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Rondeau, Incorporated, manufactures and sells two products: Product V9 and Product M6. Data concerning the expected production of each product and the expected total direct labor-hours (DLHS) required to produce that output appear below: Product V9 Product M6 Product V9 Product M6 Total direct labor-hours The direct labor rate is $27.00 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit $ 289.60 $ 182.80 Activity Cost Pools Labor-related Product testing Order size Traditional unit product cost ABC unit product cost Difference Expected Production The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: $ 620 720 Product V9 Direct Labor-Hours Per Unit 12.2 9.2 Activity Measures Estimated Overhead Cost DLHS $ 102,656 Tests MHS 76,008 400,000 $ 578,664 Product M6 0.00 $ Total Direct Labor-Hours 7,564 6,624 14, 188 Required: Calculate the difference between the unit product costs under the traditional costing method and the activity-based costing system for each of the two products. (Round your Intermediate calculations and final answers to 2 decimal places. Enter your answers as positive values.) 0.00 Product V9 7,564 1,080 5,500 Expected Activity Product M6 6,624 1,440 4,880 Total 14,188 2,520 10,380

Rondeau, Incorporated, manufactures and sells two products: Product V9 and Product M6. Data concerning the expected production of each product and the expected total direct labor-hours (DLHS) required to produce that output appear below: Product V9 Product M6 Product V9 Product M6 Total direct labor-hours The direct labor rate is $27.00 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit $ 289.60 $ 182.80 Activity Cost Pools Labor-related Product testing Order size Traditional unit product cost ABC unit product cost Difference Expected Production The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: $ 620 720 Product V9 Direct Labor-Hours Per Unit 12.2 9.2 Activity Measures Estimated Overhead Cost DLHS $ 102,656 Tests MHS 76,008 400,000 $ 578,664 Product M6 0.00 $ Total Direct Labor-Hours 7,564 6,624 14, 188 Required: Calculate the difference between the unit product costs under the traditional costing method and the activity-based costing system for each of the two products. (Round your Intermediate calculations and final answers to 2 decimal places. Enter your answers as positive values.) 0.00 Product V9 7,564 1,080 5,500 Expected Activity Product M6 6,624 1,440 4,880 Total 14,188 2,520 10,380

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
Chapter2: Basic Cost Management Concepts
Section: Chapter Questions
Problem 13E: Wyandotte Company provided the following information for the last calendar year: During the year,...
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Rondeau, Incorporated, manufactures and sells two products: Product V9 and Product M6. Data concerning the expected production of each product and the expected total direct labor-hours (DLHS) required to produce that output appear below: Total Direct Labor-Hours 7,564 6,624 14, 188 The direct labor rate is $27.00 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit Product V9 Product M6 Total direct labor-hours Product V9 Product M6 $ 289.60 $ 182.80 Activity Cost Pools Labor-related Product testing Order size The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Traditional unit product cost ABC unit product cost Difference Expected Production 620 720 Product V9 $ Direct Labor-Hours Per Unit 12.2 9.2 Activity Measures Estimated Overhead Cost DLHS $ 102,656 76,008 Tests MHS Product M6 0.00 $ Required: Calculate the difference between the unit product costs under the traditional costing method and the activity-based costing system for each of the two products. (Round your intermediate calculations and final answers to 2 decimal places. Enter your answers as positive values.) 400,000 $ 578,664 0.00 Product V9 7,564 1,080 5,500 Expected Activity Product M6 6,624 1,440 4,880 Total 14, 188 2,520 10, 380
Transcribed Image Text:Rondeau, Incorporated, manufactures and sells two products: Product V9 and Product M6. Data concerning the expected production of each product and the expected total direct labor-hours (DLHS) required to produce that output appear below: Total Direct Labor-Hours 7,564 6,624 14, 188 The direct labor rate is $27.00 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit Product V9 Product M6 Total direct labor-hours Product V9 Product M6 $ 289.60 $ 182.80 Activity Cost Pools Labor-related Product testing Order size The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Traditional unit product cost ABC unit product cost Difference Expected Production 620 720 Product V9 $ Direct Labor-Hours Per Unit 12.2 9.2 Activity Measures Estimated Overhead Cost DLHS $ 102,656 76,008 Tests MHS Product M6 0.00 $ Required: Calculate the difference between the unit product costs under the traditional costing method and the activity-based costing system for each of the two products. (Round your intermediate calculations and final answers to 2 decimal places. Enter your answers as positive values.) 400,000 $ 578,664 0.00 Product V9 7,564 1,080 5,500 Expected Activity Product M6 6,624 1,440 4,880 Total 14, 188 2,520 10, 380
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