My Btacdtboard C Chapter 3 Exerasesxv hm.tpx-09088928292103642 1523583343506 Cha

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My Btacdtboard C Chapter 3 Exerasesxv hm.tpx-09088928292103642 1523583343506 Chapter 3 Exercises CQuesnon 1 (of 5) · 1000 points Pacifica Industrial Products Corporation makes two products, Product H and Product L. Product H is expected to sell 32,000 units next year and Product L is expected to sell 6.400 units. A unit of either product requires 0.8 drect labor-hours The company's total manufacturing overhead for the year is expected to be $2,611,200 Required: 1.a. The company currently applies manufacturing overhead to products using direct labor-hours as the allocation base. If this method is followed, how much overhead cost per unit would be applied to each product? (Round your answers to 2 decimal places Overhead cost per unit 1.b. Compute the total amount of overhead cost that would be applied to each product Total overhead cost Management is considering an activity-based costing system and would like to know what impact this change might have on product costs. For purposes of discussion, it has been suggested that all of the manufacturing overhead be treated as a product-level cost The total manufacturing overhead would be divided in half between the two products, with $1,305,600 assigned to Product H and $1,305,600 assigned to Product L 2. If this suggestion is followed, how much overhead cost per unit would be assigned to eách product? (Round your answers to 2 decimal places.) Product H P Overhead cost per unit O Type here to search

Explanation / Answer

1 & b)

2)

Product H Product L Total Units 32000 6400 Hours required per unit .80 .80 Total hours used 32000*.8=25600 5120 30720 Total Overhead allocation (part B) 2611200*25600/30720=2176000 2611200*5120/30720=435200 2611200 overhead per unit (part a) 2176000/32000 =$ 68 435200/6400 =$ 68

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