Gaffel Company produces two types of calculators: scientific and business. Both products pass through two producing departments.

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Gaffel Company produces two types of calculators: scientific and business. Both products pass through two producing departments. The business calculator is by far the more popular. The following budgeted data have been gathered for these two products:


Gaffel Company produces two types of calculators: scientific and


All budgeted items have exactly occurred during the year.

Required:
1. Compute the overhead cost per unit for each product using a plantwide, direct labor hours rate.
2. Compute the overhead cost per unit for each product using departmental rates. In calculating departmental rates, use machine hours for department 1 and direct labor hours for department 2. Repeat using direct labor hours for department 1 and machine hours for department 2.
3. Compute the overhead cost per unit for each product using activity-based costing.
4. Comment on the ability of departmental rates to improve the accuracy of productcosting.

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Related Book For  answer-question

Cost Management Accounting and Control

ISBN: 978-0324559675

6th Edition

Authors: Don R. Hansen, Maryanne M. Mowen, Liming Guan

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