Consider the following budgeted information for a firm producing three products Units to be produced Orders...
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Consider the following budgeted information for a firm producing three products Units to be produced Orders to be shipped Number of parts per unit Machine hours per unit Labor hours per unit Overhead Analysis: Activity Material handling Material insertion Product A 10,000 1,000 10 1 3 Product B 5,000 500 15. 3 2 Budgeted Cost $ 225,000 2,475,000 840,000 170,000 170,000 $3,880,000 using traditional costing (with labor hours as the allocation basis) Automated machinery Finishing Packaging Total indirect manufacturing cost I. Complete the following table showing unit overhead costs: Product C 2,000 200 25 5 3 using traditional costing (with machine hours as the allocation basis) using Activity Based Costing Cost Driver Number of parts Number of parts Machine hours Labor hours Orders shipped Product A Product B Product C II. a. Using an ABC system, how much of the Material handling and material insertion costs would be allocated to one unit of Product A? b. Suppose the firm used a traditional volume-based cost accounting system, allocating all overhead based on labor hours. How much of the Material handling and material insertion costs would be allocated to one unit of Product A? Consider the following budgeted information for a firm producing three products Units to be produced Orders to be shipped Number of parts per unit Machine hours per unit Labor hours per unit Overhead Analysis: Activity Material handling Material insertion Product A 10,000 1,000 10 1 3 Product B 5,000 500 15. 3 2 Budgeted Cost $ 225,000 2,475,000 840,000 170,000 170,000 $3,880,000 using traditional costing (with labor hours as the allocation basis) Automated machinery Finishing Packaging Total indirect manufacturing cost I. Complete the following table showing unit overhead costs: Product C 2,000 200 25 5 3 using traditional costing (with machine hours as the allocation basis) using Activity Based Costing Cost Driver Number of parts Number of parts Machine hours Labor hours Orders shipped Product A Product B Product C II. a. Using an ABC system, how much of the Material handling and material insertion costs would be allocated to one unit of Product A? b. Suppose the firm used a traditional volume-based cost accounting system, allocating all overhead based on labor hours. How much of the Material handling and material insertion costs would be allocated to one unit of Product A?
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I Table showing unit overhead costs Activity Product A Product B Product C Material handling 1700 34... View the full answer
Related Book For
Cost Management A Strategic Emphasis
ISBN: 978-0078025532
6th edition
Authors: Edward Blocher, David Stout, Paul Juras, Gary Cokins
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