Multiple Versus Single Overhead Rates, Activity Drivers Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $465,740 Number of setups 580 Ordering costs 311,100 Number of orders 18,300 Machine costs 975,200 Machine hours 42,400 Receiving 377,200 Receiving hours 9,200 Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B Direct materials $618,000 $790,000 Direct labor 467,000 480,000 Units completed 16,100 7,600 Direct labor hours 5,600 1,900 Number of setups 380 200 Number of orders 6,200 12,100 Machine hours 24,200 18,200 Receiving hours 2,300 6,900 The company's normal activity is 7,500 direct labor hours. 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.
Multiple Versus Single Overhead Rates, Activity Drivers Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment $465,740 Number of setups 580 Ordering costs 311,100 Number of orders 18,300 Machine costs 975,200 Machine hours 42,400 Receiving 377,200 Receiving hours 9,200 Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B Direct materials $618,000 $790,000 Direct labor 467,000 480,000 Units completed 16,100 7,600 Direct labor hours 5,600 1,900 Number of setups 380 200 Number of orders 6,200 12,100 Machine hours 24,200 18,200 Receiving hours 2,300 6,900 The company's normal activity is 7,500 direct labor hours. 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.
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 27E: Plata Company has identified the following overhead activities, costs, and activity drivers for the...
Related questions
Question
Multiple Versus Single Overhead Rates, Activity Drivers
Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year:
| Activity | Expected Cost | Activity Driver | Activity Capacity |
| Setting up equipment | $465,740 | Number of setups | 580 |
| Ordering costs | 311,100 | Number of orders | 18,300 |
| Machine costs | 975,200 | Machine hours | 42,400 |
| Receiving | 377,200 | Receiving hours | 9,200 |
Deoro produces two models of dishwashers with the following expected prime costs and activity demands:
| Model A | Model B | |
| Direct materials | $618,000 | $790,000 |
| Direct labor | 467,000 | 480,000 |
| Units completed | 16,100 | 7,600 |
| Direct labor hours | 5,600 | 1,900 |
| Number of setups | 380 | 200 |
| Number of orders | 6,200 | 12,100 |
| Machine hours | 24,200 | 18,200 |
| Receiving hours | 2,300 | 6,900 |
The company's normal activity is 7,500 direct labor hours.
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.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,