Multiple Versus Single Overhead Rates, Activity DriversDeoro Company has identified the following overhead activities, costs, and activity drivers for the coming year:Expected Cost Activity Driver Activity CapacityNumber of setupsNumber of ordersMachine hoursActivitySetting up equipment$491,050Ordering costs336,600Machine costs898,800Receiving362,600 Receiving hoursDeoro produces two models of dishwashers with the following expected prime costs and activity demands:Model AModel B$843,000$455,0008,2001,600Direct materialsDirect laborUnits completedDirect labor hoursNumber of setupsNumber of ordersMachine hours$563,000$459,00015,6006,8003606,90023,9003,200The company's normal activity is 8,400 direct labor hours.Receiving hours25012,90018,9006,60061019,80042,8009,800 Multiple Versus Single Overhead Rates, Activity DriversDeoro Company has identified the following overhead activities, costs, and activity drivers for the coming year:Expected Cost Activity Driver Activity CapacityNumber of setupsNumber of ordersMachine hoursActivitySetting up equipment$491,050Ordering costs336,600Machine costs898,800Receiving362,600 Receiving hoursDeoro produces two models of dishwashers with the following expected prime costs and activity demands:Model AModel B$843,000$455,0008,2001,600Direct materialsDirect laborUnits completedDirect labor hoursNumber of setupsNumber of ordersMachine hours$563,000$459,00015,6006,8003606,90023,9003,200The company's normal activity is 8,400 direct labor hours.Receiving hours25012,90018,9006,60061019,80042,8009,800

Name: Multiple Versus Single Overhead Rates, Activity DriversDeoro Company
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Description: Multiple Versus Single Overhead Rates, Activity DriversDeoro Company has identified the following overhead activities, costs, and activity drivers for the coming year:Expected Cost Activity Driver Activity CapacityNumber of setupsNumber of ordersMac

Overheads means all type of indirect costs and expenses being incurred in business. Overhead cost…

Business

Accounting

Required: 1. Determine the unit cost for each model using direct labor hours to apply overhead. Round intermediate calculations and final answers to nearest cent. Model A Model B Unit Cost 2. Determine the unit cost for each model using the four activity drivers. Round your answers to nearest cent. Unit Cost Model A Model B 3. Which method produces the more accurate cost assignment?

Required: 1. Determine the unit cost for each model using direct labor hours to apply overhead. Round intermediate calculations and final answers to nearest cent. Model A Model B Unit Cost 2. Determine the unit cost for each model using the four activity drivers. Round your answers to nearest cent. Unit Cost Model A Model B 3. Which method produces the more accurate cost assignment?

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 27E: Plata Company has identified the following overhead activities, costs, and activity drivers for the...

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Multiple Versus Single Overhead Rates, Activity Drivers Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year: Activity Expected Cost Activity Driver Activity Capacity Setting up equipment Ordering costs Machine costs Direct materials Direct labor Units completed Direct labor hours Number of setups Number of orders Machine hours Machine hours Receiving Receiving hours Deoro produces two models of dishwashers with the following expected prime costs and activity demands: Model A Model B $754,000 473,000 7,800 2,400 Receiving hours Model A $407,490 374,000 952,200 6,500 360 6,100 12,600 24,400 17,000 2,600 6,400 The company's normal activity is 8,900 direct labor hours. Model B 405,000 Model A $593,000 478,000 Model B Number of setups Number of orders 16,800 Required: 1. Determine the unit cost for each model using direct labor hours to apply overhead. Round intermediate calculations and final answers to nearest cent. Unit Cost 150…