Francisco's Frames makes two types of frames, one Simple and one Complex. The simple product is...

 

Transcribed Image Text:

Francisco's Frames makes two types of frames, one Simple and one Complex. The simple product is a traditional photo frame, but the Complex product is a digital photo frame and requires computer coding. Traditionally, the company has always allocated OH costs to products based on machine hours. Last year the company implemented an activity-based costing system and managers determined the following activity pools and rates based on expected total overhead of $1,599,000. Assembly Fabrication Setups Coding Units Produced Direct labor hours Machine hours Pre-Determined Overhead Rate $1.25 per direct labor hour $9.75 per machine hour $18.00 per batch $170,000 direct to the Complex product Only the Complex product requires coding, so all coding overhead should be allocated to this product. The firm pays it works at a direct labor rate of $15.50 per hour. The firm actually used exactly the same number of machine the expected to use. The following data relates to the actual production of both products: Batches Direct Materials Cost Simple 125,000 250,000 50,000 2,500 $325,000 Complex 40,000 160,000 32,000 4,000 $475,000 Required: 1. What is the cost of producing one unit of the Simple product using traditional costing? 2. What is the cost of producing one unit of the Complex product using traditional costing? 3. What is the cost of producing one unit of the Simple product using activity-based costing? 4. What is the cost of producing one unit of the Complex product using activity-based costing? Francisco's Frames makes two types of frames, one Simple and one Complex. The simple product is a traditional photo frame, but the Complex product is a digital photo frame and requires computer coding. Traditionally, the company has always allocated OH costs to products based on machine hours. Last year the company implemented an activity-based costing system and managers determined the following activity pools and rates based on expected total overhead of $1,599,000. Assembly Fabrication Setups Coding Units Produced Direct labor hours Machine hours Pre-Determined Overhead Rate $1.25 per direct labor hour $9.75 per machine hour $18.00 per batch $170,000 direct to the Complex product Only the Complex product requires coding, so all coding overhead should be allocated to this product. The firm pays it works at a direct labor rate of $15.50 per hour. The firm actually used exactly the same number of machine the expected to use. The following data relates to the actual production of both products: Batches Direct Materials Cost Simple 125,000 250,000 50,000 2,500 $325,000 Complex 40,000 160,000 32,000 4,000 $475,000 Required: 1. What is the cost of producing one unit of the Simple product using traditional costing? 2. What is the cost of producing one unit of the Complex product using traditional costing? 3. What is the cost of producing one unit of the Simple product using activity-based costing? 4. What is the cost of producing one unit of the Complex product using activity-based costing?

Answer rating: 100% (QA)

The answer provided below has been developed in a clear step by step manner Step 1 Using traditional ... View the full answer