Cabigas Company manufactures two products, Product C and Product D. .pdf
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Cabigas Company manufactures two products, Product C and Product D. .pdf
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Cabigas Company manufactures two products, Product C and Product D. The company estimated it would incur $355,840 in manufacturing overhead costs during the current period. Overhead currently is applied to the products on the basis of direct labor-hours. Data concerning the current period\'s operations appear below: The company is considering using an activity-based costing system to compute unit product costs for external financial reports instead of its traditional system based on direct labor-hours. The activity-based costing system would use three activity cost pools. Data relating to these activities for the current period are given below: 8,160 Determine the unit product cost of each product for the current period using the activity-based costing approach. (Round your intermediate calculations and final answers to 2 decimal places.) Product C Product D Estimated volume2,000units2,700units Direct labor-hours per unit4.50hours1.80hour Direct materials cost per unit$24.00$26.60 Direct labor cost per unit$34.00$11.60 Solution Calculation of Activity rate : Total Cost Total Activity Activity rate A B A/B Machine setups $ 22,230 390 $ 57.00 Purchase orders $ 162,250 2750 $ 59.00 General factory $ 171,360 8160 $ 21.00 Calculation of Overhead Costs For Product C: Activity Activity rate Overhead Cost A B A*B Machine setups 180 $ 57.00 $ 10,260.00 Purchase orders 1250 $ 59.00 $ 73,750.00 General factory 5000 $ 21.00 $ 105,000.00 Total Overhead $ 189,010.00 For Product D: Activity Activity rate Overhead Cost A B A*B Machine setups 210 $ 57.00 $ 11,970.00 Purchase orders 1500 $ 59.00 $ 88,500.00 General factory 3160 $ 21.00 $ 66,360.00 Total Overhead $ 166,830.00 Calculation of unit product cost : Product A Product B Direct materials cost per unit $ 24.00 $ 26.60 Direct labor cost per unit $ 34.00 $ 11.60 Overhead Cost per unit $ 94.51 $ 61.79 (189010/2000) (166830/2700) $ 152.51 $ 99.99 Calculation of Activity rate : Total Cost Total Activity Activity rate A B A/B Machine setups $ 22,230 390 $ 57.00 Purchase orders $ 162,250 2750 $ 59.00 General factory $ 171,360 8160 $ 21.00 Calculation of Overhead Costs For Product C: Activity Activity rate Overhead Cost A B A*B Machine setups 180 $ 57.00 $ 10,260.00 Purchase orders 1250 $ 59.00 $ 73,750.00 General factory 5000 $ 21.00 $ 105,000.00 Total Overhead $ 189,010.00 For Product D: Activity Activity rate Overhead Cost A B A*B Machine setups 210 $ 57.00 $ 11,970.00 Purchase orders 1500 $ 59.00 $ 88,500.00 General factory 3160 $ 21.00 $ 66,360.00 Total Overhead $ 166,830.00 Calculation of unit product cost : Product A Product B Direct materials cost per unit $ 24.00 $ 26.60 Direct labor cost per unit $ 34.00 $ 11.60 Overhead Cost per unit $ 94.51 $ 61.79 (189010/2000) (166830/2700) $ 152.51 $ 99.99.
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Cabigas Company manufactures two products, Product C and Product D. .pdf
- Cabigas Company manufactures two products, Product C and Product D. The company estimated it would incur $355,840 in manufacturing overhead costs during the current period. Overhead currently is applied to the products on the basis of direct labor-hours. Data concerning the current period's operations appear below: The company is considering using an activity-based costing system to compute unit product costs for external financial reports instead of its traditional system based on direct labor-hours. The activity-based costing system would use three activity cost pools. Data relating to these activities for the current period are given below: 8,160 Determine the unit product cost of each product for the current period using the activity-based costing approach. (Round your intermediate calculations and final answers to 2 decimal places.) Product C Product D Estimated volume2,000units2,700units Direct labor-hours per unit4.50hours1.80hour Direct materials cost per unit$24.00$26.60 Direct labor cost per unit$34.00$11.60 Solution Calculation of Activity rate : Total Cost Total Activity Activity rate A B A/B Machine setups $ 22,230
- 390 $ 57.00 Purchase orders $ 162,250 2750 $ 59.00 General factory $ 171,360 8160 $ 21.00 Calculation of Overhead Costs For Product C: Activity Activity rate Overhead Cost A B A*B Machine setups 180 $ 57.00 $ 10,260.00 Purchase orders 1250 $ 59.00 $ 73,750.00 General factory 5000 $ 21.00 $ 105,000.00 Total Overhead $ 189,010.00 For Product D: Activity Activity rate Overhead Cost
- A B A*B Machine setups 210 $ 57.00 $ 11,970.00 Purchase orders 1500 $ 59.00 $ 88,500.00 General factory 3160 $ 21.00 $ 66,360.00 Total Overhead $ 166,830.00 Calculation of unit product cost : Product A Product B Direct materials cost per unit $ 24.00 $ 26.60 Direct labor cost per unit $ 34.00 $ 11.60 Overhead Cost per unit $ 94.51 $ 61.79 (189010/2000) (166830/2700) $ 152.51 $ 99.99 Calculation of Activity rate : Total Cost Total Activity
- Activity rate A B A/B Machine setups $ 22,230 390 $ 57.00 Purchase orders $ 162,250 2750 $ 59.00 General factory $ 171,360 8160 $ 21.00 Calculation of Overhead Costs For Product C: Activity Activity rate Overhead Cost A B A*B Machine setups 180 $ 57.00 $ 10,260.00 Purchase orders 1250 $ 59.00 $ 73,750.00 General factory 5000 $ 21.00 $ 105,000.00
- Total Overhead $ 189,010.00 For Product D: Activity Activity rate Overhead Cost A B A*B Machine setups 210 $ 57.00 $ 11,970.00 Purchase orders 1500 $ 59.00 $ 88,500.00 General factory 3160 $ 21.00 $ 66,360.00 Total Overhead $ 166,830.00 Calculation of unit product cost : Product A Product B Direct materials cost per unit $ 24.00 $ 26.60 Direct labor cost per unit $ 34.00 $ 11.60 Overhead Cost per unit $ 94.51 $ 61.79 (189010/2000)
- (166830/2700) $ 152.51 $ 99.99