Cabat Company manufactures two products, Product C and Product D. The company estimated it would incur $189,910 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 periodâs operations appear below:
Product C
Product D
Estimated volume
4,400
units
3,600
units
Direct labor-hours per unit
2.40
hours
2.00
hour
Direct materials cost per unit
$
17.60
$
30.90
Direct labor cost per unit
$
15.60
$
12.00
Requried:
a-1.
Compute the predetermined overhead rate under the current method. (Round your answer to 2 decimal places.)
Predertemined overhead rate
____ per DLH
a-2.
Determine the unit product cost of each product for the current year. (Do not round your intermediate calculations. Round your final answer to 2 decimal places.)
Product C
Prodcut D
Unit Product Cost
b.
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:
Activity Cost Pools
Estimated
Overhead
Costs
Expected Activity
Product C
Product D
Total
Machine setups
$
13,390
230
240
470
Purchase orders
78,840
1,060
1,400
2,460
General factory
97,680
10,560
7,200
17,760
Total
$
189,910
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
Prodcut D
Unit Product Cost
Cabat Company manufactures two products, Product C and Product D. The company estimated it would incur $189,910 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 periodâs operations appear below:
| Product C | Product D | |||||||
| Estimated volume | 4,400 | units | 3,600 | units | ||||
| Direct labor-hours per unit | 2.40 | hours | 2.00 | hour | ||||
| Direct materials cost per unit | $ | 17.60 | $ | 30.90 | ||||
| Direct labor cost per unit | $ | 15.60 | $ | 12.00 | ||||
| Requried: | |
| a-1. | Compute the predetermined overhead rate under the current method. (Round your answer to 2 decimal places.) |
| Predertemined overhead rate | ____ per DLH |
| a-2. | Determine the unit product cost of each product for the current year. (Do not round your intermediate calculations. Round your final answer to 2 decimal places.) |
| Product C | Prodcut D | |
| Unit Product Cost |
| b. | 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: |
| Activity Cost Pools | Estimated | Expected Activity | |||
| Product C | Product D | Total | |||
| Machine setups | $ | 13,390 | 230 | 240 | 470 |
| Purchase orders | 78,840 | 1,060 | 1,400 | 2,460 | |
| General factory | 97,680 | 10,560 | 7,200 | 17,760 | |
| Total | $ | 189,910 | |||
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 | Prodcut D | |
| Unit Product Cost |
Related questions
Crazier, Inc., manufactures and sells two products: Product U8 and product W2. Data concerning the expected production of each product and expected total direct labor-hours (DLHs) required to produce that output appear below:
| Expeced Production | Direct Labor-Hours Per Unit | Total Direct Labor-Hours | |
| Product U8 | 500 | 6.0 | 3,000 |
| Product W2 | 400 | 5.0 | 2,000 |
| Total direct labor-hours | 5,000 |
The direct labor rate is $22.10 per DLH. The direct materials cost per unit for each product is given below:
| Direct Materials Cost Per Unit | |
| Product U8 | $160.80 |
| Product W2 | $185.40 |
The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
[ Estimated ] [ Estimated Activity ]
| Activity Cost Pools | Activity Measures | Overhead Cost | Product U8 | Product W2 | Total |
| Labor-related | DLHs | $237,900 | 3,000 | 2,000 | 5,000 |
| Production orders | orders | 29,232 | 600 | 800 | 1,400 |
| General factory | MHs | 364,364 | 4,700 | 4,400 | 9,100 |
| $631,496 |
The unit product cost of Product U8 is closest to:
a) $995.06 per unit
b) $1,051.20 per unit
c) $ 980.31 per unit
d) $669.78 per unit
Machuga, Inc., manufactures and sells two products: Product C1and Product M2. Data concerning the expected production of eachproduct and the expected total direct labor-hours (DLHs) requiredto produce that output appear below:
Expected Production | Direct Labor-Hours Per Unit | Total Direct Labor-Hours | |
Product C1 | 800 | 9.0 | 7,200 |
Product M2 | 700 | 11.0 | 7,700 |
Total direct labor-hours | 14,900 |
The direct labor rate is $18.70 per DLH. The direct materials costper unit is $297.00 for Product C1 and $246.20 for ProductM2.
The company is considering adopting an activity-based costingsystem with the following activity cost pools, activity measures,and expected activity:
| Estimated | Expected Activity | ||||
| Activity Cost Pools | Activity Measures | Overhead Cost | Product C1 | Product M2 | Total |
| Labor-related | DLHs | $558,452 | 7,200 | 7,700 | 14,900 |
| Production orders | orders | 75,240 | 500 | 600 | 1,100 |
| General factory | MHs | 886,410 | 4,400 | 4,600 | 9,000 |
| $1,520,102 | |||||
The overhead applied to each unit of Product M2 underactivity-based costing is closest to:
$1,118.13 per unit
$1,122.22 per unit
$647.22 per unit
$1,013.40 per unit
