1. Lazuli Incorporated manufactures two models of cameras that can be used as cell phones, MPX, and digital camcorders. Model Annual Sales in Units High F 12,000 Great P 17,000 Lazuli uses a volume-based costing system to apply factory overhead based on direct labor dollars. The unit prime costs of each product were as follows: High F Great P Direct materials $ 40.00 $ 27.40 Direct labor $ 19.60 $ 15.20 Budget factory overhead: Engineering and Design 2,800 engineering hours $ 420,000 Quality Control 13,230 inspection hours 326,000 Machinery 34,110 machine hours 610,560 Miscellaneous Overhead 26,790 direct labor hours 133,000 Total $ 1,489,560 Lazuli's controller had been researching activity-based costing and decided to switch to it. A special study determined Lazuli's two products have the following budgeted activities: High F Great P Engineering and design hours 1,160 1,640 Quality control inspection hours 5,840 7,390 Machine hours 20,480 13,630 Labor hours 12,200 14,590 Using activity-based costing, applied machinery overhead for the Great P model per unit is: Note: Rounded to the nearest cent. 2. Lazuli Incorporated manufactures two models of cameras that can be used as cell phones, MPX, and digital camcorders. Model Annual Sales in Units High F 10,600 Great P 16,600 Lazuli uses a volume-based costing system to apply factory overhead based on direct labor dollars. The unit prime costs of each product were as follows: High F Great P Direct materials $ 38.60 $ 26.00 Direct labor $ 18.20 $ 13.80 Budget factory overhead: Engineering and Design 2,520 engineering hours $ 403,200 Quality Control 12,950 inspection hours 296,700 Machinery 33,830 machine hours 506,700 Miscellaneous Overhead 26,510 direct labor hours 132,300 Total $ 1,338,900 Lazuli's controller had been researching activity-based costing and decided to switch to it. A special study determined Lazuli's two products have the following budgeted activities: High F Great P Engineering and design hours 1,020 1,500 Quality control inspection hours 5,700 7,250 Machine hours 20,340 13,490 Labor hours 12,060 14,450 Using activity-based costing, applied engineering and design factory overhead for the High F model per unit is: Note: Rounded to the nearest cent.

1. Lazuli Incorporated manufactures two models of cameras that can be used as cell phones, MPX, and digital camcorders. Model Annual Sales in Units High F 12,000 Great P 17,000 Lazuli uses a volume-based costing system to apply factory overhead based on direct labor dollars. The unit prime costs of each product were as follows: High F Great P Direct materials $ 40.00 $ 27.40 Direct labor $ 19.60 $ 15.20 Budget factory overhead: Engineering and Design 2,800 engineering hours $ 420,000 Quality Control 13,230 inspection hours 326,000 Machinery 34,110 machine hours 610,560 Miscellaneous Overhead 26,790 direct labor hours 133,000 Total $ 1,489,560 Lazuli's controller had been researching activity-based costing and decided to switch to it. A special study determined Lazuli's two products have the following budgeted activities: High F Great P Engineering and design hours 1,160 1,640 Quality control inspection hours 5,840 7,390 Machine hours 20,480 13,630 Labor hours 12,200 14,590 Using activity-based costing, applied machinery overhead for the Great P model per unit is: Note: Rounded to the nearest cent. 2. Lazuli Incorporated manufactures two models of cameras that can be used as cell phones, MPX, and digital camcorders. Model Annual Sales in Units High F 10,600 Great P 16,600 Lazuli uses a volume-based costing system to apply factory overhead based on direct labor dollars. The unit prime costs of each product were as follows: High F Great P Direct materials $ 38.60 $ 26.00 Direct labor $ 18.20 $ 13.80 Budget factory overhead: Engineering and Design 2,520 engineering hours $ 403,200 Quality Control 12,950 inspection hours 296,700 Machinery 33,830 machine hours 506,700 Miscellaneous Overhead 26,510 direct labor hours 132,300 Total $ 1,338,900 Lazuli's controller had been researching activity-based costing and decided to switch to it. A special study determined Lazuli's two products have the following budgeted activities: High F Great P Engineering and design hours 1,020 1,500 Quality control inspection hours 5,700 7,250 Machine hours 20,340 13,490 Labor hours 12,060 14,450 Using activity-based costing, applied engineering and design factory overhead for the High F model per unit is: Note: Rounded to the nearest cent.

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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Lazuli Incorporated manufactures two models of cameras that can be used as cell phones, MPX, and digital camcorders.

Model	Annual Sales in Units
High F	12,000
Great P	17,000

Lazuli uses a volume-based costing system to apply factory overhead based on direct labor dollars. The unit prime costs of each product were as follows:

	High F	Great P
Direct materials	$ 40.00	$ 27.40
Direct labor	$ 19.60	$ 15.20

Budget factory overhead:
Engineering and Design	2,800	engineering hours	$ 420,000
Quality Control	13,230	inspection hours	326,000
Machinery	34,110	machine hours	610,560
Miscellaneous Overhead	26,790	direct labor hours	133,000
Total			$ 1,489,560

Lazuli's controller had been researching activity-based costing and decided to switch to it. A special study determined Lazuli's two products have the following budgeted activities:

	High F	Great P
Engineering and design hours	1,160	1,640
Quality control inspection hours	5,840	7,390
Machine hours	20,480	13,630
Labor hours	12,200	14,590

Using activity-based costing, applied machinery overhead for the Great P model per unit is:

Note: Rounded to the nearest cent.

2. Lazuli Incorporated manufactures two models of cameras that can be used as cell phones, MPX, and digital camcorders.

Model	Annual Sales in Units
High F	10,600
Great P	16,600

Lazuli uses a volume-based costing system to apply factory overhead based on direct labor dollars. The unit prime costs of each product were as follows:

	High F	Great P
Direct materials	$ 38.60	$ 26.00
Direct labor	$ 18.20	$ 13.80

Budget factory overhead:
Engineering and Design	2,520	engineering hours	$ 403,200
Quality Control	12,950	inspection hours	296,700
Machinery	33,830	machine hours	506,700
Miscellaneous Overhead	26,510	direct labor hours	132,300
Total			$ 1,338,900

Lazuli's controller had been researching activity-based costing and decided to switch to it. A special study determined Lazuli's two products have the following budgeted activities:

	High F	Great P
Engineering and design hours	1,020	1,500
Quality control inspection hours	5,700	7,250
Machine hours	20,340	13,490
Labor hours	12,060	14,450

Using activity-based costing, applied engineering and design factory overhead for the High F model per unit is:

Note: Rounded to the nearest cent.

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