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QS 4-5 Chen Company identified the following activities, costs, and activity drivers. Activity Expected Costs Expected Activity 100,000 parts in stock 1,500 batches 700 orders 500 invoices 40,000 square feet 10 models Handling materials Inspecting product Processing purchase orders Paying suppliers Insuring the factory Designing packaging Production volume........ Parts required Batches made Purchase orders Invoices Space occupied Models $625.000 900,000 105.000 175.000 300,000 375.000 Fast Model 10,000 units 20.000 parts 250 batches 50 orders 50 invoices 10,000 sqft I model Standard Model 30.000 units 30.000 parts 100 batches 20 orders 10 invoices 7,000 I model Required 1. Assign overhead costs to each product model using activity-based costing (ABC). What is the cost per unit of each model? 2. Assume the plantwide overhead rate is $24.80/DLH. Assign overhead costs to each product model using the single plantwide overhead rate assuming the fast model requires 25,000 direct labor hours and the standard model requires 60,000 direct labor hours. What is the overhead cost per unit for each model?

QS 4-5 Chen Company identified the following activities, costs, and activity drivers. Activity Expected Costs Expected Activity 100,000 parts in stock 1,500 batches 700 orders 500 invoices 40,000 square feet 10 models Handling materials Inspecting product Processing purchase orders Paying suppliers Insuring the factory Designing packaging Production volume........ Parts required Batches made Purchase orders Invoices Space occupied Models $625.000 900,000 105.000 175.000 300,000 375.000 Fast Model 10,000 units 20.000 parts 250 batches 50 orders 50 invoices 10,000 sqft I model Standard Model 30.000 units 30.000 parts 100 batches 20 orders 10 invoices 7,000 I model Required 1. Assign overhead costs to each product model using activity-based costing (ABC). What is the cost per unit of each model? 2. Assume the plantwide overhead rate is $24.80/DLH. Assign overhead costs to each product model using the single plantwide overhead rate assuming the fast model requires 25,000 direct labor hours and the standard model requires 60,000 direct labor hours. What is the overhead cost per unit for each model?

Financial & Managerial Accounting
Financial & Managerial Accounting
13th Edition
ISBN:9781285866307
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter26: Cost Allocation And Activity-Based Costing
Section: Chapter Questions
Problem 26.8EX: Identifying activity bases in an activity-based cost system Select Foods Inc. uses activity-based...
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QS 4-5 Chen Company identified the following activities, costs, and activity drivers. Activity Expected Costs Handling materials Inspecting product Processing purchase orders Paying suppliers. Insuring the factory Designing packaging Production volume Parts required Batches made Purchase orders Invoices Space occupied Models $625,000 900,000 105,000 175,000 300,000 375.000 Fast Model 10,000 units 20,000 parts 250 batches 50 orders 50 invoices 10,000 sq.ft. I model Expected Activity 100,000 parts in stock 1,500 batches 700 orders 500 invoices 40,000 square feet 10 models Standard Model 30,000 units 30,000 parts 100 batches 20 orders 10 invoices 7,000 sq.ft. I model Required 1. Assign overhead costs to each product model using activity-based costing (ABC). What is the cost per unit of each model? 2. Assume the plantwide overhead rate is $24.80/DLH. Assign overhead costs to each product model using the single plantwide overhead rate assuming the fast model requires 25,000 direct labor hours and the standard model requires 60,000 direct labor hours. What is the overhead cost per unit for each model?
Transcribed Image Text:QS 4-5 Chen Company identified the following activities, costs, and activity drivers. Activity Expected Costs Handling materials Inspecting product Processing purchase orders Paying suppliers. Insuring the factory Designing packaging Production volume Parts required Batches made Purchase orders Invoices Space occupied Models $625,000 900,000 105,000 175,000 300,000 375.000 Fast Model 10,000 units 20,000 parts 250 batches 50 orders 50 invoices 10,000 sq.ft. I model Expected Activity 100,000 parts in stock 1,500 batches 700 orders 500 invoices 40,000 square feet 10 models Standard Model 30,000 units 30,000 parts 100 batches 20 orders 10 invoices 7,000 sq.ft. I model Required 1. Assign overhead costs to each product model using activity-based costing (ABC). What is the cost per unit of each model? 2. Assume the plantwide overhead rate is $24.80/DLH. Assign overhead costs to each product model using the single plantwide overhead rate assuming the fast model requires 25,000 direct labor hours and the standard model requires 60,000 direct labor hours. What is the overhead cost per unit for each model?
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