Given the following information Part 1 What is the predetermined overhead rate per unit using direct labor
Question:
Given the following information
Part 1
What is the predetermined overhead rate per unit using direct labor hours as an application base? And what is the contribution margin per unit if overhead is applied using expected direct labor hours as a base?
Data:
Sales price per unit…………………$200
Direct materials per unit……………$100
Direct labor per hour………………..$30
Direct labor hour needed per unit….2 hours
Number of units to be produced…..40,000
Total estimated OH………………$200,000
Part 2
Continuing with this same scenario, assume that the following activities incur various OH costs:
Cutting……………….$100,000 based on 80,000 cuts
Assembly…………….$ 75,000 based on 160,000 parts
Inspection…………….$25,000 based on 1,000 inspections
What would the Contribution margin per unit be, given the information above (and below) using ABC?
Sales price per unit…………………$200
Direct materials per unit……………$100
Direct labor per hour………………..$30
Direct labor hour needed per unit….2 hours
Number of units to be produced…..40,000
Total estimated OH………………$200,000
Cutting necessary………………….2 cuts needed per unit
Assembly…………………………..4 assembly parts per unit
Inspection………………………….1 inspection per unit
Horngrens Accounting
ISBN: 978-0134674681
12th edition
Authors: Tracie L. Miller nobles, Brenda L. Mattison, Ella Mae Matsumura