Rooney Company produces commercial gardening equlpment. Since production Is high

Question

Rooney Company produces commercial gardening equlpment. Since production Is highly automated, the company allocates ts overhead costs to product lines using activlty-based costing. The costs and cost drivers assoclated wlth the four overhead activity cost pools follow: Activities Cost Cost driver Unit Level $ 23,108 1,189 labor hrs Batch Level $19,740 47 setups $14,e80 Percentage of use Facility Level $132,800 12,880 units Production of 810 sets of cutting shears, one of the company's 20 products, took 160 labor hours and 7 setups and consumed 15 percent of the product-sustalning activties. Required a. Had the company used labor hours as a company wide allocation base, how much overhead would it have allocated to the cutting shears? b. How much overhead is allocated to the cutting shears using activity-based costing? c. Compute the overhead cost per unlt for cutting shears first using activity-based costing and then using direct labor hours for allocation if 810 units are produced. If direct product costs are $180 and the product Is priced at 30 percent above cost for what price would the product sell under each allocation system? Complete this question by entering your answers in the tabs below. Required ARequired C and B Had the company used labor hours as a c ide allocation base, how much overhead would it have allocated to the cutting shears? How much overhead is allocated to the cutting shears using activity-based costing? (Round intermediate calculations to 2 decimal places. Round your final answers to the nearest whole dollar amount.) a. Allocated cost b.Allocated cost

Explanation / Answer

Ans a Manufacturing overhed rate per hour manufacturing overhead/Direct labor hours (23100+19740+14000+132000)/1100 171.67 Overhead cost allocated 160*171.67 27467 ans a ans b Cutting Cost C Cost driver D Activity rate C/D Activty driver Total cost 23100 1100 21 160 3360 19740 47 420 7 2940 14000 100 140 15 2100 132000 12000 11 810 8910 Overhead cost 17310 No. of units 810 Overhead cost per unit 21.37 Allocated overhead 21.37*810 17310 ansb ans c ABC Labor Hrs Allocated overhead 21.37 171.67 Direct cost 180 190 Total cost per unit T 201.37 361.67 Desirec Profit (30%*T) 60.41 108.50 Sales Price 261.78 470.17 If any doubt please comment

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.