Fairchild, Inc., manufactures two products, Regular and Deluxe, and applies overhead on the basis of direct...

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Fairchild, Inc., manufactures two products, Regular and Deluxe, and applies overhead on the basis of direct labor hours. Anticipated overhead and direct labor time for the upcoming accounting period are $3,004,100 and 63,400 hours, respectively. Information about the company's products follows. Regular- Estimated production volume: 1,100 units Direct materials cost: $47 per unit Direct labor per unit: 8 hours at $34 per hour Deluxe- Estimated production volume: 7,800 units Direct materials cost: $61 per unit Direct labor per unit: 7 hours at $34 per hour Fairchild's overhead of $3,004,100 can be identified with three major activities: order processing ($259,500), machine processing ($2,146,200), and product inspection ($598,400). These activities are driven by number of orders processed, machine hours worked, and inspection hours, respectively. Data relevant to these activities follow. Orders Machine Hours Inspection Processed Worked Hours Regular 130 17,900 7,800 Deluxe 370 25,900 9,800 Total 500 43,800 17,600 Required: A. Compute the pool rates that would be used for order processing, machine processing, and product inspection in an activity-based costing system. B. Assuming use of activity-based costing, compute the unit manufacturing costs of Regular and Deluxe if the expected manufacturing volume is attained. (Round your intermediate calculations and final answers to 2 decimal places.) C. How much overhead would be applied to a unit of Regular and Deluxe if the company used traditional costing and applied overhead solely on the basis of direct labor hours? Which of the two products would be undercosted by this procedure? Overcosted? (Round your intermediate calculations and final answers to 2 decimal places.) Fairchild, Inc., manufactures two products, Regular and Deluxe, and applies overhead on the basis of direct labor hours. Anticipated overhead and direct labor time for the upcoming accounting period are $3,004,100 and 63,400 hours, respectively. Information about the company's products follows. Regular- Estimated production volume: 1,100 units Direct materials cost: $47 per unit Direct labor per unit: 8 hours at $34 per hour Deluxe- Estimated production volume: 7,800 units Direct materials cost: $61 per unit Direct labor per unit: 7 hours at $34 per hour Fairchild's overhead of $3,004,100 can be identified with three major activities: order processing ($259,500), machine processing ($2,146,200), and product inspection ($598,400). These activities are driven by number of orders processed, machine hours worked, and inspection hours, respectively. Data relevant to these activities follow. Orders Machine Hours Inspection Processed Worked Hours Regular 130 17,900 7,800 Deluxe 370 25,900 9,800 Total 500 43,800 17,600 Required: A. Compute the pool rates that would be used for order processing, machine processing, and product inspection in an activity-based costing system. B. Assuming use of activity-based costing, compute the unit manufacturing costs of Regular and Deluxe if the expected manufacturing volume is attained. (Round your intermediate calculations and final answers to 2 decimal places.) C. How much overhead would be applied to a unit of Regular and Deluxe if the company used traditional costing and applied overhead solely on the basis of direct labor hours? Which of the two products would be undercosted by this procedure? Overcosted? (Round your intermediate calculations and final answers to 2 decimal places.)

Answer rating: 100% (QA)

rs A Computation of Pool rates Activities cost pool Cost Cost Driver Number of Activity Pool rates A ... View the full answer