John gathered the following information about the cost driver volume for each product: Activity (cost driver)...

Transcribed Image Text:

John gathered the following information about the cost driver volume for each product: Activity (cost driver) Machine setups (setup hours) Diomycin 200 Homycin 600 Addolin 800 Plant management (number of workers) 200 400 600 Supervision of direct labor (DLHs) 200 300 650 Quality inspection (inspection hours) 150 200 700 Expediting orders (# customers served). 45 100 500 Required: (Be sure to show supporting calculations, as needed, to receive credit) 1. (5 points) Using the current costing system, calculate the overhead cost per unit for each product. 2. (12 points) Using the ABC system, calculate the overhead cost per unit cost for each product. 3. (4 points) The two costing systems provide different results. Discuss why the differences occur. Be sure to make so references to your calculations in (1) and (2). John gathered the following information about the cost driver volume for each product: Activity (cost driver) Machine setups (setup hours) Diomycin 200 Homycin 600 Addolin 800 Plant management (number of workers) 200 400 600 Supervision of direct labor (DLHs) 200 300 650 Quality inspection (inspection hours) 150 200 700 Expediting orders (# customers served). 45 100 500 Required: (Be sure to show supporting calculations, as needed, to receive credit) 1. (5 points) Using the current costing system, calculate the overhead cost per unit for each product. 2. (12 points) Using the ABC system, calculate the overhead cost per unit cost for each product. 3. (4 points) The two costing systems provide different results. Discuss why the differences occur. Be sure to make so references to your calculations in (1) and (2).

Answer rating: 100% (QA)

To calculate the overhead cost per unit for each product we need to divide the total overhead cost by the number of units produced 1 Using the Current ... View the full answer