Siegel Corporation produces a product that is available in both a Deluxe and a Regular model. It is estimated that $2,410,000 in manufacturing overhead costs will be incurred and that the company will produce 9,500 units of the Deluxe model and 20,000 units of the Regular model. The Direct Materials and Direct Labor costs per unit are as follows: Deluxe Regular $155 $20 Direct Materials cost per unit. Direct Labor cost per unit... $124 $11 The company uses Activity-Based Costing to allocate manufacturing overhead costs to its products. Four activity cost pools and their associated activities are as follows: Estimated Activity Deluxe Estimated Regular Overhead Activity Cost Pool and Activity Measure Purchase orders (number of orders) Rework requests (number of requests) Product testing (number of tests) Machine-related (machine hours) Cost $ 100,000 220,000 480,000 1,610,000 $2,410,000 300 orders 700 orders 600 requests 10,000 tests 24,250 hours 500 requests 6,000 tests 16,000 hours Total Estimated Overhead Compute the following The activity rate for each Activity Cost Pool; The unit Manufacturing Overhead cost for each model; The unit product cost for each model
Siegel Corporation produces a product that is available in both a Deluxe and a Regular model. It is estimated that $2,410,000 in manufacturing overhead costs will be incurred and that the company will produce 9,500 units of the Deluxe model and 20,000 units of the Regular model. The Direct Materials and Direct Labor costs per unit are as follows: Deluxe Regular $155 $20 Direct Materials cost per unit. Direct Labor cost per unit... $124 $11 The company uses Activity-Based Costing to allocate manufacturing overhead costs to its products. Four activity cost pools and their associated activities are as follows: Estimated Activity Deluxe Estimated Regular Overhead Activity Cost Pool and Activity Measure Purchase orders (number of orders) Rework requests (number of requests) Product testing (number of tests) Machine-related (machine hours) Cost $ 100,000 220,000 480,000 1,610,000 $2,410,000 300 orders 700 orders 600 requests 10,000 tests 24,250 hours 500 requests 6,000 tests 16,000 hours Total Estimated Overhead Compute the following The activity rate for each Activity Cost Pool; The unit Manufacturing Overhead cost for each model; The unit product cost for each model
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Siegel Corporation produces a product that is available in both a Deluxe and a Regular
model. It is estimated that $2,410,000 in manufacturing overhead costs will be incurred
and that the company will produce 9,500 units of the Deluxe model and 20,000 units of
the Regular model.
The Direct Materials and Direct Labor costs per unit are as follows:
Deluxe Regular
$155
$20
Direct Materials cost per unit.
Direct Labor cost per unit...
$124
$11
The company uses Activity-Based Costing to allocate manufacturing overhead costs to
its products. Four activity cost pools and their associated activities are as follows:
Estimated Activity
Deluxe
Estimated
Regular
Overhead
Activity Cost Pool and Activity Measure
Purchase orders (number of orders)
Rework requests (number of requests)
Product testing (number of tests)
Machine-related (machine hours)
Cost
$ 100,000
220,000
480,000
1,610,000
$2,410,000
300 orders
700 orders
600 requests
10,000 tests
24,250 hours
500 requests
6,000 tests
16,000 hours
Total Estimated Overhead
Compute the following
The activity rate for each Activity Cost Pool;
The unit Manufacturing Overhead cost for each model;
The unit product cost for each model
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