MF Company produces two products: Direct labor hour / unit Units produced Direct material Direct labor...
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MF Company produces two products: Direct labor hour / unit Units produced Direct material Direct labor wage rate Additional information: Activity cost pool Cost Driver No. of set-ups Machine hours Overhead cost Direct labor hours. Milk 0.4 hour 10,000 L.E.16 L.E.7/hour L.E.32,000 Milk 50 40,000 L.E.9 L.E.7/hour Machine set-up Machining Assembly Required: 1- Allocate manufacturing overhead cost using the traditional approach using the direct labor hours as the cost driver. 2- Allocate manufacturing overhead cost using the Activity Based Costing (ABC) approach. 3- Compute the product cost / unit under both approaches and comment on the results. Products Juice Juice 0.2 hour 150 L.E.100.000 1,500 1,000 Total 200 2,500 L.E.468,000 4,000 8,000 12,000 MF Company produces two products: Direct labor hour / unit Units produced Direct material Direct labor wage rate Additional information: Activity cost pool Cost Driver No. of set-ups Machine hours Overhead cost Direct labor hours. Milk 0.4 hour 10,000 L.E.16 L.E.7/hour L.E.32,000 Milk 50 40,000 L.E.9 L.E.7/hour Machine set-up Machining Assembly Required: 1- Allocate manufacturing overhead cost using the traditional approach using the direct labor hours as the cost driver. 2- Allocate manufacturing overhead cost using the Activity Based Costing (ABC) approach. 3- Compute the product cost / unit under both approaches and comment on the results. Products Juice Juice 0.2 hour 150 L.E.100.000 1,500 1,000 Total 200 2,500 L.E.468,000 4,000 8,000 12,000
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Related Book For
Cost Management Measuring Monitoring and Motivating Performance
ISBN: 978-0470769423
2nd edition
Authors: Leslie G. Eldenburg, Susan K. Wolcott
Posted Date:
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