Warren Furniture produces three models of desk chairs: Basic, Ergo, and Exec. The cost system at...

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Warren Furniture produces three models of desk chairs: Basic, Ergo, and Exec. The cost system at the Warren production facility allocates overhead cost on the basis of direct labor hours. The company is considering updating its cost system to an activity-based costing system and is interested in understanding the effects. A study team composed of the production facility's finance and operations groups has identified three overhead cost pools along with appropriate cost drivers for each pool. Costa $2,205,000 1,047,000 618,000 Coat Pools Assembly Setup Activity Drivers Direct labor-hours Number of setups Number of tests Quality assurance The plans for production for the next year and the budgeted direct costs and activity by product line are as follows: Direct costs (material and labor) Direct labor-hours Machine-hours Number of setups Number of testa Number of units produced 1. Assembly 2. Setup 3. Quality assurance Banic $1,189,200 25,200 26,000 40 140 7,200 Products Ergo $1,167,000 12,000 14,000 72 100 3,000 Exec $907,200 Required: a. The current cost accounting system charges overhead to products based on machine-hours. What unit product costs will be reported for the three products if the current cost system continues to be used? b. What are the cost driver rates for the three cost pools identified by the study team? d. What unit product costs will be reported for the three products if the ABC system proposed by the study team is adopted? e. How would the activities identified by the study team be classified in terms of the levels of the cost hierarchy? Complete this question by entering your answers in the tabs below. 7,800 11,600 120 60 1,200 Enabled: Final Exam, Part I Chs 9 and 11 i Direct costs (material and labor) Direct labor-hours Machine-hours Number of setups Number of tests Number of units produced 1. Assembly 2. Setup 3. Quality assurance Basic $ 1,189,200 25,200 26,000 48 140 7,200 Required: a. The current cost accounting system charges overhead to products based on machine-hours. What unit product costs will be reported for the three products if the current cost system continues to be used? b. What are the cost driver rates for the three cost pools identified by the study team? d. What unit product costs will be reported for the three products if the ABC system proposed by the study team is adopted? e. How would the activities identified by the study team be classified in terms of the levels of the cost hierarchy? Complete this question by entering your answers in the tabs below. Total cost Per-unit cost Basic Ergo Products Ergo. $1,167,000 12,000 14,000 72 100 3,000 Required E Required A Required B Required D The current cost accounting system charges overhead to products, based on machine-hours. What unit product costs will be reported for the three products if the current cost system continues to be used? Exec Exec $ 907,200 < Required A 7,800 11,600 120 60 1,200 Required B > Complete this question by entering your answers in the tabs below. Required A Required B Required D Required E What are the cost driver rates for the three cost pools identified by the study team? Note: Round your final answer to the nearest whole dollar. Assembly Setup Quality assurance per direct labor-hour per setup per test < Required A Required D > Complete this question by entering your answers in the tabs below. Required A Required B Required D Required E What unit product costs will be reported for the three products if the ABC system proposed by the study team is adop Note: Round "Per unit cost" answers to 2 decimal places. Basic Ergo Total cost Per-unit cost Exec < Required B Required E > Complete this question by entering your answers in the tabs below. Required A Required B Required D How would the activities identified by the study team be classified in terms of the levels of the cost hierarchy? Activity Hierarchy Level Required E 1. Assembly 2. Setups 3. Quality assurance < Required D Required E > Warren Furniture produces three models of desk chairs: Basic, Ergo, and Exec. The cost system at the Warren production facility allocates overhead cost on the basis of direct labor hours. The company is considering updating its cost system to an activity-based costing system and is interested in understanding the effects. A study team composed of the production facility's finance and operations groups has identified three overhead cost pools along with appropriate cost drivers for each pool. Costa $2,205,000 1,047,000 618,000 Coat Pools Assembly Setup Activity Drivers Direct labor-hours Number of setups Number of tests Quality assurance The plans for production for the next year and the budgeted direct costs and activity by product line are as follows: Direct costs (material and labor) Direct labor-hours Machine-hours Number of setups Number of testa Number of units produced 1. Assembly 2. Setup 3. Quality assurance Banic $1,189,200 25,200 26,000 40 140 7,200 Products Ergo $1,167,000 12,000 14,000 72 100 3,000 Exec $907,200 Required: a. The current cost accounting system charges overhead to products based on machine-hours. What unit product costs will be reported for the three products if the current cost system continues to be used? b. What are the cost driver rates for the three cost pools identified by the study team? d. What unit product costs will be reported for the three products if the ABC system proposed by the study team is adopted? e. How would the activities identified by the study team be classified in terms of the levels of the cost hierarchy? Complete this question by entering your answers in the tabs below. 7,800 11,600 120 60 1,200 Enabled: Final Exam, Part I Chs 9 and 11 i Direct costs (material and labor) Direct labor-hours Machine-hours Number of setups Number of tests Number of units produced 1. Assembly 2. Setup 3. Quality assurance Basic $ 1,189,200 25,200 26,000 48 140 7,200 Required: a. The current cost accounting system charges overhead to products based on machine-hours. What unit product costs will be reported for the three products if the current cost system continues to be used? b. What are the cost driver rates for the three cost pools identified by the study team? d. What unit product costs will be reported for the three products if the ABC system proposed by the study team is adopted? e. How would the activities identified by the study team be classified in terms of the levels of the cost hierarchy? Complete this question by entering your answers in the tabs below. Total cost Per-unit cost Basic Ergo Products Ergo. $1,167,000 12,000 14,000 72 100 3,000 Required E Required A Required B Required D The current cost accounting system charges overhead to products, based on machine-hours. What unit product costs will be reported for the three products if the current cost system continues to be used? Exec Exec $ 907,200 < Required A 7,800 11,600 120 60 1,200 Required B > Complete this question by entering your answers in the tabs below. Required A Required B Required D Required E What are the cost driver rates for the three cost pools identified by the study team? Note: Round your final answer to the nearest whole dollar. Assembly Setup Quality assurance per direct labor-hour per setup per test < Required A Required D > Complete this question by entering your answers in the tabs below. Required A Required B Required D Required E What unit product costs will be reported for the three products if the ABC system proposed by the study team is adop Note: Round "Per unit cost" answers to 2 decimal places. Basic Ergo Total cost Per-unit cost Exec < Required B Required E > Complete this question by entering your answers in the tabs below. Required A Required B Required D How would the activities identified by the study team be classified in terms of the levels of the cost hierarchy? Activity Hierarchy Level Required E 1. Assembly 2. Setups 3. Quality assurance < Required D Required E >

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Required A Unit Product Costs under Current System The current system allocates overhead based on machinehours Step 1 Calculate the total machinehours Total machinehours Basic machinehours Ergo machin... View the full answer