Reynoso Corporation manufactures titanium and aluminum tennis 7 racquets. Reynos

Question

Reynoso Corporation manufactures titanium and aluminum tennis 7 racquets. Reynoso's total overhead costs consist of assembly costs and inspection costs. The following information is available Cost Assembly Inspections Aluminum 500 mach. hours 150 1900 labor hours 500 mach. hours 350 2100 labor hours $68000 $106000 Reynoso is considering switching from one overhead rate based on labor hours to activity-based costing Using activity-based costing, how much assembly cost is assigned to titanium racquets? a. $34000 b. $35700 C. $47600 d. $19950 Hartley Company produces two products, Flower and Planter. Flower is a high-volume item totaling 20000 units annually. Planter is a low-volume item totaling only 6000 units per year. Flower requires 1 hour of direct labor for completion, while each unit of Planter requires 2 hours. Therefore, total annual direct labor hours are 32000 (20000 12000). Expected annual manufacturing overhead costs are $1120000. Hartley uses a traditional costing system and assigns overhead based on direct labor hours. Each unit of Planter would be assigned overhead of a. $35 b need more information to compute. C. $43 $70

Explanation / Answer

7) Assembly cost assigned to titanium = 68000/1000*500 = 34000

so answer is a) $34000

9) Overhead rate = 1120000/32000 = 35 per hour

Overhead assigned to planter = 35*12000 = 420000

Overhead cost per unit of planter = 420000/6000 = 70

so answer is d) $70

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