Alpha Technology produces two products: a high-end laptop under the label Excellent Laptops and an inexpensive desktop under the label Outstanding Computers. The two products use two overhead activities, with the following costs:Setting up equipment$3,000Machining$15,000The controller has collected the expected annual prime costs for each product, the machine hours, the setup hours, and the expected production.Excellent LaptopsOutstanding ComputersDirect labor$25,000$10,000Direct materials$20,000$5,000Expected production in units3,0003,000Machine hours8502,000Setup hours8075Calculate the overhead cost per unit for Excellent Laptops using a plantwide rate based on direct labor costs. (Note: Round the overhead rateto two decimal places; round the final answer to two decimal places.)

Overhead cost is defined as those expenses which is linked with running the business that could not…

Answered: Alpha Technology produces two products:…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter13: The Balanced Scorecard: Strategic-based Control

Section: Chapter Questions

Problem 8E: Hatch Manufacturing produces multiple machine parts. The theoretical cycle time for one of its...

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Alpha Technology produces two products: a high-end laptop under the label Excellent Laptops and an inexpensive desktop under the label Outstanding Computers. The two products use two overhead activities, with the following costs:

Setting up equipment	$3,000
Machining	$15,000

The controller has collected the expected annual prime costs for each product, the machine hours, the setup hours, and the expected production.

	Excellent Laptops	Outstanding Computers
Direct labor	$25,000	$10,000
Direct materials	$20,000	$5,000
Expected production in units	3,000	3,000
Machine hours	850	2,000
Setup hours	80	75

Calculate the overhead cost per unit for Excellent Laptops using a plantwide rate based on direct labor costs. (Note: Round the overhead rateto two decimal places; round the final answer to two decimal places.)

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