Tulip Company produces two products, T and U. The indirect labor costs include the following two items: Plant supervision $700,000 Setup labor (indirect) 300,000 Total indirect labor $1,000,000 The following activity-base usage and unit production information is available for the two products: Number of Setups Direct Labor Hours Units Product T 200 20,000 900 Product U 200 30,000 1,100 Total 400 50,000 2,000 a. Determine the single plantwide factory overhead rate, using direct labor hours as the activity base.
Tulip Company produces two products, T and U. The indirect labor costs include the following two items: Plant supervision $700,000 Setup labor (indirect) 300,000 Total indirect labor $1,000,000 The following activity-base usage and unit production information is available for the two products: Number of Setups Direct Labor Hours Units Product T 200 20,000 900 Product U 200 30,000 1,100 Total 400 50,000 2,000 a. Determine the single plantwide factory overhead rate, using direct labor hours as the activity base.
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter18: Activity-based Costing
Section: Chapter Questions
Problem 2PA: The management of Gwinnett County Chrome Company, described in Problem 1A, now plans to use the...
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Tulip Company produces two products, T and U. The indirect labor costs include the following two items:
| Plant supervision | $700,000 |
| Setup labor (indirect) | 300,000 |
| Total indirect labor | $1,000,000 |
The following activity-base usage and unit production information is available for the two products:
| Number of Setups | Direct Labor Hours |
Units |
|
| Product T | 200 | 20,000 | 900 |
| Product U | 200 | 30,000 | 1,100 |
| Total | 400 | 50,000 | 2,000 |
a. Determine the single plantwide factory overhead rate, using direct labor hours as the activity base.
Transcribed Image Text:per dlh
b. Determine the factory overhead cost per unit for Products T and U, using the single plantwide factory overhead rate. Round your answers to two
decimal places.
Factory overhead
cost per unit
Product T
Product U
c. Determine the activity rate for plant supervision and setup labor, assuming that the activity base for supervision is direct labor hours and the activity
base for setup labor is number of setups.
Setup
Supervision
Activity rate
per setup
per dlh
d. Determine the factory overhead cost per unit for Products T and U, using activity-based costing. Round your answers to two decimal places.
Factory overhead
cost per unit
Product T
Product U
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