Tamarindo Company produces speakers (Model A and Model B). Both products pass through two producing departments....

  

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Tamarindo Company produces speakers (Model A and Model B). Both products pass through two producing departments. Model A's production is much more labor- intensive than Model B's. Model B is also the more popular of the two speakers. The following data have been gathered for the two products: Units produced per year Prime costs Direct labor hours Machine hours Production runs Inspection hours Maintenance hours Setup costs Inspection costs Machining Maintenance Total.. Overhead Costs Product Data Model A 30,000 $200,000 140,000 20,000 40 800 10,000 $ 360,000 280,000 320,000 360,000 $1,320,000 Model B 300,000 $2,000,000 300,000 200,000 60 1,200 90,000 Required 1. Compute the overhead cost per unit for each product using a plantwide rate based on direct labor hours. 2. Compute the overhead cost per unit for each product using activity-based costing. 3. Suppose that Tamarindo decides to use departmental overhead rates. There are two departments: Department 1 (machine intensive) with a rate of $4.66 per machine hour, and Department 2 (labor intensive) with a rate of $1.20 per direct labor hour. The consumption of these two drivers is given below: 4-17 Plantwide versus Departmental Rates; Product Costing Accuracy; Pool Rates LO2, LO3, LO4, LO5 EXCEL Department 1 Department 2 Machine Hours Direct Labor Hours Model A 10,000 Model B 170,000 130,000 270,000 Compute the overhead cost per unit for each product by using departmental rates. (Note: Round to two decimal places.) 4.Using the activity-based product costs as the standard, comment on the ability of departmental rates to improve the accuracy of product costing. Did the departmental rates do better than the plantwide rate? Tamarindo Company produces speakers (Model A and Model B). Both products pass through two producing departments. Model A's production is much more labor- intensive than Model B's. Model B is also the more popular of the two speakers. The following data have been gathered for the two products: Units produced per year Prime costs Direct labor hours Machine hours Production runs Inspection hours Maintenance hours Setup costs Inspection costs Machining Maintenance Total.. Overhead Costs Product Data Model A 30,000 $200,000 140,000 20,000 40 800 10,000 $ 360,000 280,000 320,000 360,000 $1,320,000 Model B 300,000 $2,000,000 300,000 200,000 60 1,200 90,000 Required 1. Compute the overhead cost per unit for each product using a plantwide rate based on direct labor hours. 2. Compute the overhead cost per unit for each product using activity-based costing. 3. Suppose that Tamarindo decides to use departmental overhead rates. There are two departments: Department 1 (machine intensive) with a rate of $4.66 per machine hour, and Department 2 (labor intensive) with a rate of $1.20 per direct labor hour. The consumption of these two drivers is given below: 4-17 Plantwide versus Departmental Rates; Product Costing Accuracy; Pool Rates LO2, LO3, LO4, LO5 EXCEL Department 1 Department 2 Machine Hours Direct Labor Hours Model A 10,000 Model B 170,000 130,000 270,000 Compute the overhead cost per unit for each product by using departmental rates. (Note: Round to two decimal places.) 4.Using the activity-based product costs as the standard, comment on the ability of departmental rates to improve the accuracy of product costing. Did the departmental rates do better than the plantwide rate?