Secure htt t.htm Ch 04 Ex 49 6 Help Save &Exit; Submit Exercise 4-9 Using ABC to

Question

Secure htt t.htm Ch 04 Ex 49 6 Help Save &Exit; Submit Exercise 4-9 Using ABC to assess prices LO P3 n thei department. The mechanical systems are combined with the housing assembly in its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow Quantity 457,65 Number of bstches Machining Setups 8,200 326,708 Number of setups Finishing Welding 270,400 welding hours inspecting Rework Rework orders 170 s 509,15e 04 000 510 6,980 6,900 S 2 purchase orders e,700 Nuber of units Number of units 335,100 l production information concerning its two product lines follows odel 145 Hodel 212 Units produced Type here to search

Explanation / Answer

STATEMENT SHOWING ACTIVITY RATE OF ACTIVITY POOL Total Expected Activity Model 145 model 212 ACTIVITY COST POOL Overheads Activity Rate Activity OH cost Activity OH cost Components: Changeover 457650 810 565 405 228825 405 228825 machining 382940 8,200 47 2850 133095 5350 249845 Setup 326700 180 1,815 90 163350 90 163350 Finishing: Welding 270400 5,200 52 1200 62400 4000 208000 Inspecting 287100 870 330 510 168300 360 118800 Rework 41650 170 245 100 24500 70 17150 Support: Purchasing 204000 510 400 340 136000 170 68000 providing Space 30700 6,900 4 2300 10233.33 4600 20466.67 Provising Utilities 100400 6,900 15 2300 33466.67 4600 66933.33 TOTAL OVERHEADS 960170 1141370 Number of units 2300 4600 OH cost 417.4652 248.1239 UNIT PRODUCT COST: MODEL 145 MODEL 212 Material and Labouor cost 190 120 Add: Overheads 417.47 248.12 Unit product Cost 607.47 368.12 Product Margin MODEL 145 MODEL 212 Market price 608.03 368.61 Less: Unit product cost 607.47 368.12 Profit/(loss) 0.56 0.49

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