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TASK A. Problem Solving. Analyze the given proBIBs anu usU DIe for your answers. D Amore Companyproducestwoproductsinasinglefactory.Thefollowingproductionandcostinformationhasbe endetermined: Model 1 1,000 100 Model2 200 Unitsproduced Materialmoves(total) Testingtime(total) Directiaborhoursperunit 40 250 125 totaloverhead to Thecontrollerhasdetermined beP480,000.P140,000relatestomateriaimoves, P150,000relatestotesting; theremainderisr elatedtolabortime. a) If Amore uses direct labor hours to allocate overhead to ach model, what would overhead per unit be for Modei 2? b) If Amore uses activity-based costing to allocate overhoad to each model, what would overhead per unit be for Model 2? GLPower Company manufactures a line of high-end laundry equipment. The accountant has proposed changing from a traditional costing system to an activity-based costing system. The president is not convinced of making the changes, so he requests that the next large order for equipment be costed under both systems for purposes of comparison and analysis. An order from LaundryShop, Inc. for 150 washing machine is received. The following cost data LaundryShop order. elate to the Data relevant to both costing systems: Direct material Direct labor hours P55,500 820 P20.00 Direct labor rate per hour Date relevant to the treditional costing sysiem: Predetermined overhead rate is 300% of direct labor cost. Data relevant to the activity-based costing system. Activity-Based Overhead Rate Expected Use of Cost Drivers per Treadmill Activity Center Cost Drivers Engineering design Engineering hours P30 per order 330 Machine setup Setups P200 per setup 22 Machining Machine hours P25 per hour 732 Assembly Number of sun- assemblies PB per sub assembly 1,450 Packaging and shipping Building occupancy Packaging. Shipping P15 per hour 152 hours Machine hours P6 por hour 732 Question: What is the cost per unit under Traditional Costing System and Activity-Based

TASK A. Problem Solving. Analyze the given proBIBs anu usU DIe for your answers. D Amore Companyproducestwoproductsinasinglefactory.Thefollowingproductionandcostinformationhasbe endetermined: Model 1 1,000 100 Model2 200 Unitsproduced Materialmoves(total) Testingtime(total) Directiaborhoursperunit 40 250 125 totaloverhead to Thecontrollerhasdetermined beP480,000.P140,000relatestomateriaimoves, P150,000relatestotesting; theremainderisr elatedtolabortime. a) If Amore uses direct labor hours to allocate overhead to ach model, what would overhead per unit be for Modei 2? b) If Amore uses activity-based costing to allocate overhoad to each model, what would overhead per unit be for Model 2? GLPower Company manufactures a line of high-end laundry equipment. The accountant has proposed changing from a traditional costing system to an activity-based costing system. The president is not convinced of making the changes, so he requests that the next large order for equipment be costed under both systems for purposes of comparison and analysis. An order from LaundryShop, Inc. for 150 washing machine is received. The following cost data LaundryShop order. elate to the Data relevant to both costing systems: Direct material Direct labor hours P55,500 820 P20.00 Direct labor rate per hour Date relevant to the treditional costing sysiem: Predetermined overhead rate is 300% of direct labor cost. Data relevant to the activity-based costing system. Activity-Based Overhead Rate Expected Use of Cost Drivers per Treadmill Activity Center Cost Drivers Engineering design Engineering hours P30 per order 330 Machine setup Setups P200 per setup 22 Machining Machine hours P25 per hour 732 Assembly Number of sun- assemblies PB per sub assembly 1,450 Packaging and shipping Building occupancy Packaging. Shipping P15 per hour 152 hours Machine hours P6 por hour 732 Question: What is the cost per unit under Traditional Costing System and Activity-Based

Auditing: A Risk Based-Approach to Conducting a Quality Audit
Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter8: Specialized Audit Tools: Sampling And Generalized Audit Software
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TASK A. Problem Solving. Analyze the given problems and use the worksheet provided for your answers. 1) Amore Companyproducestwoproductsinasinglefactory.Thefollowingproductionandcostinformationhasbe endetermined: Model1 1,000 100 Model2 200 Unitsproduced Materialmoves(total) Testingtime(total) Directiaborhoursperunit 40 250 125 Thecontrollerhasdetermined totaloverhead to beP480,000.P140,000relatestomateriaimoves;P150,000relatestotesting;theremainderisr elatedtolabortime. a) If Amore uses direct labor hours to allocate overhead to ach model, what would overhead per unit be for Model 2? b) If Amore uses activity-based costing to allocate overhoad to each model, what would overhead per unit be for Model 2? 2) GLPower Company manufactures a line of high-end laundry equipment. The accountant has proposed changing from a traditional costing syslem to an activity-based costing system. The president is not convinced of making the changes, so he requests that the next large order for equipment be costed under both systems for purposes of comparison and analysis. An order from LaundryShop, Inc. for 150 washing machine is received. The following cost data refate to the LaundryShop order. Data relevant to both costing systems: Direct material Direct labor hours P55,500 820 P20.00 Direct labor rate per hour Date relevant to the treditional costing sysiem: Predetermined overhead rate is 300% of direct labor cost. Data relevant to the activity-based costing system. Activity-Based Overhead Rate Expected Use of Cost Drivers per Activity Center Cost Drivers Treadmill Engineering design Engineering hours P30 per order 330 Machine setup Setups P200 per setup 22 Machining Machine hours P25 per hour 732 Assembly Number of sun- P8 per sub assembly 1,450 assemblies Packaging and shipping Building occupancy Packaging. Shipping hours Machine hours P15 per hour 152 P6 per hour 732 Question: What is the cost per unit under Traditional Costing System and Activity-Based Costing System?
Transcribed Image Text:TASK A. Problem Solving. Analyze the given problems and use the worksheet provided for your answers. 1) Amore Companyproducestwoproductsinasinglefactory.Thefollowingproductionandcostinformationhasbe endetermined: Model1 1,000 100 Model2 200 Unitsproduced Materialmoves(total) Testingtime(total) Directiaborhoursperunit 40 250 125 Thecontrollerhasdetermined totaloverhead to beP480,000.P140,000relatestomateriaimoves;P150,000relatestotesting;theremainderisr elatedtolabortime. a) If Amore uses direct labor hours to allocate overhead to ach model, what would overhead per unit be for Model 2? b) If Amore uses activity-based costing to allocate overhoad to each model, what would overhead per unit be for Model 2? 2) GLPower Company manufactures a line of high-end laundry equipment. The accountant has proposed changing from a traditional costing syslem to an activity-based costing system. The president is not convinced of making the changes, so he requests that the next large order for equipment be costed under both systems for purposes of comparison and analysis. An order from LaundryShop, Inc. for 150 washing machine is received. The following cost data refate to the LaundryShop order. Data relevant to both costing systems: Direct material Direct labor hours P55,500 820 P20.00 Direct labor rate per hour Date relevant to the treditional costing sysiem: Predetermined overhead rate is 300% of direct labor cost. Data relevant to the activity-based costing system. Activity-Based Overhead Rate Expected Use of Cost Drivers per Activity Center Cost Drivers Treadmill Engineering design Engineering hours P30 per order 330 Machine setup Setups P200 per setup 22 Machining Machine hours P25 per hour 732 Assembly Number of sun- P8 per sub assembly 1,450 assemblies Packaging and shipping Building occupancy Packaging. Shipping hours Machine hours P15 per hour 152 P6 per hour 732 Question: What is the cost per unit under Traditional Costing System and Activity-Based Costing System?
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