Kepple Manufacturing currently uses a traditional costing system. The company allocates overhead to its two products,...

 

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Kepple Manufacturing currently uses a traditional costing system. The company allocates overhead to its two products, Zips and Dees, using a predetermined manufacturing overhead rate based on direct labor hours. Here is data related to the company's two products: Zips Dees $80 $130 $65 $60 2 2.5 20.000 44.000 Direct materials per unit Direct labor per unit Direct labor hours per unit Annual production Information about the company's estimated manufacturing overhead for the year follows: Estimated overhead cost Activities Supervision and maintenance Batch costs Activity measures Direct labor hours Number of batches Engineering changes $2,400,000 $216,500 $188,370 $2,804,870 Number of engineering hours Total estimated manufacturing overhead for the year Total estimated direct labor hours for the company for the year are 150,000 hours. The company is evaluating whether it should use an activity-based costing system in place of its traditional costing system. Additional information about production needed for the activity-based costing system follows: Dees Zips 40,000 110,000 2,100 500 1,900 1,100. Direct labor hours Total 150.000 2,600 3,000 Batches Engineering hours The amount of manufacturing overhead that would be allocated to one unit of Zips using the traditional costing system would be closest to (Round all answers to two decimal places.) Kepple Manufacturing currently uses a traditional costing system. The company allocates overhead to its two products, Zips and Dees, using a predetermined manufacturing overhead rate based on direct labor hours. Here is data related to the company's two products: Zips Dees $80 $130 $65 $60 2 2.5 20.000 44.000 Direct materials per unit Direct labor per unit Direct labor hours per unit Annual production Information about the company's estimated manufacturing overhead for the year follows: Estimated overhead cost Activities Supervision and maintenance Batch costs Activity measures Direct labor hours Number of batches Engineering changes $2,400,000 $216,500 $188,370 $2,804,870 Number of engineering hours Total estimated manufacturing overhead for the year Total estimated direct labor hours for the company for the year are 150,000 hours. The company is evaluating whether it should use an activity-based costing system in place of its traditional costing system. Additional information about production needed for the activity-based costing system follows: Dees Zips 40,000 110,000 2,100 500 1,900 1,100. Direct labor hours Total 150.000 2,600 3,000 Batches Engineering hours The amount of manufacturing overhead that would be allocated to one unit of Zips using the traditional costing system would be closest to (Round all answers to two decimal places.)

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First we need to calculate the predetermined manufacturing overhead rate based on direc... View the full answer