Carlton's Kitchens makes two types of pasta makers: Strands and Shapes. The company expects to manufacture...
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Carlton's Kitchens makes two types of pasta makers: Strands and Shapes. The company expects to manufacture 70,000 units of Strands, which has a per-unit direct material cost of $12 and a per-unit direct labor cost of $60. It also expects to manufacture 30,000 units of Shapes, which has a per-unit material cost of $18 and a per unit direct labor cost of $40. It is estimated that Strands will use 140,000 machine hours and Shapes will require 60,000 machine hours. Historically, the company has used the traditional allocation method and applied overhead at a rate of $11 per machine hour. It was determined that there were three cost pools, and the overhead for each cost pool is shown: Machine Setups $90,000 Machine Processing 2,000,000 Material Requisitions 110,000 Total Overhead. $2,200,000 The cost driver for each cost pool and its expected activity is shown Strands Shapes Total Machine Setups 300 100 200 Machine Hours 140,000 60,000 200,000 Parts Requisitions 80 120 200 A. What is the per unit cost for each product under the traditional allocation method) Round your answers to two decimal places. Strands Shapes Total per unit cost 8. What is the per-unit cost for each product under ABC costing? Round your answers to two decimal places. Strands Shapes Total cost C. Compared to ABC costing, was each product's overhead under- or overapplied? D. By how much was overhead under- or overapplied for each product? Round your answers to two decimal places. Overhead Amounts € Strands Shapes Total per unit cost $ B. What is the per-unit cost for each product under ABC costing? Round your answers to two decimal places. Strands Shapes Strands Shapes Total cost s C. Compared to ABC costing, was each product's overhead under- or overapplied? D. By how much was overhead under- or overapplied for each product? Round your answers to two decimal places. Overhead Amounts Carlton's Kitchens makes two types of pasta makers: Strands and Shapes. The company expects to manufacture 70,000 units of Strands, which has a per-unit direct material cost of $12 and a per-unit direct labor cost of $60. It also expects to manufacture 30,000 units of Shapes, which has a per-unit material cost of $18 and a per unit direct labor cost of $40. It is estimated that Strands will use 140,000 machine hours and Shapes will require 60,000 machine hours. Historically, the company has used the traditional allocation method and applied overhead at a rate of $11 per machine hour. It was determined that there were three cost pools, and the overhead for each cost pool is shown: Machine Setups $90,000 Machine Processing 2,000,000 Material Requisitions 110,000 Total Overhead. $2,200,000 The cost driver for each cost pool and its expected activity is shown Strands Shapes Total Machine Setups 300 100 200 Machine Hours 140,000 60,000 200,000 Parts Requisitions 80 120 200 A. What is the per unit cost for each product under the traditional allocation method) Round your answers to two decimal places. Strands Shapes Total per unit cost 8. What is the per-unit cost for each product under ABC costing? Round your answers to two decimal places. Strands Shapes Total cost C. Compared to ABC costing, was each product's overhead under- or overapplied? D. By how much was overhead under- or overapplied for each product? Round your answers to two decimal places. Overhead Amounts € Strands Shapes Total per unit cost $ B. What is the per-unit cost for each product under ABC costing? Round your answers to two decimal places. Strands Shapes Strands Shapes Total cost s C. Compared to ABC costing, was each product's overhead under- or overapplied? D. By how much was overhead under- or overapplied for each product? Round your answers to two decimal places. Overhead Amounts
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SOLUTION PART A To calculate the perunit cost for each product under the traditional allocation method we need to allocate the overhead costs to each product using the cost drivers provided and then a... View the full answer
Related Book For
Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura
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