kt.xy? Week 2 Homework Assig × Secure https//newconnect.mheducation.com/flow/con
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kt.xy? Week 2 Homework Assig × Secure https//newconnect.mheducation.com/flow/connect.htm ek 2 Homework Assignment The following data are for the two products produced by Tadros Company Direct materials Direct labor hours Machine hours Batches Velume Engineering modifications Number of customers Market price 515 per unit 524 per unit 0.3 DLH per unit e.1 P per unit 125 batches 10,000 units 12 modifications 1.6 DLH per unit 1.2 PH per unit 225 batches 2,809 units 58 modifications eBook Print 30 per unit 129 per unit The company's direct labor rate is $20 per direct labor hour (DLH). Additional information follows Costs Dri Indirect manufecturing $24,500 Engineering modifications EngineerIng support Electricity Setup costs 4,900 Machine hours 52,580 Batches ionmanufacturing Custoner service 81,088 Number of custoners Required: Loss amounts should be indicated with minus sign Round your per unit cost answers to 2 decimal places.) Prev 1 of 6 Next > : e here to searchExplanation / Answer
Answer 1. Total Overhead = $24,500 + $34,0000 + $52,500 = $111,000 Total labor Hours = (0.30 Hrs X 10,000 Units) Product A + (1.60 Hrs X 2,000 Units) Product B Total labor Hours = 6,200 DLH Plantwide Overhead Rate = $111,000 (Total Overhead) / 6,200 DLH = $17.90 per DLH (Approx.) Ovrehead Assigned Activity Driver Plantwide OH Rate Total Overhead Cost Units Produced OH Cost per Unit Product A 3,000 DLH 17.90 per DLH 53,710 10,000 5.37 Product B 3,200 DLH 17.90 per DLH 57,290 2,000 28.65 Product A Product B Direct Materials 15.00 24.00 Direct Labor 6.00 32.00 Overhead Cost 5.37 28.65 Total manufacturing Cost per Unit 26.37 84.65 Answer 1.2 Product A Product B Market Price 30.00 120.00 Manf. Cost per Unit 26.37 84.65 Gross Profit per Unit 3.63 35.35 Answer 2.2 Product A Product B Gross Profit per Unit 3.63 35.35 Units Purchase per Customer 20.00 5.00 Gross Profit per Customer 72.58 176.77 Cost of providing Customer Service to each customer = $81,000 (Customer Service Cost) / 900 Customers Cost of providing Customer Service to each customer = $90 per Customer (Approx.) Product A Product B Gross Profit per Customer 72.58 176.77 Customer Service Cost per customer 90.00 90.00 Gross Profit per Customer (17.42) 86.77 Is profit Adeqaute using Traditional No Yes Answer 3. Calculation of Overhead Rate Under ABC Method Activity Cost Pool Estimated Overhead Expected use of Cost Drivers Activity-Based Overhead rate Enginnering Support 24,500 70 Engg. Mod. 350.00 per Engg. Mod. Electricity 34,000 3,400 Mach Hrs 10.00 per Mach Hr Setup Costs 52,500 350 batches 150.00 per batch Total 111,000 Assigning Overhead Cost to Product Model Using ABC Method Activity Based Overhead Rate Product A Product B Cost Driver Incurred OH Allocated Cost Driver Incurred OH Allocated Enginnering Support 350.00 per Engg. Mod. 12 Engg. Mod. 4,200 58 Engg. Mod. 20,300 Electricity 10.00 per Mach Hr 1,000 Mach Hrs 10,000 2,400 Mach Hrs 24,000 Setup Costs 150.00 per batch 125 batches 18,750 225 batches 33,750 Total 32,950 78,050 No. of Units Produced 10,000 2,000 OH Cost per Unit 3.30 39.03 Total Manufacuring Cost Product A Product B Direct Material Per Unit 15.00 24.00 Direct Labor Per Unit 6.00 32.00 Overhead per Unit 3.30 39.03 Total Manf. Cost per Unit 24.30 95.03 Product A Product B Market Price Per Unit 30.00 120.00 Total Manf. Cost per Unit 24.30 95.03 Gross Profit per Unit 5.71 24.98 Product A Product B Gross Profit per Unit 5.71 24.98 Units Purchase per Customer 20 5 Gross Profit per Cutomer 114.10 124.88 Answer 4. Product A Product B Gross Profit per Cutomer 114.10 124.88 Customer Service Cost per customer 90.00 90.00 Gross Profit per Customer 24.10 34.88 Is profit Adeqaute using ABC Yes Yes Answer 5. Activity Based Costing method
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