FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Consider the following data for two products of Vigano Manufacturing.
 

Activity Budgeted Cost Activity Driver
Machine setup $ 19,000 (20 machine setups)
Parts handling 15,200 (16,000 parts)
Quality inspections 22,800 (100 inspections)
Total budgeted overhead $ 57,000  

 

Unit Information Product A Product B
Units produced 1,900 units 380 units
Direct materials cost $ 29 per unit $ 39 per unit
Direct labor cost $ 49 per unit $ 59 per unit
Direct labor hours 2 per unit 2.50 per unit


1. Using a plantwide overhead rate based on 4,750 direct labor hours, compute the total product cost per unit for each product.
2. Consider the following additional information about these two products. If activity-based costing is used to allocate overhead cost, (a) compute overhead activity rates, (b) allocate overhead cost to Product A and Product B and compute overhead cost per unit for each, and (c) compute product cost per unit for each.
 

Actual Activity Usage Product A Product B
Setups 8 setups 12 setups
Parts 10,000 parts 6,000 parts
Inspections 40 inspections 60 inspections
Consider the following additional information about these two products. If activity-based costing is used to allocate overhead
cost, (a) compute overhead activity rates, (b) allocate overhead cost to Product A and Product B and compute overhead cost
per unit for each, and (c) compute product cost per unit for each. (Round your final answers to 2 decimal places.)
Show less
a. Compute overhead activity rates
Activity
Machine setup
Parts handling
Quality inspection
per setup
per part
per inspection
b. Allocate overhead to Product A, B and compute overhead cost per unit
Allocated Cost
Activity
Machine setup
Parts handling
Quality inspection
Total allocated cost
Units produced
Product A
Product B
$
Activity Rate
Overhead cost per unit
c. Product cost per unit using activity-based costing
Per Unit
Product A
Product Cost per
Unit
0 $
Product B
0
expand button
Transcribed Image Text:Consider the following additional information about these two products. If activity-based costing is used to allocate overhead cost, (a) compute overhead activity rates, (b) allocate overhead cost to Product A and Product B and compute overhead cost per unit for each, and (c) compute product cost per unit for each. (Round your final answers to 2 decimal places.) Show less a. Compute overhead activity rates Activity Machine setup Parts handling Quality inspection per setup per part per inspection b. Allocate overhead to Product A, B and compute overhead cost per unit Allocated Cost Activity Machine setup Parts handling Quality inspection Total allocated cost Units produced Product A Product B $ Activity Rate Overhead cost per unit c. Product cost per unit using activity-based costing Per Unit Product A Product Cost per Unit 0 $ Product B 0
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Using a plantwide overhead rate based on 4,750 direct labor hours, compute the total product cost per unit for each product.
Direct
Materials
Product Cost
per Unit
Per Unit
Product A
Product B
Direct Labor Overhead
expand button
Transcribed Image Text:Complete this question by entering your answers in the tabs below. Required 1 Required 2 Using a plantwide overhead rate based on 4,750 direct labor hours, compute the total product cost per unit for each product. Direct Materials Product Cost per Unit Per Unit Product A Product B Direct Labor Overhead
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