Consider the following data for two products of Vigano Manufacturing. Activity Machine setup Parts handling Quality...

Transcribed Image Text:

Consider the following data for two products of Vigano Manufacturing. Activity Machine setup Parts handling Quality inspections Total budgeted overhead Unit Information Units produced Budgeted Cost $ 10,000 8,000 12,000 $ 30,000 Product A 1,000 units Direct materials cost Direct labor cost $ 20 per unit $ 40 per unit 2.0 per unit Direct labor hours Activity Driver 20 machine setups 16,000 parts 100 inspections Product B 200 units $ 30 per unit $ 50 per unit 2.5 per unit 1. Using a plantwide overhead rate based on 2,500 direct labor hours, compute the total product cost per unit for each product. 2. Consider the following additional information about these two products. If activity-based costing is used to allocate overhead cost, (a) compute overhead activity rates, (b) allocate overhead cost to Product A and Product B and compute overhead cost per unit for each, and (c) compute product cost per unit for each. Actual Activity Usage Setups Parts Inspections Product A 8 setups 10,000 parts 40 inspections Product B 12 setups 6,000 parts 60 inspections Consider the following data for two products of Vigano Manufacturing. Activity Machine setup Parts handling Quality inspections Total budgeted overhead Unit Information Units produced Budgeted Cost $ 10,000 8,000 12,000 $ 30,000 Product A 1,000 units Direct materials cost Direct labor cost $ 20 per unit $ 40 per unit 2.0 per unit Direct labor hours Activity Driver 20 machine setups 16,000 parts 100 inspections Product B 200 units $ 30 per unit $ 50 per unit 2.5 per unit 1. Using a plantwide overhead rate based on 2,500 direct labor hours, compute the total product cost per unit for each product. 2. Consider the following additional information about these two products. If activity-based costing is used to allocate overhead cost, (a) compute overhead activity rates, (b) allocate overhead cost to Product A and Product B and compute overhead cost per unit for each, and (c) compute product cost per unit for each. Actual Activity Usage Setups Parts Inspections Product A 8 setups 10,000 parts 40 inspections Product B 12 setups 6,000 parts 60 inspections