#17 Consider the following data for two products of Gitano Manufacturing. (Loss
ID: 2333751 • Letter: #
Question
#17
Consider the following data for two products of Gitano Manufacturing. (Loss amounts should be indicated with a minus sign. Round your intermediate calculations and "OH rate and cost per unit" answers to 2 decimal places) Product A Product B 1,500 units 0.23 DLH per unit s 2.10 per unit Number of units produced 11,000 units 0.18 DLH per unit Direct labor cost ( $24 per DLH) Direct materials cost 2.30 per unit Activity Overhead costs Machine setup Materials handling Quality control inspections $73,385 60,000 64,240 $197,625 Required 1. Using direct labor hours as the basis for assigning overhead costs, determine the total production cost per unit for each product line Direct labor hours OH Cost per unit Overhead Assigned ProductA Product B Activity Driver Plantwide OH rateTotal Overhead Cost Units Produced Product A Product BExplanation / Answer
1) Labour hours = ( Units of A * Labour hours in A per unit) + ( Labour hours in B per unit * Units of B)
= (11000*0.18) + (1500*0.23) =1980 + 345 = 2325 Hours
Overhead rate = Total overhead / Total labour hours = 197625/2325 = 85 per labour hour
Overhead costs = Labour hours * overhead rate
A = 1980*85 = 168300
B = 345*85 = 29325
Overhead cost per unit = Overhead / NO of units
A = 168300/11000 = 15.30
B = 29325/1500 = 19.55
Cost per unit
2) Profit per unit
3) ABC Costing
calculation of activity rate
4)
Particulars A B Direct material 2.3 2.1 Direct labour ( 24* DLH PER UNIT) 4.32 5.52 MFG Overhead 15.30 19.55 Total cost 21.92 27.17Related Questions
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