a-1. Compute the predetermined overhead rate under the current method. (Round your answer to 2 decimal places.) Predetermined overhead rate per DLH a-2. Determine the unit product cost of each product for the current year. (Round your intermediate calculations and final answers to 2 decimal places.)
a-1. Compute the predetermined overhead rate under the current method. (Round your answer to 2 decimal places.) Predetermined overhead rate per DLH a-2. Determine the unit product cost of each product for the current year. (Round your intermediate calculations and final answers to 2 decimal places.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:b. The company is considering using an activity-based costing system to compute unit product costs for external financial reports
instead of its traditional system based on direct labor-hours. The activity-based costing system would use three activity cost pools.
Data relating to these activities for the current period are given below:
Activity Cost Pools
Machine setups
Purchase orders
Order size
Total
Unit product cost
Estimated Overhead
Costs
$ 12,990
77,640
95,280
$185,910
Product C
Product C
190
980
8,400
Product D
Expected Activity
Product D
200
1,320
7,140
Determine the unit product cost of each product for the current period using the activity-based costing approach. (Round your
intermediate calculations and final answers to 2 decimal places.)
Total
390
2,300
15,540

Transcribed Image Text:Cabio Company manufactures two products, Product C and Product D. The company estimated it would incur $185,910 in
manufacturing overhead costs during the current period. Overhead currently is applied to the products on the basis of direct labor-
hours. Data concerning the current period's operations appear below:
Estimated volume
Direct labor-hours per unit
Direct materials cost per unit
Direct labor cost per unit.
Unit product cost
per DLH
Product C
Product C
4,200 units
2.00 hours
Required:
a-1. Compute the predetermined overhead rate under the current method. (Round your answer to 2 decimal places.)
Predetermined overhead rate
$15.60
$ 20.00
Product D
Product D
3,400 units
2.10 hours
a-2. Determine the unit product cost of each product for the current year. (Round your intermediate calculations and final answers to
2 decimal places.)
$ 28.50
$ 21.00
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