Expected Activity $ 375,000 What is the traditional unit product cost for the De
ID: 2398740 • Letter: E
Question
Expected Activity
$ 375,000
What is the traditional unit product cost for the Deluxe model now? (Round your intermediate calculations and final answer to 2 decimal places.)
What is the traditional unit product cost for the Tourist model? (Round your intermediate calculations and final answer to 2 decimal places.)
What is the ABC unit product cost for the Deluxe model? (Round your intermediate calculations and final answer to 2 decimal places.)
What is the ABC unit product cost for the Tourist model? (Round your intermediate calculations and final answer to 2 decimal places.)
Chapter 3: Applying Excel 2 3 Enter a formula into each of the cells marked with a ? below 4 Review Problem: Activity-Based Costing 5 6 Data 7 Deluxe Tourist 8 Annual sales in units 1,000 9,000 9 Direct materials per unit $33 $33 10 Direct labor-hours per unit 1 1 11 12 Direct labor rate $17 per DLH 13 14 Estimated 15 Overhead
Expected Activity
16 Activities and Activity Measures Cost Deluxe Tourist Total 17 Labor related (direct labor-hours) $ 35,000 1,000 9,000 10,000 18 Machine setups (setups) 120,000 40 60 100 19 Production orders (orders) 70,000 35 15 50 20 General factory (machine-hours) 150,000 10,000 10,000 20,000 21$ 375,000
Explanation / Answer
Answer a & b. Predetermined Overhead Rate = $375,000 (Total Overhead) / 10,000 DLH Predetermined Overhead Rate = $37.50 per DLH Calculation of Unit Product Cost Under Traditional Costing Deluxe Moderate Direct Material 33.00 33.00 Direct Labor 17.00 17.00 Applied Overhead 37.50 37.50 Product Cost per Unit 87.50 87.50 Answer c. ABC Costing Activity Overhead Cost Driver Quantity Allocation Rate Indirect Costs Labor Related 35,000.00 10,000 dlh 3.50 per dlh Machine Setups 120,000.00 100 setups 1,200.00 per setups Production Orders 70,000.00 50 orders 1,400.00 per order General Factory 150,000.00 20,000 mach hrs 7.50 per mach hrs Total 375,000.00 Assigning Overhead Cost to Product Model Using ABC Method Activity Based Overhead Rate Deluxe Tourist Cost Driver Incurred OH Allocated Cost Driver Incurred OH Allocated Labor Related 3.50 per dlh 1,000 dlh 3,500.00 9,000 dlh 31,500.00 Machine Setups 1,200.00 per setups 40 setups 48,000.00 60 setups 72,000.00 Production Orders 1,400.00 per order 35 orders 49,000.00 15 orders 21,000.00 General Factory 7.50 per mach hrs 10,000 mach hrs 75,000.00 10,000 mach hrs 75,000.00 Total Overhead 175,500 199,500 No. Of Units 1,000 9,000 Overhead per Book 175.50 22.17 Calculation of Unit Product Cost Under ABC Costing Deluxe Moderate Direct Material 33.00 33.00 Direct Labor 17.00 17.00 Applied Overhead 175.50 22.17 Product Cost per Unit 225.50 72.17
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