Rondeau, Inc., manufactures and sells two products: Product V9 and Product M6. Data concerning the expected...
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Rondeau, Inc., manufactures and sells two products: Product V9 and Product M6. Data concerning the expected production of each product and the expected total direct labor-hours (DLHS) required to produce that output appear below: Product V9 Product M6 Total direct labor-hours. Product V9 Product M6 The direct labor rate is $26.00 per DLH. The direct materials cost per unit for each product is given below: Direct Materials. Cost per Unit $284.60 $177.80 Activity Cost Pools Labor-related Expected Production 520 620 The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Product testing. Order size Direct Labor- Hours Per Unit. 11.2 8.2 Activity Measures DLHS Tests MHS Estimated Overhead Cost $100, 156 Total Direct Labor-Hours 5,824 5,084 10,908 74,008 395,000 $569,164 Expected Activity Product V9 5,824 930 5,000 Product M6 5,084 1,240 4,480 Total 10,908 2,170 9,480 Required: Calculate the difference between the unit product costs under the traditional costing method and the activity-based costing system for each of the two products. (Round your intermediate calculations and final answers to 2 decimal places. Enter your answers as positive values.) Traditional unit product cost ABC unit product cost Difference $ Product V9 Product M6 0.00 $ 0.00 Rondeau, Inc., manufactures and sells two products: Product V9 and Product M6. Data concerning the expected production of each product and the expected total direct labor-hours (DLHS) required to produce that output appear below: Product V9 Product M6 Total direct labor-hours. Product V9 Product M6 The direct labor rate is $26.00 per DLH. The direct materials cost per unit for each product is given below: Direct Materials. Cost per Unit $284.60 $177.80 Activity Cost Pools Labor-related Expected Production 520 620 The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Product testing. Order size Direct Labor- Hours Per Unit. 11.2 8.2 Activity Measures DLHS Tests MHS Estimated Overhead Cost $100, 156 Total Direct Labor-Hours 5,824 5,084 10,908 74,008 395,000 $569,164 Expected Activity Product V9 5,824 930 5,000 Product M6 5,084 1,240 4,480 Total 10,908 2,170 9,480 Required: Calculate the difference between the unit product costs under the traditional costing method and the activity-based costing system for each of the two products. (Round your intermediate calculations and final answers to 2 decimal places. Enter your answers as positive values.) Traditional unit product cost ABC unit product cost Difference $ Product V9 Product M6 0.00 $ 0.00
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Calculation of unit cost under traditional method Particulars Product V9 Product M6 Direct material ... View the full answer
Related Book For
Cost Accounting A Managerial Emphasis
ISBN: 978-0133428704
15th edition
Authors: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
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