Sonoma Manufacturing has five activity cost pools and two products (a T-Vacuum and a D-Vacuum) Information related to the activity is presented below: Activity Cost Pool Ordering and Receiving Machine Setup Machining Assembly Inspection Cost Driver Cost Orders Setups Machine hours Parts Inspections Selling price Direct material per unit Direct labor per unit I- Vacuum Estimated Overhead $ 150,000 $40 $6 $10 277,000 1,000,000 1,500,000 350,000 Cost Drivers by Product D-Vacuum D- Vacuum $45 $8 $10 T-Vacuum Sonoma Produce 200,000 units of T-Vacuum and 500,000 units of D-Vacuum. The following additional information related to each product: 700 600 200,000 1,500,000 650 500 400 150,000 750,000 550 Required: 1. Calculate the overhead rate by using Activity Base Costing (ABC method) 2. Using the ABC rate, calculate the total cost per each unit for each product (Round your ansv to the nearest cent)
Sonoma Manufacturing has five activity cost pools and two products (a T-Vacuum and a D-Vacuum) Information related to the activity is presented below: Activity Cost Pool Ordering and Receiving Machine Setup Machining Assembly Inspection Cost Driver Cost Orders Setups Machine hours Parts Inspections Selling price Direct material per unit Direct labor per unit I- Vacuum Estimated Overhead $ 150,000 $40 $6 $10 277,000 1,000,000 1,500,000 350,000 Cost Drivers by Product D-Vacuum D- Vacuum $45 $8 $10 T-Vacuum Sonoma Produce 200,000 units of T-Vacuum and 500,000 units of D-Vacuum. The following additional information related to each product: 700 600 200,000 1,500,000 650 500 400 150,000 750,000 550 Required: 1. Calculate the overhead rate by using Activity Base Costing (ABC method) 2. Using the ABC rate, calculate the total cost per each unit for each product (Round your ansv to the 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 5CE: Roberts Company produces two weed eaters: basic and advanced. The company has four activities:...
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