Accounting Question 2

Section B Problems total 70 points Problem 1 Use this information to answer 11 - 15 Office Pro Inc. manufactures three types of Arm chairs - Standard, commercial and mechanized. The company estimated that the following activity would take place during 2020: Product Standard Commercial Mechanized Number of units produced 10,000 units 5,000 units 1,000 units Direct material cost per unit $25 $35 $45 Direct labor cost per unit $20 $30 $40 Direct Labor hour (DLH) per unit 1.00 DLH 1.50 DLH 2.00 DLH Total Direct labor hours Total estimated fixed manufacturing overhead for 2020 is $429,000. Overhead is currently allocated to products using the estimated total direct labor hours worked during the year. However, the company is currently implementing an activity-based costing (ABC) system, and an analysis of overhead has identified the following overhead cost pools and cost drivers: Overhead cost pool Overhead costs $ Costs drivers Number of cost driver Material handling $120,000 | Number of parts 40,000 parts Machining 180,000 Number of machine hours 15,000 machine hours Testing 129,000 Number of testing hours 3,000 testing hours Total Overhead costs $429,000 Cost drivers used: Standard Commercial Customized Number of parts 20,000 12,000 8,000 Number of machine hours 4,000 5,000 6,000 Number of testing hours 800 700 1,500 11 Calculate a traditional predetermined overhead allocation rate assuming that factory overhead is allocated to products based on the total number of direct labor hours worked. MAKE SURE TO LABEL IT CORRECTLY Enter your