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Ice Cool produces two different models of air conditioners. The activities, costs, and cost drivers associated with the production processes follow. Process Activity Assembly Machining Setups Budgeted Cost $ 311,400 22,000 $ 333,400 Finishing Inspecting $ 226,000 Support Purchasing $ 134,000 Budgeted Activity Activity Cost Driver Machine hours (MH) Usage 7,600 Setups 120 Inspections 780 Purchase orders 510 Additional production information concerning its two models follows. Units and Activities Units produced Model X Model Z 2,200 4,400 Machine hours Setups Inspections Purchase orders 2,000 5,600 40 80 480 300 340 170 Per Unit Selling price per unit Model X $ 400 Model Z $ 380 Direct materials cost per unit Direct labor cost per unit 155 135 105 135 1. Compute the activity rate for each activity using activity-based costing. 2. Using activity-based costing, compute the overhead cost per unit for each model. 3. Compute the total product cost per unit for each model. 4. For each model, compute the gross profit per unit (selling price per unit minus product cost per unit). Using activity-based costing, compute the overhead cost per unit for each model. Note: Round "Activity Rate" to 2 decimal places and other answers to the nearest whole dollar amount. Overhead cost per unit-Model X Activity Activity Usage Machining Setups Inspection Purchasing Total allocated cost Units produced + Activity Rate Allocated Cost $ EA Overhead cost per unit 0 Overhead cost per unit-Model Z Activity Activity Usage Activity Rate Allocated Cost Machining Setups Inspection Purchasing Total allocated cost Units produced Overhead cost per unit $ SA 0 0 0

Ice Cool produces two different models of air conditioners. The activities, costs, and cost drivers associated with the production processes follow. Process Activity Assembly Machining Setups Budgeted Cost $ 311,400 22,000 $ 333,400 Finishing Inspecting $ 226,000 Support Purchasing $ 134,000 Budgeted Activity Activity Cost Driver Machine hours (MH) Usage 7,600 Setups 120 Inspections 780 Purchase orders 510 Additional production information concerning its two models follows. Units and Activities Units produced Model X Model Z 2,200 4,400 Machine hours Setups Inspections Purchase orders 2,000 5,600 40 80 480 300 340 170 Per Unit Selling price per unit Model X $ 400 Model Z $ 380 Direct materials cost per unit Direct labor cost per unit 155 135 105 135 1. Compute the activity rate for each activity using activity-based costing. 2. Using activity-based costing, compute the overhead cost per unit for each model. 3. Compute the total product cost per unit for each model. 4. For each model, compute the gross profit per unit (selling price per unit minus product cost per unit). Using activity-based costing, compute the overhead cost per unit for each model. Note: Round "Activity Rate" to 2 decimal places and other answers to the nearest whole dollar amount. Overhead cost per unit-Model X Activity Activity Usage Machining Setups Inspection Purchasing Total allocated cost Units produced + Activity Rate Allocated Cost $ EA Overhead cost per unit 0 Overhead cost per unit-Model Z Activity Activity Usage Activity Rate Allocated Cost Machining Setups Inspection Purchasing Total allocated cost Units produced Overhead cost per unit $ SA 0 0 0

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 4CE: Larsen, Inc., produces two types of electronic parts and has provided the following data: There are...
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Ice Cool produces two different models of air conditioners. The activities, costs, and cost drivers associated with the production processes follow. Process Activity Assembly Machining Setups Budgeted Cost $ 311,400 22,000 $ 333,400 Finishing Inspecting $ 226,000 Support Purchasing $ 134,000 Budgeted Activity Activity Cost Driver Machine hours (MH) Usage 7,600 Setups 120 Inspections 780 Purchase orders 510 Additional production information concerning its two models follows. Units and Activities Units produced Model X Model Z 2,200 4,400 Machine hours Setups Inspections Purchase orders 2,000 5,600 40 80 480 300 340 170 Per Unit Selling price per unit Model X $ 400 Model Z $ 380 Direct materials cost per unit Direct labor cost per unit 155 135 105 135 1. Compute the activity rate for each activity using activity-based costing. 2. Using activity-based costing, compute the overhead cost per unit for each model. 3. Compute the total product cost per unit for each model. 4. For each model, compute the gross profit per unit (selling price per unit minus product cost per unit).
Transcribed Image Text:Ice Cool produces two different models of air conditioners. The activities, costs, and cost drivers associated with the production processes follow. Process Activity Assembly Machining Setups Budgeted Cost $ 311,400 22,000 $ 333,400 Finishing Inspecting $ 226,000 Support Purchasing $ 134,000 Budgeted Activity Activity Cost Driver Machine hours (MH) Usage 7,600 Setups 120 Inspections 780 Purchase orders 510 Additional production information concerning its two models follows. Units and Activities Units produced Model X Model Z 2,200 4,400 Machine hours Setups Inspections Purchase orders 2,000 5,600 40 80 480 300 340 170 Per Unit Selling price per unit Model X $ 400 Model Z $ 380 Direct materials cost per unit Direct labor cost per unit 155 135 105 135 1. Compute the activity rate for each activity using activity-based costing. 2. Using activity-based costing, compute the overhead cost per unit for each model. 3. Compute the total product cost per unit for each model. 4. For each model, compute the gross profit per unit (selling price per unit minus product cost per unit).
Using activity-based costing, compute the overhead cost per unit for each model. Note: Round "Activity Rate" to 2 decimal places and other answers to the nearest whole dollar amount. Overhead cost per unit-Model X Activity Activity Usage Machining Setups Inspection Purchasing Total allocated cost Units produced + Activity Rate Allocated Cost $ EA Overhead cost per unit 0 Overhead cost per unit-Model Z Activity Activity Usage Activity Rate Allocated Cost Machining Setups Inspection Purchasing Total allocated cost Units produced Overhead cost per unit $ SA 0 0 0
Transcribed Image Text:Using activity-based costing, compute the overhead cost per unit for each model. Note: Round "Activity Rate" to 2 decimal places and other answers to the nearest whole dollar amount. Overhead cost per unit-Model X Activity Activity Usage Machining Setups Inspection Purchasing Total allocated cost Units produced + Activity Rate Allocated Cost $ EA Overhead cost per unit 0 Overhead cost per unit-Model Z Activity Activity Usage Activity Rate Allocated Cost Machining Setups Inspection Purchasing Total allocated cost Units produced Overhead cost per unit $ SA 0 0 0
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