Acklin Company has two products: A and B. The annual production and sales of Product A...
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Acklin Company has two products: A and B. The annual production and sales of Product A is 600 units and of Product B is 900 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.5 direct labor-hours per unit and Product B requires 0.3 direct labor-hours per unit. The total estimated overhead for next period is $63,322. The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity- based costing system would have three overhead activity cost pools-Activity 1, Activity 2, and General Factory-with estimated overhead costs and expected activity as follows: Estimated Overhead Activity Cost Pool Costs Expected Activity Product A Product B Total Activity 1 Activity 2 General Factory Total $18,900 $15,631 $28,791 $63,322 700 200 900 1,100 570 1,000 100 300 270 (Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor-hours.) Required: 01. The predetermined overhead rate under the traditional costing system is closest to: 02. The overhead cost per unit of Product A under the traditional costing system is closest to: 03. The predetermined overhead rate (i.e., activity rate) for Activity 1 under the activity-based costing system is closest to: 04. The overhead cost per unit of Product A under the activity-based costing system is closest to: Acklin Company has two products: A and B. The annual production and sales of Product A is 600 units and of Product B is 900 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.5 direct labor-hours per unit and Product B requires 0.3 direct labor-hours per unit. The total estimated overhead for next period is $63,322. The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity- based costing system would have three overhead activity cost pools-Activity 1, Activity 2, and General Factory-with estimated overhead costs and expected activity as follows: Estimated Overhead Activity Cost Pool Costs Expected Activity Product A Product B Total Activity 1 Activity 2 General Factory Total $18,900 $15,631 $28,791 $63,322 700 200 900 1,100 570 1,000 100 300 270 (Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor-hours.) Required: 01. The predetermined overhead rate under the traditional costing system is closest to: 02. The overhead cost per unit of Product A under the traditional costing system is closest to: 03. The predetermined overhead rate (i.e., activity rate) for Activity 1 under the activity-based costing system is closest to: 04. The overhead cost per unit of Product A under the activity-based costing system is closest to:
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Answer rating: 100% (QA)
1 total overhead 63322 Total labour hours6000590003570 Overhead absorption r... View the full answer
Related Book For
Process Dynamics And Control
ISBN: 978-0471000778
2nd Edition
Authors: Dale E. Seborg, Thomas F. Edgar, Duncan A. Mellich
Posted Date:
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