Problem 6-61 (Static) Product Costing (LO 6-2) Redfern Audio produces audio equipment including headphones. At the Campus Facility, it produces two wireless models, Standard and Enhanced, which differ both in the materials and components used and in the labor skill required. Data for the Campus Plant for the third quarter follow. Units produced Machine-hours Direct labor-hours Direct materials costs Direct labor costs Manufacturing overhead Total costs Standard Product costs per unit 24,000 14,400 18,000 Standard $ 480,000 288,000 Enhanced 8,000 9,600 18,000 $ 720,000 612,000 Total Required: a. Compute the individual product costs per unit assuming that Redfern Audio uses the number of units to allocate overhead to the products. b. Compute the individual product costs per unit assuming that Redfern Audio uses direct labor hours to allocate overhead to the products. c. Compute the individual product costs per unit assuming that Redfern Audio uses machine hours to allocate overhead to the products. Enhanced 32,000 24,000 36,000 Required A Required B Required C Compute the individual product costs per unit assuming that Redfern Audio uses the number of units the products. Note: Round your final answers to 2 decimal places. $ 1,200,000 900,000 864,000 $ 2,964,000
Problem 6-61 (Static) Product Costing (LO 6-2) Redfern Audio produces audio equipment including headphones. At the Campus Facility, it produces two wireless models, Standard and Enhanced, which differ both in the materials and components used and in the labor skill required. Data for the Campus Plant for the third quarter follow. Units produced Machine-hours Direct labor-hours Direct materials costs Direct labor costs Manufacturing overhead Total costs Standard Product costs per unit 24,000 14,400 18,000 Standard $ 480,000 288,000 Enhanced 8,000 9,600 18,000 $ 720,000 612,000 Total Required: a. Compute the individual product costs per unit assuming that Redfern Audio uses the number of units to allocate overhead to the products. b. Compute the individual product costs per unit assuming that Redfern Audio uses direct labor hours to allocate overhead to the products. c. Compute the individual product costs per unit assuming that Redfern Audio uses machine hours to allocate overhead to the products. Enhanced 32,000 24,000 36,000 Required A Required B Required C Compute the individual product costs per unit assuming that Redfern Audio uses the number of units the products. Note: Round your final answers to 2 decimal places. $ 1,200,000 900,000 864,000 $ 2,964,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:Problem 6-61 (Static) Product Costing (LO 6-2)
Redfern Audio produces audio equipment including headphones. At the Campus Facility, it
produces two wireless models, Standard and Enhanced, which differ both in the materials and
components used and in the labor skill required. Data for the Campus Plant for the third quarter
follow.
Units produced
Machine-hours
Direct labor-hours
Direct materials costs
Direct labor costs
Manufacturing overhead
Total costs
Standard
Product costs per unit
24,000
14,400
18,000
$ 480,000
288,000
Standard
Enhanced
8,000
9,600
18,000
$ 720,000
612,000
Total
Required:
a. Compute the individual product costs per unit assuming that Redfern Audio uses the number of
units to allocate overhead to the products.
b. Compute the individual product costs per unit assuming that Redfern Audio uses direct labor
hours to allocate overhead to the products.
c. Compute the individual product costs per unit assuming that Redfern Audio uses machine hours
to allocate overhead to the products.
Enhanced
32,000
24,000
36,000
Required A Required B Required C
Compute the individual product costs per unit assuming that Redfern Audio uses the number of units
the products.
Note: Round your final answers to 2 decimal places.
$ 1,200,000
900,000
864,000
$ 2,964,000
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