TASK A. Problem Solving. Analyze the given proBIBs anu usU DIe for your answers. D Amore Companyproducestwoproductsinasinglefactory.Thefollowingproductionandcostinformationhasbe endetermined: Model 1 1,000 100 Model2 200 Unitsproduced Materialmoves(total) Testingtime(total) Directiaborhoursperunit 40 250 125 totaloverhead to Thecontrollerhasdetermined beP480,000.P140,000relatestomateriaimoves, P150,000relatestotesting; theremainderisr elatedtolabortime. a) If Amore uses direct labor hours to allocate overhead to ach model, what would overhead per unit be for Modei 2? b) If Amore uses activity-based costing to allocate overhoad to each model, what would overhead per unit be for Model 2? GLPower Company manufactures a line of high-end laundry equipment. The accountant has proposed changing from a traditional costing system to an activity-based costing system. The president is not convinced of making the changes, so he requests that the next large order for equipment be costed under both systems for purposes of comparison and analysis. An order from LaundryShop, Inc. for 150 washing machine is received. The following cost data LaundryShop order. elate to the Data relevant to both costing systems: Direct material Direct labor hours P55,500 820 P20.00 Direct labor rate per hour Date relevant to the treditional costing sysiem: Predetermined overhead rate is 300% of direct labor cost. Data relevant to the activity-based costing system. Activity-Based Overhead Rate Expected Use of Cost Drivers per Treadmill Activity Center Cost Drivers Engineering design Engineering hours P30 per order 330 Machine setup Setups P200 per setup 22 Machining Machine hours P25 per hour 732 Assembly Number of sun- assemblies PB per sub assembly 1,450 Packaging and shipping Building occupancy Packaging. Shipping P15 per hour 152 hours Machine hours P6 por hour 732 Question: What is the cost per unit under Traditional Costing System and Activity-Based
TASK A. Problem Solving. Analyze the given proBIBs anu usU DIe for your answers. D Amore Companyproducestwoproductsinasinglefactory.Thefollowingproductionandcostinformationhasbe endetermined: Model 1 1,000 100 Model2 200 Unitsproduced Materialmoves(total) Testingtime(total) Directiaborhoursperunit 40 250 125 totaloverhead to Thecontrollerhasdetermined beP480,000.P140,000relatestomateriaimoves, P150,000relatestotesting; theremainderisr elatedtolabortime. a) If Amore uses direct labor hours to allocate overhead to ach model, what would overhead per unit be for Modei 2? b) If Amore uses activity-based costing to allocate overhoad to each model, what would overhead per unit be for Model 2? GLPower Company manufactures a line of high-end laundry equipment. The accountant has proposed changing from a traditional costing system to an activity-based costing system. The president is not convinced of making the changes, so he requests that the next large order for equipment be costed under both systems for purposes of comparison and analysis. An order from LaundryShop, Inc. for 150 washing machine is received. The following cost data LaundryShop order. elate to the Data relevant to both costing systems: Direct material Direct labor hours P55,500 820 P20.00 Direct labor rate per hour Date relevant to the treditional costing sysiem: Predetermined overhead rate is 300% of direct labor cost. Data relevant to the activity-based costing system. Activity-Based Overhead Rate Expected Use of Cost Drivers per Treadmill Activity Center Cost Drivers Engineering design Engineering hours P30 per order 330 Machine setup Setups P200 per setup 22 Machining Machine hours P25 per hour 732 Assembly Number of sun- assemblies PB per sub assembly 1,450 Packaging and shipping Building occupancy Packaging. Shipping P15 per hour 152 hours Machine hours P6 por hour 732 Question: What is the cost per unit under Traditional Costing System and Activity-Based
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:TASK A. Problem Solving. Analyze the given problems and use the worksheet provided
for your answers.
1) Amore
Companyproducestwoproductsinasinglefactory.Thefollowingproductionandcostinformationhasbe
endetermined:
Model1
1,000
100
Model2
200
Unitsproduced
Materialmoves(total)
Testingtime(total)
Directiaborhoursperunit
40
250
125
Thecontrollerhasdetermined
totaloverhead
to
beP480,000.P140,000relatestomateriaimoves;P150,000relatestotesting;theremainderisr
elatedtolabortime.
a) If Amore uses direct labor hours to allocate overhead to ach model, what would
overhead per unit be for Model 2?
b) If Amore uses activity-based costing to allocate overhoad to each model, what would
overhead per unit be for Model 2?
2) GLPower Company manufactures a line of high-end laundry equipment. The accountant has
proposed changing from a traditional costing syslem to an activity-based costing system. The
president is not convinced of making the changes, so he requests that the next large order for
equipment be costed under both systems for purposes of comparison and analysis. An order from
LaundryShop, Inc. for 150 washing machine is received. The following cost data refate to the
LaundryShop order.
Data relevant to both costing systems:
Direct material
Direct labor hours
P55,500
820
P20.00
Direct labor rate per hour
Date relevant to the treditional costing sysiem:
Predetermined overhead rate is 300% of direct labor cost.
Data relevant to the activity-based costing system.
Activity-Based
Overhead Rate
Expected Use of
Cost Drivers per
Activity Center
Cost Drivers
Treadmill
Engineering design
Engineering hours
P30 per order
330
Machine setup
Setups
P200 per setup
22
Machining
Machine hours
P25 per hour
732
Assembly
Number of sun-
P8 per sub assembly
1,450
assemblies
Packaging and
shipping
Building occupancy
Packaging. Shipping
hours
Machine hours
P15 per hour
152
P6 per hour
732
Question: What is the cost per unit under Traditional Costing System and Activity-Based
Costing System?
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