3)

REQUIRED:

Alacate overhead using a single plantwide rate, multiple department rates, and activity-based costing Downhill Sports inc. manufactures two productsi snowboards and skis. The factory averhead incurred is as follows The activity hase associated with the two production departments is direct labor hours. The indirect labor can be as The activity-base usage quantities and units produced for the two products followi 1. beterm ne a single plantidide factiris evectuad rate bared upon direct latop hour: birect blec enehead rates 1 per drect laber hour 6. Determine the total and per-unit cost assigned to each product under activity-based costing. Round the per unit amounts to the nearest whole cent. 7. Comment on the differences in the per-unit overhead allocated to each product using the single plantwide factory overhead rate method, the multiple production department factory overhead rate method, and activity-based costing. The plantwide overhead method allocates 5 of overhead to each product, while the multiple production department method allocates s overhead to snowboards and s to skis. Both the plantwide and multiple production department methods distort the allocation of overhead because they account for how each product consumes overhead. In contrast, activity-based costing allocates of factory overhead to snowboards and 5 to skis, Activity-based costing accurately allocates factory overhead because for how each product consumes overhead. Snowboards consume direct labor hours in the Finishing Department, Which has overhead. In addition. snowboards consume production control and materials handling overhead than do skis. This is because snowboards are made in lots, representing a variety of styles. Thus. snowboards have activity costs than skis