Great Furniture Inc. (GF) manufactures a variety of furniture for household use and just two items...

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Great Furniture Inc. (GF) manufactures a variety of furniture for household use and just two items for office use: desks and cabinets. The production process for desks and cabinets is similar, although machines must be retooled for each product. Both materials and labour costs are directly traceable to individual products; however, overhead is a common cost and allocated using direct labour hours as the allocation base. GF's accountant is considering the use of activity-based costing (ABC) and has suggested evaluating the system by applying it to the two office use products (desks and cabinets). The following data are available for a typical quarter. Activity Cost Pool Parts receipts Machining Assembly Quality control Direct materials Direct labour Activity Base Number of parts Machine hours Units produced Units tested Each product consumed 530 direct labour hours. Required: Activity Rate $ 6.00 per part $18.00 per machine-hour $5.00 per unit $ 3.00 per unit 530 machine hours Activity Usage Desks 530 parts Cabinets 1,060 parts 330 machine hours 530 units 130 units $8,010 $8,450 400 units 230 units $9,900 $9,500 1. Determine the total manufacturing cost and cost per unit for each of the two product lines for the quarter, using activity-based costing to allocate overhead costs. (Round "Cost per unit" answers to 2 decimal places.) Desks Total manufacturing cost Cost per unit Cabinets 2. Redo the above using direct labour hours as the allocation base. (Round "Cost per unit" answers to 2 decimal places.) Desks Cabinets Total manufacturing cost Cost per unit 3. This part of the question is not part of your Connect assignment. 4. This part of the question is not part of your Connect assignment. Great Furniture Inc. (GF) manufactures a variety of furniture for household use and just two items for office use: desks and cabinets. The production process for desks and cabinets is similar, although machines must be retooled for each product. Both materials and labour costs are directly traceable to individual products; however, overhead is a common cost and allocated using direct labour hours as the allocation base. GF's accountant is considering the use of activity-based costing (ABC) and has suggested evaluating the system by applying it to the two office use products (desks and cabinets). The following data are available for a typical quarter. Activity Cost Pool Parts receipts Machining Assembly Quality control Direct materials Direct labour Activity Base Number of parts Machine hours Units produced Units tested Each product consumed 530 direct labour hours. Required: Activity Rate $ 6.00 per part $18.00 per machine-hour $5.00 per unit $ 3.00 per unit 530 machine hours Activity Usage Desks 530 parts Cabinets 1,060 parts 330 machine hours 530 units 130 units $8,010 $8,450 400 units 230 units $9,900 $9,500 1. Determine the total manufacturing cost and cost per unit for each of the two product lines for the quarter, using activity-based costing to allocate overhead costs. (Round "Cost per unit" answers to 2 decimal places.) Desks Total manufacturing cost Cost per unit Cabinets 2. Redo the above using direct labour hours as the allocation base. (Round "Cost per unit" answers to 2 decimal places.) Desks Cabinets Total manufacturing cost Cost per unit 3. This part of the question is not part of your Connect assignment. 4. This part of the question is not part of your Connect assignment.

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To determine the total manufacturing cost and cost per unit for each product line using activitybase... View the full answer