FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Concept explainers

Manufacturing Costs
Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.
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Q1) Q2) Use the following information to answer the questions below. Poodle Company manufactures two products, Mini A and Maxi B. Poodle's overhead costs consist of setting up machines- $800,000; machining- $2,000,000; and inspecting- 5600,000. Information on the two products is: Direct labour hours Machine setups Machine hours Mini A 25,000 400 15,000 600 24,000 Inspections 800 Calculate the overhead rate using the traditional (plant-wide) approach? Calculate the overhead rate using the activity-based costing approach? Maxi B 26,000 700
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Transcribed Image Text:Q1) Q2) Use the following information to answer the questions below. Poodle Company manufactures two products, Mini A and Maxi B. Poodle's overhead costs consist of setting up machines- $800,000; machining- $2,000,000; and inspecting- 5600,000. Information on the two products is: Direct labour hours Machine setups Machine hours Mini A 25,000 400 15,000 600 24,000 Inspections 800 Calculate the overhead rate using the traditional (plant-wide) approach? Calculate the overhead rate using the activity-based costing approach? Maxi B 26,000 700
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