Any help please! 17-6 Exercise 17-6 Perdon Corporation manufactures safes-large

Question

Any help please! 17-6

Exercise 17-6 Perdon Corporation manufactures safes-large mobile safes, and large walk-in stationary bank safes. As part of its annual budgeting process, Perdon is analyzing the profitability of its two products Part of this analysis involves estimating the amount of overhead to be allocated to each product line. The information shown below relates to overhead Mobile Safes Safes Units planned for production Material moves per product line Purchase orders per product line Direct labor hours per product line 210 290 440 800 50 200 350 1,700 The total estimated manufacturing overhead was $276,100. Under traditional costing (which assigns overhead on the basis of direct labor hours), what amount of manufacturing overhead costs are assigned to: (Round intermediate calculations and answers to 2 decimal places, e.g. $12.25.) (1) One mobile safe (2) One walk-in safe LINK TO TEXT The total estimated manufacturing overhead of $276,100 was comprised of $162,200 for material handling costs and $113,900 for purchasing activity costs. Under activity-based costing (ABC): (Round intern ediate calculations and answers to 2 decimal places, e.g. $12.25.) (1) What amount of material handling costs are assigned to: (a) One mobile safe (b) One walk-in safe

Explanation / Answer

On the basis of direct labour hours

276100 / 2500 (800+ 1700) hours

=> 110.44 per direct labour hour

One mobile safe => 800 * $110.44 => $88345

$ 88345 / 210 => $420.69 per unit

Walk in Safe => 1700 * $110.44 => $ 187748

$187748 / 50 => $3754.96 per unit

MATERIAL HANDLING => $162200 PURCHASING ACTIVITY=> $113900

Material Handling

162200 / 490 (290 +200 )moves => 331.02 per moves

one mobile safe => 290 * $ 331.02 => $95995.8

$95995.8 / 210 => $457.12 per unit

Walk Safe => 200 * $331.02 => $66204

$66204 / 50 => $1324.08 per unit

Purchasing Activity

113900 / 790 ( 440 + 350 ) orders => $ 144.18 per order

One mobile safe => 440 * $ 144.18 => $63439.2

$63439.2 / 210 => $302.09 per unit

Wlak in safe => 350 * $ 144.18 =>$50463

$50463 / 50 => $1009.26 per unit

Answer 3

Under tradtional Costing

Mobile safe => $420.69 per unit

Walk in safe =>  $3754.96 per unit

Under ABC

Mobile safe => $110.44 per direct labour hour

Walk in safe => $110.44 per direct labour hour

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