 100
228 190$1,048 $710
25,000 10,000
rate of $38 $7,600,000200,000
$552
$1,200,000 40,000 $30
900,000 18,000 504,800,000 120,000 40700,000 28,000 25
Royale Majestic Total
15,000 25,000 40,000
5,000 13,000 18,00075,000 45,000 120,000
9,000 19,000 28,000
Rate
Drivers
Used
Cost
Assigned
Drivers
Used
Cost
Assigned
Total
OverheadAmount Amount Amount Amount Amount Formula
Amount Amount Amount Amount Amount FormulaAmount Amount Amount Amount Amount FormulaAmount Amount Amount Amount Amount Formula
Formula Formula Formula
Amount Amount
Formula Formula
Royale Majestic
Amount Amount
Amount AmountAmount Amount
Formula Formula
Activity Cost Driver
Estimated
Overhead
Expected
Use of
Cost
Drivers
Activity-
Based
Overhead
RatePurchasing Number of orders
Under traditional costing, the gross profit on the models was: Royale or ($1,600 - $1,048) and Majestic
$590 or ($1,300 - $710) Because of this difference, management is considering phasing out the Royale model and increasing theMajestic model.
Before finalizing its decision, management asks Jacobson's controller to prepare an analysis using activity-based costing (ABC). The
controller accumulates the following information about overhead for the year ended December 31, 2005.
In 2005, Jacobson manufactured units of the Royale and units of the Majestic. The overhead
per direct labor hour was determined by dividing total expected manufacturing overhead ofby the direct labor hours for the two models.
Traditional CostingDirect materialsDirect labor($20 per hour)
Mfg overhead ($38 per DLH)Total per unit cost
Managerial Accounting, 3rd
Edition,by Weygandt, Kieso, and Kimmel
Solving Managerial Accounting Problems Using Microsoft Excel for Windowsby Rex A Schildhouse
Problem P4-2A, Jacobson Electronics manufactures two large-screen television models: the Royale which sells for
and a new model, the Majest ic, which sells for The production cost computed per unit under tradit ional cost ing for each model is 2005 was as follows.
Name: Date:
Instructor: Course:
Quality control Number of inspections
The cost drivers used for each product were:
Machine setups Number of setupsMachining Machine hours
Cost DriverPurchase orders
Machine setupsMachine hours
Inspections
Instruct ions:
(a)Assign the total 2005 manufacturing overhead costs to the two products using activity-based costing (ABC).Royale Majestic
Overhead Rate
Total assigned costs
Units produced
Cost per unit
Label
Label
LabelLabel
Total cost per unit
LabelLabelLabel
(c)Are management's future plans for the two models sound? Explain the block below.
(b)What was the cost per unit and gross profit of each model using ABC costing?
8/10/2019 p4-2a
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Instructions for the Microsoft Excel Templates
Detail and information on Excel is contained within the manual.
Striking the "F1" key or following the path "Windows>Excel Help" will invoke the Office Assistantand bring up one of several help menus.
Type your name into the cell "D5". This will be copied by formula to the rest of the pages as required.
Type the due date of your problem into cell "I5". This will be copied by formula to the rest of the pages as required.
Type the instructor's name into cell "D6". This will be copied by formula to the rest of the pages as required.
Type the course identifier into cell "I6". This will be copied by formula to the rest of the pages as required.
The problem is identified for you in cell "B7".
In "DATE" cells enter the date in any of several formats and Excel will format it correctly.
If more than one page is preformatted into the problem, page breaks are preset and formulas areset to copy the header into the remaining pages.
Place the proper account title in the cell where the word "ACCOUNT" appears on the template.
Place the amount in the cell where the word "AMOUNT" appears on the template. A formula may be placed in
Enter a number like 914 to signify units or gallons where the word "NUMBER" appears.
Write a formula into cells where the word "FORMULA" appears. In these cells, an amount calculated outside of
Place the explanation for the entry in the cell where the word "EXPLANATION" appears on the template.
Insert the account number where "ACCT #" appears on the template during posting.
Insert the journal reference where "JOURN #" appears on the template during posting.
Insert the title in the cell where "TITLE" appears on the template.
The print area is defined to fit onto 8 1/2" X 11" sheets in portrait or landscape mode as required.
The gray filled cells define the perimeter of the problem and the print area.
The problem is formatted for whole dollars with comma separations (no cents) except where required.
The display may have "Freeze Pane" invoked so column titles remain visible during data entry.
Negative values may be shown as ($400) vice -$400.
Enter a string like: ($259,417 X 12 months) + (0.3651 X 5,434,631) where the word TEXT appears.