I already know part 1- see answer. Please assist with part 2. Thank you! Kunkel
ID: 2373609 • Letter: I
Question
I already know part 1- see answer. Please assist with part 2. Thank you!
Kunkel Company makes two products and uses a conventional costing system in which a single plantwide predetermined overhead rate is computed based on direct labor-hours. Data for the two products for the upcoming year follow:
The company's manufacturing overhead costs for the year are expected to be $748,592. Using the company's conventional costing system, compute the unit product costs for the two products. (Do not round intermediate calculation. Round your final answers to 2 decimal places.)
ANSWER: MERCON: $29.02 WURCON: $31.53
Management is considering an activity-based costing system in which half of the overhead would continue to be allocated on the basis of direct labor-hours and half would be allocated on the basis of engineering design time. This time is expected to be distributed as follows during the upcoming year:
Compute the unit product costs for the two products using the proposed ABC system. (Round your final answers to 2 decimal places.)
Kunkel Company makes two products and uses a conventional costing system in which a single plantwide predetermined overhead rate is computed based on direct labor-hours. Data for the two products for the upcoming year follow:
Explanation / Answer
Calculate Overhead rate:
Total overheads -- $748,592
Total labor hours
18,000 x 0.46 + 80000 x .28 = 8280 + 22400 = 30680 labor hours
Rate per labor hour = $748592/30680 = $24.4
Apply the overhead rate:
Direct materials cost per unit--- $12.30---- $22.20
Direct labor cost per unit -------------5.50 -----2.50
Direct labor-hours per unit ----------- 0.46*24.4 = 11.224 ----- 0.28*24.4 = 6.832
Total per unit cost -------------------- 29.024 ---- 31.538
In the second part applying ABC in part is not a good practice.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.