Ellis Perry is an electronics components manufacturer. Information about the com

Question

Ellis Perry is an electronics components manufacturer. Information about the company's two products follows: Units produced Direct labor hours required for production Units per batch Shipping weight per unit AM-2 19,200 27,000 4,000 FM-9 2,940 25,000 70 0.50 lbs 4 lbs The company incurs $1,565,868 in overhead per year and has traditionally applied overhead on the basis of direct labor hours (a) Your answer is correct. (i) How much overhead will be allocated to each product using the traditional direct labor hours allocation base? (Round per unit rates to 2 decimal places, e.g. 3.54 and final answers to 0 decimal places, e.g. 45,000.) AM-2 FM-9 Overhead allocated to each product 812,970 752,750 (ii) What overhead cost per unit will be allocated to each product? (Round answers to 2 decimal places, e.g. 15.25.) AM-2 FM-9 Overhead cost per unit 42.34 256.03

Explanation / Answer

i) Calculate overhead cost allocated under ABC :

2) Overhead cost per unit :

AM-2 FM-9 Assembly cost 648000 600000 Setup cost 13104 114660 Packaging cost 85440 104664 Total overhead cost 746544 819324

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