equired information Use the following information for the Problems below. (Algo) Skip to question [The following information applies to the questions displayed below.] Tent Master produces Pup tents and Pop-up tents. The company budgets $360,000 of overhead cost and 60,000 direct labor hours. Additional information follows. Per Unit Selling Price Direct Materials Direct Labor Pup tent $ 85 $ 20 $ 47 Pop-up tent 80 27 31 Problem 17-3A (Algo) Using activity-based costing to allocate overhead cost, and compute overhead cost per unit and gross profit per unit LO P3 Activity Budgeted Cost Activity Cost Driver Budgeted Activity Usage Assembly $ 240,000 Direct labor hours (DLH) 60,000 Electricity 42,000 Machine hours (MH) 10,000 Materials purchasing 78,000 Purchase orders (PO) 500 Total $ 360,000 Required: 1. Compute an activity rate for each activity using activity-based costing. 2. The following actual activity usage produced 10,000 Pup tents and 7,500 Pop-up tents. Allocate overhead cost to Pup tents and to Pop-up tents and compute overhead cost per unit for each product. Activity Cost Driver Activity Usage Pup tents Direct labor hours(DLH) 39,000 21,000 Machine hours (MH) 4,500 5,500 Purchase orders(PO) 200 300 3. Compute product cost per unit for Pup tents and for Pop-up tents. 4. For each product, compute the gross profit per unit (selling price per unit minus the product cost per unit).

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Required information

Use the following information for the Problems below. (Algo)

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[The following information applies to the questions displayed below.]

Tent Master produces Pup tents and Pop-up tents. The company budgets $360,000 of overhead cost and 60,000 direct labor hours. Additional information follows.

Per Unit	Selling Price	Direct Materials	Direct Labor
Pup tent	$ 85	$ 20	$ 47
Pop-up tent	80	27	31

Problem 17-3A (Algo) Using activity-based costing to allocate overhead cost, and compute overhead cost per unit and gross profit per unit LO P3

Activity	Budgeted Cost	Activity Cost Driver	Budgeted Activity Usage
Assembly	$ 240,000	Direct labor hours (DLH)	60,000
Electricity	42,000	Machine hours (MH)	10,000
Materials purchasing	78,000	Purchase orders (PO)	500
Total	$ 360,000

Required:
1. Compute an activity rate for each activity using activity-based costing.
2. The following actual activity usage produced 10,000 Pup tents and 7,500 Pop-up tents. Allocate overhead cost to Pup tents and to Pop-up tents and compute overhead cost per unit for each product.

Activity Cost Driver	Activity Usage
	Pup tents
Direct labor hours(DLH)	39,000	21,000
Machine hours (MH)	4,500	5,500
Purchase orders(PO)	200	300

3. Compute product cost per unit for Pup tents and for Pop-up tents.
4. For each product, compute the gross profit per unit (selling price per unit minus the product cost per unit).

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