Required:a. Compute the estimated per unit product costs for the next fiscal year, based on the current cost accounting system.b. An analyst on the planning process team suggests that a two-stage system would improve the estimated product costs. The analystsuggests that overhead be first assigned to on one of two cost pools: Machine related and labor related. Machine-related overheadconsists of the accounts "Engineering" and "Machine operation and maintenance." Labor-related overhead consists of theremaining manufacturing overhead. Machine-related costs would be allocated based on machine-hours. Labor-related overheadwould be allocated based on direct labor cost. Compute the estimated per unit product costs for the next fiscal year, based on thesystem proposed by the analyst.Complete this question by entering your answers in the tabs below.Required A Required BCompute the estimated per unit product costs for the next fiscal year, based on the current cost accounting system.Product cost per unitStandardUltra< Required ARequired B > Hall, Incorporated manufactures two components, Standard and Ultra, that are designed for the same function, but are made ofdifferent metals for operational performance reasons. The metal used in Standard is easy to work with and there are few quality issuesor reworking required on the machines. The metal used in Ultra is more difficult to work with and often needs additional machine timeand rework.Data on expected operations and direct costs for the next fiscal year follow:Units producedDirect labor-hours usedMachine-hours usedDirect materials costsDirect labor costsAccountAdministrationEngineeringMachine operation and maintenanceMiscellaneousSupervisionTotalStandard41,000123,00020,500Required:Ultra13,00022,50022,500$ 3,097,0002,520,000$ 3,700,000855,000The planning process team at Hall, Incorporated has estimated the following manufacturing overhead costs for the next fiscal year:TotalAmount$ 825,4003,603,000840,000540, 100884,500$ 6,693,00054,000145,50043,000$ 6,797,0003,375,000The cost accounting system at Hall, Incorporated calculates product costs by adding allocated overhead to the direct costs of theproduct. Overhead costs are allocated based on direct labor-hours.a. Compute the estimated per unit product costs for the next fiscal year, based on the current cost accounting system.b. An analyst on the planning process team suggests that a two-stage system would improve the estimated product costs. The analystsuggests that overhead be first assigned to on one of two cost pools Machine related and labor related Machine-related overhead

To calculate the estimated per-unit product costs, we need to allocate the total manufacturing…

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a. Compute the estimated per unit product costs for the next fiscal year, based on the current cost accounting system.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 4CE: Larsen, Inc., produces two types of electronic parts and has provided the following data: There are...

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Hall, Incorporated manufactures two components, Standard and Ultra, that are designed for the same function, but are made of different metals for operational performance reasons. The metal used in Standard is easy to work with and there are few quality issues or reworking required on the machines. The metal used in Ultra is more difficult to work with and often needs additional machine time and rework. Data on expected operations and direct costs for the next fiscal year follow: Account Administration Engineering Machine operation and maintenance Standard Miscellaneous Supervision Total 48,000 144,000 24,000 Ultral $ 3,384,000 2,520,000 Units produced Direct labor-hours used Machine-hours used Direct materials costs $5,163,000 Direct labor costs 855,000 The planning process team at Hall, Incorporated has estimated the following manufacturing overhead costs for the next fiscal year: 16,500 22,500 22,500 Total Amount $ 825,400 5,699,500 875,000 540,100 884,500 $8,824,500. 64,500 166,500…
Hall, Incorporated manufactures two components, Standard and Ultra, that are designed for the same function, but are made of different metals for operational performance reasons. The metal used in Standard is easy to work with and there are few quality issues or reworking required on the machines. The metal used in Ultra is more difficult to work with and often needs additional machine time and rework. Data on expected operations and direct costs for the next fiscal year follow: Standard Ultra Total Units produced 37,000 11,000 48,000 Direct labor-hours used 111,000 22,500 133,500 Machine-hours used 18,500 22,500 41,000 Direct materials costs $ 2,845,000 $ 2,886,000 $ 5,731,000 Direct labor costs 2,520,000 855,000 3,375,000 The planning process team at Hall, Incorporated has estimated the following manufacturing overhead costs for the next fiscal year: Account Amount Administration $ 825,400 Engineering 2,537,000 Machine operation and maintenance 820,000…
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