TB Problem 5-163 (Algo) Roadmaster Tires produces a variety...Roadmaster Tires produces a variety of auto and truck tires at its Indianapolis manufacturing plant. The plant is highly automated anduses an activity-based costing system to allocate overhead costs to its various product lines. The costs and cost drivers associatedwith four activity cost pools are given below:Activities:CostCost DriverUnit Level$88,4005,200 labor hoursBatch Level$66,000220 setupsProduction of 1,000 units of a small tractor tire required 320 labor hours and two setups and consumed 20% of the product sustainingactivities.a. Overhead allocated using company-wide allocation baseb. Overhead allocated under activity-based costinge-1. Selling price per unit under direct labor hours approach0-2. Selling price per unit under activity-based costingProduct Level$30,000% of useRequired:a. Instead of using ABC, suppose the company had used labor hours as a company-wide allocation base. How much total overheadwould have been allocated to the tractor tire?b. How much total overhead cost will be allocated to the tire under activity-based costing?$$Facility Level$153,60051,200 unitsc. What price will be quoted if the product is priced at 25% above cost? Compute the price per unit under both the direct labor hoursapproach and under activity-based costing. The direct manufacturing costs consist of direct material of $22 and direct labor of $32.Note: Do not round your intermediate calculations. Round your answers to 2 decimal places.20,00015,040

Overheads: The indirect cost required to manufacture the goods and services is recorded as the…

TB Problem 5-163 (Algo) Roadmaster Tires produces a variety... Roadmaster Tires produces a variety of auto and truck tires at its Indianapolis manufacturing plant. The plant is highly automated and uses an activity-based costing system to allocate overhead costs to its various product lines. The costs and cost drivers associated with four activity cost pools are given below: Activities: Cost Cost Driver Unit Level 588,400 5,200 labor hours Batch Level $66,000 220 setups Product Level $30,000 of use Production of 1,000 units of a small tractor tire required 320 labor hours and two setups and consumed 20% of the product sustaining activities. a Overhead allocated using company-wide allocation base b. Overhead allocated under activity-based coating Facility Level $153,600 51,200 units Required: a. Instead of using ABC, suppose the company had used labor hours as a company-wide allocation base. How much total overhead would have been allocated to the tractor tire? b. How much total overhead cost will be allocated to the tire under activity-based costing? 20.800 c. What price will be quoted if the product is priced at 25% above cost? Compute the price per unit under both the direct labor hours approach and under activity-based costing. The direct manufacturing costs consist of direct material of $22 and direct labor of $32. Note: Do not round your intermediate calculations. Round your answers to 2 decimal places.

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter4: Job-order Costing And Overhead Application

Section: Chapter Questions

Problem 34BEB: Use the following information for Brief Exercises 4-34 and 4-35: Sanjay Company manufactures a...