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Required information Bunker makes two types of briefcases, fabric and leather. The company is currently using a traditional costing system with labor hours as the cost driver but is considering switching to an activity-based costing system. In preparation for the possible switch, Bunker has identified two activity pools: materials handling and setup. Pertinent data follow: Number of labor hours Number of material moves Number of setups Fabric Case Leather Case 12,000 8,000 483 667 28 52 Total estimated overhead costs are $135,000, of which $115,000 is assigned to the materials handling pool and $20,000 is assigned to the setup pool. equired: Calculate the overhead assigned to the fabric case using the traditional costing system based on labor hours. Calculate the overhead assigned to the fabric case using ABC. Was the fabric case over- or undercosted by the traditional cost system compared to ABC? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calculate the overhead assigned to the fabric case using the traditional costing system based on labor hours. Note: Do not round intermediate calculations and round your final answer to the nearest whole dollar amount. verhead Assigned < Required 1 Required 2 >

Required information Bunker makes two types of briefcases, fabric and leather. The company is currently using a traditional costing system with labor hours as the cost driver but is considering switching to an activity-based costing system. In preparation for the possible switch, Bunker has identified two activity pools: materials handling and setup. Pertinent data follow: Number of labor hours Number of material moves Number of setups Fabric Case Leather Case 12,000 8,000 483 667 28 52 Total estimated overhead costs are $135,000, of which $115,000 is assigned to the materials handling pool and $20,000 is assigned to the setup pool. equired: Calculate the overhead assigned to the fabric case using the traditional costing system based on labor hours. Calculate the overhead assigned to the fabric case using ABC. Was the fabric case over- or undercosted by the traditional cost system compared to ABC? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calculate the overhead assigned to the fabric case using the traditional costing system based on labor hours. Note: Do not round intermediate calculations and round your final answer to the nearest whole dollar amount. verhead Assigned < Required 1 Required 2 >

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 5CE: Roberts Company produces two weed eaters: basic and advanced. The company has four activities:...
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Required information Bunker makes two types of briefcases, fabric and leather. The company is currently using a traditional costing system with labor hours as the cost driver but is considering switching to an activity-based costing system. In preparation for the possible switch, Bunker has identified two activity pools: materials handling and setup. Pertinent data follow: Number of labor hours Number of material moves Number of setups. Fabric Case Leather Case 8,000 667 52 12,000 483 28 Total estimated overhead costs are $135,000, of which $115,000 is assigned to the materials handling pool and $20,000 is assigned to the setup pool. Required: 1. Calculate the overhead assigned to the fabric case using the traditional costing system based on labor hours. 2. Calculate the overhead assigned to the fabric case using ABC. 3. Was the fabric case over- or undercosted by the traditional cost system compared to ABC? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calculate the overhead assigned to the fabric case using the traditional costing system based on labor hours. Note: Do not round intermediate calculations and round your final answer to the nearest whole dollar amount. Overhead Assigned < Required 1 Required 2 >
Transcribed Image Text:Required information Bunker makes two types of briefcases, fabric and leather. The company is currently using a traditional costing system with labor hours as the cost driver but is considering switching to an activity-based costing system. In preparation for the possible switch, Bunker has identified two activity pools: materials handling and setup. Pertinent data follow: Number of labor hours Number of material moves Number of setups. Fabric Case Leather Case 8,000 667 52 12,000 483 28 Total estimated overhead costs are $135,000, of which $115,000 is assigned to the materials handling pool and $20,000 is assigned to the setup pool. Required: 1. Calculate the overhead assigned to the fabric case using the traditional costing system based on labor hours. 2. Calculate the overhead assigned to the fabric case using ABC. 3. Was the fabric case over- or undercosted by the traditional cost system compared to ABC? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calculate the overhead assigned to the fabric case using the traditional costing system based on labor hours. Note: Do not round intermediate calculations and round your final answer to the nearest whole dollar amount. Overhead Assigned < Required 1 Required 2 >
15 1. Calculate the overhead assigned to the fabric case using the traditional costing system based on labor hours. 2. Calculate the overhead assigned to the fabric case using ABC. 3. Was the fabric case over- or undercosted by the traditional cost system compared to ABC? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calculate the overhead assigned to the fabric case using ABC. Note: Round activity rates or activity proportions and intermediate calculations to four decimal places. Round your final answer to the nearest whole dollar. Overhead Assigned Show Transcribed Text < Required 1 Number of labor hours Number of material moves Number of setups. Required 3 > Required information Bunker makes two types of briefcases, fabric and leather. The company is currently using a traditional costing system with labor hours as the cost driver but is considering switching to an activity-based costing system. In preparation for the possible switch, Bunker has identified two activity pools: materials handling and setup. Pertinent data follow: Fabric Case Leather Case 12,000 483 28 8,000 667 52 Required 1 Required 2 Required 3 3 Total estimated overhead costs are $135,000, of which $115,000 is assigned to the materials handling pool and $20,000 is assigned to the setup pool. Complete this question by entering your answers in the tabs below. Required: 1. Calculate the overhead assigned to the fabric case using the traditional costing system based on labor hours. 2. Calculate the overhead assigned to the fabric case using ABC. 3. Was the fabric case over- or undercosted by the traditional cost system compared to ABC? c < Required 2 Was the fabric case over- or undercosted by the traditional cost system compared to ABC? Fabric Case Required 3 >
Transcribed Image Text:15 1. Calculate the overhead assigned to the fabric case using the traditional costing system based on labor hours. 2. Calculate the overhead assigned to the fabric case using ABC. 3. Was the fabric case over- or undercosted by the traditional cost system compared to ABC? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calculate the overhead assigned to the fabric case using ABC. Note: Round activity rates or activity proportions and intermediate calculations to four decimal places. Round your final answer to the nearest whole dollar. Overhead Assigned Show Transcribed Text < Required 1 Number of labor hours Number of material moves Number of setups. Required 3 > Required information Bunker makes two types of briefcases, fabric and leather. The company is currently using a traditional costing system with labor hours as the cost driver but is considering switching to an activity-based costing system. In preparation for the possible switch, Bunker has identified two activity pools: materials handling and setup. Pertinent data follow: Fabric Case Leather Case 12,000 483 28 8,000 667 52 Required 1 Required 2 Required 3 3 Total estimated overhead costs are $135,000, of which $115,000 is assigned to the materials handling pool and $20,000 is assigned to the setup pool. Complete this question by entering your answers in the tabs below. Required: 1. Calculate the overhead assigned to the fabric case using the traditional costing system based on labor hours. 2. Calculate the overhead assigned to the fabric case using ABC. 3. Was the fabric case over- or undercosted by the traditional cost system compared to ABC? c < Required 2 Was the fabric case over- or undercosted by the traditional cost system compared to ABC? Fabric Case Required 3 >
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