Problem 17-3B Using activity-based costing to allocate overhead cost, and compute overhead cost per unit angross profit per unit P3Refer to the information in Problem 17-2B. Additional information on overhead cost follows.ActivityMixingElectricityInspectionTotalBudgeted Cost$160,00022,00098,000$280,000Activity Cost DriverDirect labor hours (DLH)Machine hours (MH)InspectionsActivity Cost DriverDirect labor hours (DLH)Machine hours (MH)InspectionsRequired1. Compute an activity rate for each activity using activity-based costing.2. The following actual activity usage produced 12,000 units of Extra Fine and 8,000 units of Family Style. Allocate overhead cost toExtra Fine and to Family Style and compute overhead cost per unit for each product using activity-based costing.Budgeted Activity UsageActivity UsageExtra Fine28,0006,000274Family Style40,00010,00049012,0004,0002163. Compute product cost per unit for Extra Fine and for Family Style.4. For each product, compute the gross profit per unit (selling price per unit minus the product cost per unit). Problem 17-2B Using plantwide overhead rate to allocate overhead cost, and compute overhead cost per unitand gross profit per unit P1Sara's Salsa produces salsa in two types: Extra Fine for restaurants and Family Style for home use. The company budgets $280,000 ofoverhead cost and 40,000 direct labor hours. Additional information follows.Per Unit (case) Selling PriceExtra FineFamily Style$6453Direct Materials$1816Direct Labor$3025Required1. Compute a single plantwide overhead rate assuming the company allocates overhead cost based on 40,000 direct labor hours.2. Extra Fine uses 2 direct labor hours per unit and Family Style uses 1.5 direct labor hours per unit. Compute the overhead cost per unitfor each product.3. Compute the product cost per unit for each product.4. For each product, compute the gross profit per unit (selling price per unit minus the product cost per unit).

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Problem 17-2B Using plantwide overhead rate to allocate overhead cost, and compute overhead cost per unit and gross profit per unit P1 Sara's Salsa produces salsa in two types: Extra Fine for restaurants and Family Style for home use. The company budgets $280,000 of overhead cost and 40,000 direct labor hours. Additional information follows. Per Unit (case) Extra Fine Family Style Selling Price $64 53 Direct Materials $18 16 Direct Labor $30 25 Required 1. Compute a single plantwide overhead rate assuming the company allocates overhead cost based on 40,000 direct labor hours. 2. Extra Fine uses 2 direct labor hours per unit and Family Style uses 1.5 direct labor hours per unit. Compute the overhead cost per unit for each product. 3. Compute the product cost per unit for each product. 4. For each product, compute the gross profit per unit (selling price per unit minus the product cost per unit).

Problem 17-2B Using plantwide overhead rate to allocate overhead cost, and compute overhead cost per unit and gross profit per unit P1 Sara's Salsa produces salsa in two types: Extra Fine for restaurants and Family Style for home use. The company budgets $280,000 of overhead cost and 40,000 direct labor hours. Additional information follows. Per Unit (case) Extra Fine Family Style Selling Price $64 53 Direct Materials $18 16 Direct Labor $30 25 Required 1. Compute a single plantwide overhead rate assuming the company allocates overhead cost based on 40,000 direct labor hours. 2. Extra Fine uses 2 direct labor hours per unit and Family Style uses 1.5 direct labor hours per unit. Compute the overhead cost per unit for each product. 3. Compute the product cost per unit for each product. 4. For each product, compute the gross profit per unit (selling price per unit minus the product cost per unit).

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 13MC: Activity-based costing systems: A. use a single predetermined overhead rate based on machine hours...

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