IronBallon Co.makes two beverages: ZIPA and Zager. The following data is summarized: Cost ZIPA Zager Direct materials cost per unit $490 $2,010 Direct labor cost per unit $560 $120 Indirect manufacturing cost per unit ? ? Indirect manufacturing cost information includes the following: Activity Predetermined Overhead Allocation Rate ZIPA Zager Setup $1,210.00 45 Per setup 85 Per setup Machine maintenance $17.00 1,210 Per MHr 3,740 Per MHr IronBallon Co. plans to produce 290 units of each product. (Round your answers to two decimal places when needed and use rounded answers for all future calculations). 1. Compute the ABC indirect manufacturing cost per unit for each product. ZIPA Predetermined Overhead Allocation Rate X Actual Quantity of the Allocation Base Used = Actual Manufacturing Overhead Cost Setup X = Machine Maintenance X = Total Estimated Overhead Costs Number of products Manufacturing overhead cost per product Zager Predetermined Overhead Allocation Rate X Actual Quantity of the Allocation Base Used = Actual Manufacturing Overhead Cost Setup X = Machine Maintenance X = Total Estimated Overhead Costs Number of products Manufacturing overhead cost per product 2. Determine the manufacturing overhead cost per product and the total cost per unit. Cost ZIPA Zager Direct Materials cost per unit Direct Labor cost per unit Manufacturing overhead cost per unit Total product cost per unit

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

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IronBallon Co.makes two beverages: ZIPA and Zager. The following data is summarized:

Cost	ZIPA	Zager
Direct materials cost per unit	$490	$2,010
Direct labor cost per unit	$560	$120
Indirect manufacturing cost per unit	?	?

Indirect manufacturing cost information includes the following:

Activity	Predetermined Overhead Allocation Rate	ZIPA	Zager
Setup	$1,210.00	45 Per setup	85 Per setup
Machine maintenance	$17.00	1,210 Per MHr	3,740 Per MHr

IronBallon Co. plans to produce 290 units of each product.

(Round your answers to two decimal places when needed and use rounded answers for all future calculations).

1. Compute the ABC indirect manufacturing cost per unit for each product.

ZIPA	X	=
Setup	X	=
Machine Maintenance	X	=
		Total Estimated Overhead Costs
		Number of products
		Manufacturing overhead cost per product

Zager	X	=
Setup	X	=
Machine Maintenance	X	=
		Total Estimated Overhead Costs
		Number of products
		Manufacturing overhead cost per product

2. Determine the manufacturing overhead cost per product and the total cost per unit.

Cost	ZIPA	Zager
Direct Materials cost per unit
Direct Labor cost per unit
Manufacturing overhead cost per unit
Total product cost per unit

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