Cuisinart, a Conair Corporation, manufactures outdoor gas cookers and charcoal smokers. Assume that Cuisinart only makes...
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Cuisinart, a Conair Corporation, manufactures outdoor gas cookers and charcoal smokers. Assume that Cuisinart only makes a single model of each product and that the following informa- tion pertains to the total manufacturing costs for the products in the current month. Gas Cooker Charcoal Smoker Units...... 4,000 3,500 Number of batches. 80 35 16,000 3,000 Number of machine hours Direct materials.. $108,500 $225,500 $100,683 Direct labor.... $50,341 Manufacturing overhead follows: Activity Materials acquisition and inspection.. Product assembly... Scheduling. Cost $ 50,100 123,500 15,180 $188,780 Cost Driver Amount of direct materials cost Number of machine hours Number of batches E18-23. Activity-Based Costing Versus Traditional Costing Refer to the previous exercise in E18-22 for Cuisinart. REQUIRED a. Comment on the differences between the solutions to requirements (a) and (b). Which is more accurate? What errors might managers make if all manufacturing overhead costs are assigned on the basis of direct labor dollars? h. Cuisinart's manufacturing process has become increasingly automated over the past few years. Discuss how this will likely impact its ability to accurately measure product costs. Comment on the adequacy of the preceding data to meet management's needs. C. Cuisinart, a Conair Corporation, manufactures outdoor gas cookers and charcoal smokers. Assume that Cuisinart only makes a single model of each product and that the following informa- tion pertains to the total manufacturing costs for the products in the current month. Gas Cooker Charcoal Smoker Units...... 4,000 3,500 Number of batches. 80 35 16,000 3,000 Number of machine hours Direct materials.. $108,500 $225,500 $100,683 Direct labor.... $50,341 Manufacturing overhead follows: Activity Materials acquisition and inspection.. Product assembly... Scheduling. Cost $ 50,100 123,500 15,180 $188,780 Cost Driver Amount of direct materials cost Number of machine hours Number of batches E18-23. Activity-Based Costing Versus Traditional Costing Refer to the previous exercise in E18-22 for Cuisinart. REQUIRED a. Comment on the differences between the solutions to requirements (a) and (b). Which is more accurate? What errors might managers make if all manufacturing overhead costs are assigned on the basis of direct labor dollars? h. Cuisinart's manufacturing process has become increasingly automated over the past few years. Discuss how this will likely impact its ability to accurately measure product costs. Comment on the adequacy of the preceding data to meet management's needs. C.
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C The companys management will also require details on the nonmanufacturing costs that may have to b... View the full answer
Related Book For
Cost Management Accounting and Control
ISBN: 978-0324559675
6th Edition
Authors: Don R. Hansen, Maryanne M. Mowen, Liming Guan
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