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Multiple Versus Single Overhead Rates, Activity Drivers Deore Company has identified the following overhead activities, costs, and activity drivers for the coming year Expected Cost Activity Driver Activity Capacity Number of setups Number of orders Machine hours Activity Setting up equipment Ordering costs Machine costs Receiving $537,200 304,300 910,800 451,500 Receiving hours Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B Model A Direct materials Direct labor Units completed Direct labor hours Number of setups Number of orders 12,300 Machine hours 17,500 Receiving hours 3,200 7,300 The company's normal activity is 8,300 direct labor hours. $629,000 484,000 16,500 6,600 430 Model B 5,600 23,900 $775,000 491,000 7,700 1,700 250 680 17,900 41,400 10,500 Required: 1. Determine the unit cost for each model using direct labor hours to apply overhead. Round intermediate calculations and final answers to nearest cent. Unit Cost your answers to nearest cent.

Multiple Versus Single Overhead Rates, Activity Drivers Deore Company has identified the following overhead activities, costs, and activity drivers for the coming year Expected Cost Activity Driver Activity Capacity Number of setups Number of orders Machine hours Activity Setting up equipment Ordering costs Machine costs Receiving $537,200 304,300 910,800 451,500 Receiving hours Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B Model A Direct materials Direct labor Units completed Direct labor hours Number of setups Number of orders 12,300 Machine hours 17,500 Receiving hours 3,200 7,300 The company's normal activity is 8,300 direct labor hours. $629,000 484,000 16,500 6,600 430 Model B 5,600 23,900 $775,000 491,000 7,700 1,700 250 680 17,900 41,400 10,500 Required: 1. Determine the unit cost for each model using direct labor hours to apply overhead. Round intermediate calculations and final answers to nearest cent. Unit Cost your answers to nearest cent.

Cornerstones of Cost Management (Cornerstones Series)
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 22E: Silven Company has identified the following overhead activities, costs, and activity drivers for the...
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Multiple Versus Single Overhead Rates, Activity Drivers Deore Company has identified the following overhead activities, costs, and activity drivers for the coming year Expected Cost Activity Driver Activity Capacity Number of setups Number of orders Machine hours Receiving hours Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Activity Setting up equipment Ordering costs Machine costs Receiving Direct materials Direct labor Units completed Direct labor hours Number of setups Number of orders Machine hours Receiving hours $537,200 304,300 910,800 451,500 Model A Model B Model A $629,000 484,000 16,500 6,600 430 Model B $775,000 491,000 7,700 1,700 250 5,600 23,900 3,200 The company's normal activity is 8,300 direct labor hours. 12,300 17,500 7,300 680 17,900 41,400 10,500 Required: 1. Determine the unit cost for each model using direct labor hours to apply overhead. Round intermediate calculations and final answers to nearest cent. Unit Cost your answers to nearest cent.
Transcribed Image Text:Multiple Versus Single Overhead Rates, Activity Drivers Deore Company has identified the following overhead activities, costs, and activity drivers for the coming year Expected Cost Activity Driver Activity Capacity Number of setups Number of orders Machine hours Receiving hours Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Activity Setting up equipment Ordering costs Machine costs Receiving Direct materials Direct labor Units completed Direct labor hours Number of setups Number of orders Machine hours Receiving hours $537,200 304,300 910,800 451,500 Model A Model B Model A $629,000 484,000 16,500 6,600 430 Model B $775,000 491,000 7,700 1,700 250 5,600 23,900 3,200 The company's normal activity is 8,300 direct labor hours. 12,300 17,500 7,300 680 17,900 41,400 10,500 Required: 1. Determine the unit cost for each model using direct labor hours to apply overhead. Round intermediate calculations and final answers to nearest cent. Unit Cost your answers to nearest cent.
2. Determine the unit cost for each model using the four activity drivers. Round your answers to nearest cent. Unit Cost Model A Model B 3. Which method produces the more accurate cost assignment?
Transcribed Image Text:2. Determine the unit cost for each model using the four activity drivers. Round your answers to nearest cent. Unit Cost Model A Model B 3. Which method produces the more accurate cost assignment?
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