Maynard Manufacturing Company Company manufactures three products, Product Alfa, BEta, and Gama. The company estimated it...
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Maynard Manufacturing Company Company manufactures three products, Product Alfa, BEta, and Gama. The company estimated it would incur RO 140,000 in manufacturing overhead costs during the current period. Overhead currently is assigned to the products based on direct labour hours. Data concerning the current period's operations appear below: Particulars Alfa 1400 Production in Units Direct labour hours per unit Direct material cost per unit Direct labour cost per unit Activity Machine Set up Purchase orders Factory cost Overhead cost RO 31860 193500 32320 1 hour RO 25 RO 28 Alfa Management is considering using activity-based costing to apply manufacturing overhead cost to products for external financial reports. The activity-based costing system would have the following three activity cost pools: 183 20 1400 Beta Beta 3000 225 30 4500 1.5 hour RO 35 RO 55 Gama 300 40 4200 Gama 3500 **Note: Factory cost are based on Direct labour hours Required a) Calculate the total cost of the product using Traditional method b) Calculate the total cost of the product using Activity Based Costing method Which of the product has Under/Over Cost. 2 hours RO 40 RO 60 Maynard Manufacturing Company Company manufactures three products, Product Alfa, BEta, and Gama. The company estimated it would incur RO 140,000 in manufacturing overhead costs during the current period. Overhead currently is assigned to the products based on direct labour hours. Data concerning the current period's operations appear below: Particulars Alfa 1400 Production in Units Direct labour hours per unit Direct material cost per unit Direct labour cost per unit Activity Machine Set up Purchase orders Factory cost Overhead cost RO 31860 193500 32320 1 hour RO 25 RO 28 Alfa Management is considering using activity-based costing to apply manufacturing overhead cost to products for external financial reports. The activity-based costing system would have the following three activity cost pools: 183 20 1400 Beta Beta 3000 225 30 4500 1.5 hour RO 35 RO 55 Gama 300 40 4200 Gama 3500 **Note: Factory cost are based on Direct labour hours Required a) Calculate the total cost of the product using Traditional method b) Calculate the total cost of the product using Activity Based Costing method Which of the product has Under/Over Cost. 2 hours RO 40 RO 60
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ANSWER a Total manufacturing overhead cost based on the traditional method RO 140000 Total direct labour hours for all products 1 hour x 1400 units of Alfa 15 hours x 3000 units of Beta 2 hours x 3500 ... View the full answer
Related Book For
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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