39. LO.4 (ABC) Illiad Inc. has a total of $2,362,500 in production overhead costs. The company's products and related statistics follow. Direct material in pounds Direct labor hours Machine hours Number of setups Number of units produced Product A 139,500 30,000 52,500 430 15,000 Product B 190,500 37,500 22,500 860 7,500 Additional data: The 330,000 pounds of material were purchased for $544,500. One direct labor hour costs $12. a. Assume that Illiad Inc. uses direct labor hours to apply overhead to products. Determine the total cost for each product and the cost per unit. b. Assume that Illiad Inc. uses machine hours to apply overhead to products. Determine the total cost for each product and the cost per unit. c. Assume that Illiad Inc. uses the following activity centers, cost drivers, and costs to apply overhead to products: Cost Pool Cost Driver Utilities # of machine hours Setup # of setups Material handling # of pounds of material Determine the total cost for each product and the cost per unit. Cost $ 750,000 193,500 1,419,000

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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LO.4 (ABC) Illiad Inc. has a total of $2,362,500 in production overhead costs. The 
company’s products and related statistics follow.

39. LO.4 (ABC) Illiad Inc. has a total of $2,362,500 in production overhead costs. The
company's products and related statistics follow.
Direct material in pounds
Direct labor hours
Machine hours
Number of setups
Number of units produced
Product A
139,500
30,000
52,500
430
15,000
Product B
190,500
37,500
22,500
860
7,500
Additional data: The 330,000 pounds of material were purchased for $544,500. One
direct labor hour costs $12.
a. Assume that Illiad Inc. uses direct labor hours to apply overhead to products.
Determine the total cost for each product and the cost per unit.
b. Assume that Illiad Inc. uses machine hours to apply overhead to products. Determine
the total cost for each product and the cost per unit.
c. Assume that Illiad Inc. uses the following activity centers, cost drivers, and costs to
apply overhead to products:
Cost Pool
Utilities
Setup
Material handling
Determine the total cost for each product and the cost per unit.
Cost Driver
# of machine hours
# of setups
# of pounds of material
Cost
$ 750,000
193,500
1,419,000
Transcribed Image Text:39. LO.4 (ABC) Illiad Inc. has a total of $2,362,500 in production overhead costs. The company's products and related statistics follow. Direct material in pounds Direct labor hours Machine hours Number of setups Number of units produced Product A 139,500 30,000 52,500 430 15,000 Product B 190,500 37,500 22,500 860 7,500 Additional data: The 330,000 pounds of material were purchased for $544,500. One direct labor hour costs $12. a. Assume that Illiad Inc. uses direct labor hours to apply overhead to products. Determine the total cost for each product and the cost per unit. b. Assume that Illiad Inc. uses machine hours to apply overhead to products. Determine the total cost for each product and the cost per unit. c. Assume that Illiad Inc. uses the following activity centers, cost drivers, and costs to apply overhead to products: Cost Pool Utilities Setup Material handling Determine the total cost for each product and the cost per unit. Cost Driver # of machine hours # of setups # of pounds of material Cost $ 750,000 193,500 1,419,000
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