Exercise 4-5 (Part Level Submission) Mobile Safes Walk-in Safes (a) LINK TO TEXT

Question

Exercise 4-5 (Part Level Submission)

Mobile Safes

Walk-in Safes

(a)

LINK TO TEXT

(b1)

LINK TO TEXT

(b2)

Exercise 4-5 (Part Level Submission)

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

Walk-in Safes

Units planned for production 210 51 Material moves per product line 310 250 Purchase orders per product line 450 340 Direct labor hours per product line 810 1,710

Explanation / Answer

a)Total direct labor hours =810+1710=2520 hours

b)

b-2

One mobile safe One walk in safe Overhead allocated 276000*810/2520 = 88714.29 187285.71    [276000*1710/2520] Units 210 51 cost per unit 88714.29/210 = 422.45 187285.71/51 = 3672.27

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