Réquired:1. Using ABC, compute the overhead cost per unit for each product line.2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $240 for Model 145and $121 for Model 212.3. If the market price for Model 145 is $683.03 and the market price for Model 212 is $387.22, determine the profit or loss per unit foreach model.Complete this question by entering your answers in the tabs below.Required 1Required 2Required 3Using ABC, compute the overhead cost per unit for each product line. (Round your final answers to 2 decimal places.)Model 145Activity drincurreOverheadActivityExpected CostsExpected ActivityActivity RateActivity driverincurredassignedComponentsChangeover$493.850830 Number of batchesMachining365,4547,710 Machine hoursSetups263,200140 SetupsFinishingWelding$248,1104,300 Welding hoursInspecting315,000840 InspectionsRework38,250170 Rework ordersSupportPurchasing$205,500548 Purchase ordersProviding space and utilities116,5506,300 UnitsTotal overhead costTotal units produced Way Cool produces two different models of air conditioners. The company produces the mechanical systems in its componentsdepartment. The mechanical systems are combined with the housing assembly in its finishing department. The activities, costs, anddrivers associated with these two manufacturing processes and the production support process follow.ActivityComponents ChangeoverMachiningProcessOverhead CostDriverQuantity$ 493,850365,454263,200Number of batches830Machine hours7,710SetupsNumber of setups140$1,122,504$ 248,110Finishing WeldingInspectingReworkWelding hoursNumber of inspectionsRework orders4,300315,00084038,250170$ 601,360PurchasingProviding spaceSupport205,500Purchase orders54831,70084,850Number of units6,3006,300Providing utilitiesNumber of units$ 322,050Additional production information concerning its two product lines follows.Model 145Model 212Units producedWelding hoursBatches2,1004,2003,500800415415Number of inspectionsMachine hours5203202,3505,360SetupsRework orders707010070Purchase orders365183Required:1. Using ABC, compute the overhead cost per unit for each product line.2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $240 for Model 145and $121 for Model 212.3. If the market price for Model 145 is $683.03 and the market price for Model 212 is $387.22, determine the profit or loss per unit foreach model.

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Description: Réquired:1. Using ABC, compute the overhead cost per unit for each product line.2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $240 for Model 145and $121 for Model 212.3. If the

Activity Rate : Expected costs/ Expected Activity Overhead Assigned : Activity Rate x Activity Rate…

Business

Accounting

1. Using ABC, compute the overhead cost per unit for each product line. 2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $240 for Model 145 and $121 for Model 212. 3. If the market price for Model 145 is $683.03 and the market price for Model 212 is $387.22, determine the profit or loss per unit for each model.

1. Using ABC, compute the overhead cost per unit for each product line. 2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $240 for Model 145 and $121 for Model 212. 3. If the market price for Model 145 is $683.03 and the market price for Model 212 is $387.22, determine the profit or loss per unit for each model.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 1PA: The following product Costs are available for Haworth Company on the production of chairs: direct...

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The following product Costs are available for Haworth Company on the production of chairs: direct materials, $15,500; direct labor, $22.000; manufacturing overhead, $16.500; selling expenses, $6,900; and administrative expenses, $15,200. What are the prime costs? What are the conversion costs? What is the total product cost? What is the total period cost? If 7,750 equivalent units are produced, what is the equivalent material cost per unit? If 22,000 equivalent units are produced, what is the equivalent conversion cost per unit?
The following product costs are available for Stellis Company on the production of erasers: direct materials, $22,000; direct labor, $35,000; manufacturing overhead, $17,500; selling expenses, $17,600; and administrative expenses; $13,400. What are the prime costs? What are the conversion costs? What is the total product cost? What is the total period cost? If 13,750 equivalent units are produced, what is the equivalent material cost per unit? If 17,500 equivalent units are produced, what is the equivalent conversion cost per unit?
Wrappers Tape makes two products: Simple and Removable. It estimates it will produce 369,991 units of Simple and 146,100 of Removable, and the overhead for each of its cost pools is as follows: It has also estimated the activities for each cost driver as follows: Â How much is the overhead allocated to each unit of Simple and Removable?
Grand Canyon Manufacturing Inc. produces and sells a product with a price of 100 per unit. The following cost data have been prepared for its estimated upper and lower limits of activity: Overhead: Selling and administrative expenses: Required: 1. Classify each cost element as either variable, fixed, or semi-variable. (Hint: Recall that variable expenses must go up in direct proportion to changes in the volume of activity.) 2. Calculate the break-even point in units and dollars. (Hint: First use the high-low method illustrated in Chapter 4 to separate costs into their fixed and variable components.) 3. Prepare a break-even chart. 4. Prepare a contribution income statement, similar in format to the statement appearing on page 540, assuming sales of 5,000 units. 5. Recompute the break-even point in units, assuming that variable costs increase by 20% and fixed costs are reduced by 50,000.
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Rose Company has a relevant range of production between 10,000 and 25.000 units. The following cost data represents average cost per unit for 15,000 units of production. Using the cost data from Rose Company, answer the following questions: If 10,000 units are produced, what is the variable cost per unit? If 18,000 units are produced, what is the variable cost per unit? If 21,000 units are produced, what are the total variable costs? If 11,000 units are produced, what are the total variable costs? If 19,000 units are produced, what are the total manufacturing overhead costs incurred? If 23,000 units are produced, what are the total manufacturing overhead costs incurred? If 19,000 units are produced, what are the per unit manufacturing overhead costs incurred? If 25,000 units are produced, what are the per unit manufacturing overhead costs incurred?
Refer to the data given in Problem 4.36 and suppose that the expected activity costs are reported as follows (all other data remain the same): The per unit overhead cost using the 14 activity-based drivers is 1,108 and 779 for Cylinder A and Cylinder B, respectively. Required: 1. Determine the percentage of total costs represented by the three most expensive activities. 2. Allocate the costs of all other activities to the three activities identified in Requirement 1. Allocate the other activity costs to the three activities in proportion to their individual activity costs. Now assign these total costs to the products using the drivers of the three chosen activities. 3. Using the costs assigned in Requirement 2, calculate the percentage error using the ABC costs as a benchmark. Comment on the value and advantages of this ABC simplification.