2. The company is considering replacing its traditional costing system for determining unit product costs for external reports with an ABC system. The ABC system would have the following three activity cost pools: Expected Activity Estimated Activities and Activity Measures Supporting direct labour (direct labour-hours) Drawing software modifications (changes) Quality review and technical checks (tests) Overhead Cost Commercial Residential Total 35, 000 $840, 000 5, 600 29, 400 84, 000 14, 000 140 35 175 112 28 140 Total service department overhead cost $938, 000 Determine the unit costs (cost per square metre of architectural drawings) of the Commercial and Residential lines of business under the ABC system. (Round your answers to 2 decimal places.) Commercial Residential Unit cost
2. The company is considering replacing its traditional costing system for determining unit product costs for external reports with an ABC system. The ABC system would have the following three activity cost pools: Expected Activity Estimated Activities and Activity Measures Supporting direct labour (direct labour-hours) Drawing software modifications (changes) Quality review and technical checks (tests) Overhead Cost Commercial Residential Total 35, 000 $840, 000 5, 600 29, 400 84, 000 14, 000 140 35 175 112 28 140 Total service department overhead cost $938, 000 Determine the unit costs (cost per square metre of architectural drawings) of the Commercial and Residential lines of business under the ABC system. (Round your answers to 2 decimal places.) Commercial Residential Unit cost
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
please solve question 2), thanks
Transcribed Image Text:2. The company is considering replacing its traditional costing system for determining unit product costs for external reports with an
ABC system. The ABC system would have the following three activity cost pools:
Expected Activity
Estimated
Activities and Activity Measures
Supporting direct labour (direct labour-hours)
Drawing software modifications (changes)
Quality review and technical checks (tests)
Overhead Cost
$840, 000
84, 000
14, 000
Commercial
Residential
Total
5, 600
140
35, 000
175
29, 400
35
112
28
140
Total service department overhead cost
$938, 000
Determine the unit costs (cost per square metre of architectural drawings) of the Commercial and Residential lines of business under
the ABC system. (Round your answers to 2 decimal places.)
Commercial
Residential
Unit cost
![Problem 7A-1 Activity-Based Costing Product Costs for External Reports [LO6]
Data concerning Cranur Architects Corporation's two major business lines are given below:
Commercial
$ 8.00
Residential
$
Direct materials per square metre
Direct labour per square metre
Direct labour-hours per square metre
5. 60
$ 37. 50
0. 075 DLHS
392, 000 m2
50
0.1 DLHS
56, 000 m2
Estimated annual output
The company has a traditional costing system in which architecture department overhead is applied to units (square metres of
architectural drawings) based on direct labour-hours. Data concerning architecture department overhead and direct labour-hours for
the upcoming year appear below:
$938, 000
Estimated total architecture department overhead
Estimated total direct labour-hours
35, 000 DLHS](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F517c093b-3e51-490c-a74b-f2bff995cd4c%2F568adf34-df31-4b13-b2e5-da09dd733806%2F50fas2_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 7A-1 Activity-Based Costing Product Costs for External Reports [LO6]
Data concerning Cranur Architects Corporation's two major business lines are given below:
Commercial
$ 8.00
Residential
$
Direct materials per square metre
Direct labour per square metre
Direct labour-hours per square metre
5. 60
$ 37. 50
0. 075 DLHS
392, 000 m2
50
0.1 DLHS
56, 000 m2
Estimated annual output
The company has a traditional costing system in which architecture department overhead is applied to units (square metres of
architectural drawings) based on direct labour-hours. Data concerning architecture department overhead and direct labour-hours for
the upcoming year appear below:
$938, 000
Estimated total architecture department overhead
Estimated total direct labour-hours
35, 000 DLHS
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 3 images
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education