Problem 1 (50%) John Company manufactures two products, Product A-8, Product B-18 and Product C-25, Product...

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Problem 1 (50%) John Company manufactures two products, Product A-8, Product B-18 and Product C-25, Product B-18 was developed recently in an attempt to enter a new market segment. John adopts a simple costing system and uses normal costing system to compute the cost of each product. A single plant-wide overhead application rate is used based on direct labor hours. The company estimated. it would incur $1,000,000 in manufacturing overhead costs and produce 10,000 units of Product A-8. 20.000 units of Product B-18 and 30,000 units of Product C-25 during the current year. Actual unit costs for direct materials and direct labor and the budgeted direct labor hours used to produce each unit of product are: Product A-8 Product B-18 Product C-25 Direct material $22 $20 $15 $30 Direct labor $8 18 Direct labor hours to produce 1 unit 3 hours 2 hour I hour Required: (Put your answers in the empty spaces provided after each question. Show all the necessary workings) 1. Compute the predetermined overhead rate under the current method. (check answer $10) prederem med Qalend rate = 2. Determine the unit product cost of EACH product for the current year under the simple costing system. Product A-8 Product B-18 Product C-25 Direct material 22 ze 30 Direct labor 15 МОН Unit product cost Problem 1 (50%) John Company manufactures two products, Product A-8, Product B-18 and Product C-25, Product B-18 was developed recently in an attempt to enter a new market segment. John adopts a simple costing system and uses normal costing system to compute the cost of each product. A single plant-wide overhead application rate is used based on direct labor hours. The company estimated. it would incur $1,000,000 in manufacturing overhead costs and produce 10,000 units of Product A-8. 20.000 units of Product B-18 and 30,000 units of Product C-25 during the current year. Actual unit costs for direct materials and direct labor and the budgeted direct labor hours used to produce each unit of product are: Product A-8 Product B-18 Product C-25 Direct material $22 $20 $15 $30 Direct labor $8 18 Direct labor hours to produce 1 unit 3 hours 2 hour I hour Required: (Put your answers in the empty spaces provided after each question. Show all the necessary workings) 1. Compute the predetermined overhead rate under the current method. (check answer $10) prederem med Qalend rate = 2. Determine the unit product cost of EACH product for the current year under the simple costing system. Product A-8 Product B-18 Product C-25 Direct material 22 ze 30 Direct labor 15 МОН Unit product cost

Answer rating: 100% (QA)

Estimated Manufacturing Overhead Estimated Direct Labor Hours A BC 1 1000000 10... View the full answer