Exercise 17-10 Using ABC for strategic decisions LO P1, P3 Consider the followin

Question

Exercise 17-10 Using ABC for strategic decisions LO P1, P3 Consider the following data for two products of Gitano Manufacturing (Loss amounts should be indicated with a minus sign. Round your intermediate calculations and "OH rate and cost per unit" answers to 2 decimal places) Product A Product B 11,8 units 9.14 DLH per unit 5 2.30 per unit 1,380 units 9.25 DLH per unit 5 2.90 per unit Number of units produced Direct labor cost ( $30 per DEH) Direct naterials cost tint Activity Overhead cost Machine setup Materials handling Quality control inspections 5 53,625 55,900 72,28 $180,905 Required 1. Using direct labor hours as the basis for assigning overhead costs, determine the total production cost per unit for each product line. S 180 905 0 per direct labor hour Direct labor hours Activity Driver Plantwide OH rate Total Overhead Cost Units Produced OH Cost per unit Overhead Assigned .

Explanation / Answer

Note: i have tried my best for correct solution, still your answer not match please ask in comment, sometime answer not match due to small rounding errors, Thanks.

1 Using direct labor hours as the basis for assigning overhead costs, determine the total production cost per unit for each product line. Overhead Costs $          180,905 $                        97.00 per direct labor hour Direct labor hours 1865 *11000 x 0.14 + 1300 x 0.25 = 1865 Overhead Assigned Activity Driver Plantwide OH rate Total Overhead cost Units Produced OH Cost per unit Product A 1540 $                        97.00 $                  149,380.00 11000 $                            13.58 Product B 325 $                        97.00 $                    31,525.00 1300 $                            24.25 Total manufacturing cost per unit: Product A Product B Direct material cost per unit $                          2.30 $                               2.90 Direct labor cost per unit                              4.20                                   7.50 Overhead cost per unit                            13.58                                 24.25 Total manufacturing cost $                        20.08 $                            34.65 2 If the market price for Product A is $26.32 and the market price for Product B is $58, determine the profit or loss per unit for each product. Product A Product B Market Price $                        26.32 $                            58.00 Manufacturing cost per unit $                        20.08 $                            34.65 Profit(loss) per unit $                          6.24 $                            23.35 3 ABC assignment of overhead Machine Setup Overhead Cost $             53,625 $                  2,062.50 per setup Activity Driver 26 Materials Handling Overhead Cost $             55,000 $                          0.44 per part Activity Driver 124300 =11000*10+1300*11 Quality Control Overhead Cost $             72,280 $                     260.00 per hour Activity Driver 278 Overhead assigned Activity Driver Activity Rate Total Overhead Cost Product A Machine Setup 6 Setups $                      2,062.50 per setup $                   12,375.00 Materials Handling 110000 Part $                               0.44 per part $                   48,400.00 Quality Control 58 hours $                          260.00 per hour $                   15,080.00 $                   75,855.00 ÷ 11000 Overhead Cost per unit $                              6.90 Overhead assigned Activity Driver Activity Rate Total Overhead Cost Product B Machine Setup 20 Setups $                      2,062.50 per setup $                   41,250.00 Materials Handling 14300 Part $                               0.44 per part $                      6,292.00 Quality Control 220 hours $                          260.00 per hour $                   57,200.00 $                 104,742.00 ÷ 1300 Overhead Cost per unit $                            80.57 Total manufacturing cost per unit: Product A Product B Direct material cost per unit $                          2.30 $                               2.90 Direct labor cost per unit                              4.20                                   7.50 Overhead cost per unit                              6.90                                 80.57 Total manufacturing cost $                        13.40 $                            90.97

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

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