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a. Calculate the total manufacturing costs and the cost per unit produced and "Cost per unit" to 2 decimal places.) Total manufacturing cost Cost per unit produced and tested b. Which of the following are the advantages of the ABC approach relative to using a single predetermined overhead application rate based on direct labor hours. (Note: You do not have alternative method.) (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) calculate the overhead that would be applied for the month of August using this ABC does not help in decision-making. 2 ABC systems produce more accurate financial information. 2 ABC approach is likely to provide better information to manufacturing managers. 2 ABC helps in decision-making. 2 ABC systems produce more accurate product costing information.

a. Calculate the total manufacturing costs and the cost per unit produced and "Cost per unit" to 2 decimal places.) Total manufacturing cost Cost per unit produced and tested b. Which of the following are the advantages of the ABC approach relative to using a single predetermined overhead application rate based on direct labor hours. (Note: You do not have alternative method.) (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) calculate the overhead that would be applied for the month of August using this ABC does not help in decision-making. 2 ABC systems produce more accurate financial information. 2 ABC approach is likely to provide better information to manufacturing managers. 2 ABC helps in decision-making. 2 ABC systems produce more accurate product costing information.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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MedTech Inc. manufactures and sells diagnostic equipment used in the medical profession. Its job costing system was designed using an activity-based costing approach. Direct materials and direct labor costs are accumulated separately, along with information concerning four manufacturing overhead cost drivers (activities). Assume that the direct labor rate is $23 per hour and that there were no beginning inventories. The following information was available for 2019, based on an expected production level of 355,556 units for the year: Cost Driver Used as Cost Allocation Budgeted Costs for 2019 Activity Cost Rate Allocation Base Driver ok $2.00 per part 12.00 per hour 5.25 per hour 4.50 per unit Number of parts used Materials handling Milling and grinding Assembly and inspection Testing $4,800,000 8,000,000 5,800,000 1,600,000 Number of machine hours nt Direct labor hours worked Number of units tested ences The following production, costs, and activities occurred during the month of August: Direct Number of Parts Machine Direct Labor Units Materials Costs Used Hours Hours Produced/Tested 53,000 $3,000,000 290,000 91,000 180,000 Required: a. Calculate the total manufacturing costs and the cost per unit produced and tested during the month of August for MedTech. (Round "Cost per unit" to 2 decimal places.) Total manufacturing cost Cost per unit produced and tested
Transcribed Image Text:MedTech Inc. manufactures and sells diagnostic equipment used in the medical profession. Its job costing system was designed using an activity-based costing approach. Direct materials and direct labor costs are accumulated separately, along with information concerning four manufacturing overhead cost drivers (activities). Assume that the direct labor rate is $23 per hour and that there were no beginning inventories. The following information was available for 2019, based on an expected production level of 355,556 units for the year: Cost Driver Used as Cost Allocation Budgeted Costs for 2019 Activity Cost Rate Allocation Base Driver ok $2.00 per part 12.00 per hour 5.25 per hour 4.50 per unit Number of parts used Materials handling Milling and grinding Assembly and inspection Testing $4,800,000 8,000,000 5,800,000 1,600,000 Number of machine hours nt Direct labor hours worked Number of units tested ences The following production, costs, and activities occurred during the month of August: Direct Number of Parts Machine Direct Labor Units Materials Costs Used Hours Hours Produced/Tested 53,000 $3,000,000 290,000 91,000 180,000 Required: a. Calculate the total manufacturing costs and the cost per unit produced and tested during the month of August for MedTech. (Round "Cost per unit" to 2 decimal places.) Total manufacturing cost Cost per unit produced and tested
Required: a. Calculate the total manufacturing costs and the cost per unit produced and tested during the month of August for MedTech. (Round "Cost per unit" to 2 decimal places.) Total manufacturing cost Cost per unit produced and tested b. Which of the following are the advantages of the ABC approach relative to using a single predetermined overhead application rate based on direct labor hours. (Note: You do not have to calculate the overhead that would be applied for the month of August using this alternative method.) (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) ABC does not help in decision-making. ABC systems produce more accurate financial information. 2 ABC approach is likely to provide better information to manufacturing managers. 2 ABC helps in decision-making. 2 ABC systems produce more accurate product costing information.
Transcribed Image Text:Required: a. Calculate the total manufacturing costs and the cost per unit produced and tested during the month of August for MedTech. (Round "Cost per unit" to 2 decimal places.) Total manufacturing cost Cost per unit produced and tested b. Which of the following are the advantages of the ABC approach relative to using a single predetermined overhead application rate based on direct labor hours. (Note: You do not have to calculate the overhead that would be applied for the month of August using this alternative method.) (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) ABC does not help in decision-making. ABC systems produce more accurate financial information. 2 ABC approach is likely to provide better information to manufacturing managers. 2 ABC helps in decision-making. 2 ABC systems produce more accurate product costing information.
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