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a. Compute the estimated per unit product costs for the next fiscal year, based on the current cost accounting system.

a. Compute the estimated per unit product costs for the next fiscal year, based on the current cost accounting system.

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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Required: a. Compute the estimated per unit product costs for the next fiscal year, based on the current cost accounting system. b. An analyst on the planning process team suggests that a two-stage system would improve the estimated product costs. The analyst suggests that overhead be first assigned to on one of two cost pools: Machine related and labor related. Machine-related overhead consists of the accounts "Engineering" and "Machine operation and maintenance." Labor-related overhead consists of the remaining manufacturing overhead. Machine-related costs would be allocated based on machine-hours. Labor-related overhead would be allocated based on direct labor cost. Compute the estimated per unit product costs for the next fiscal year, based on the system proposed by the analyst. Complete this question by entering your answers in the tabs below. Required A Required B Compute the estimated per unit product costs for the next fiscal year, based on the current cost accounting system. Product cost per unit Standard Ultra < Required A Required B >
Transcribed Image Text:Required: a. Compute the estimated per unit product costs for the next fiscal year, based on the current cost accounting system. b. An analyst on the planning process team suggests that a two-stage system would improve the estimated product costs. The analyst suggests that overhead be first assigned to on one of two cost pools: Machine related and labor related. Machine-related overhead consists of the accounts "Engineering" and "Machine operation and maintenance." Labor-related overhead consists of the remaining manufacturing overhead. Machine-related costs would be allocated based on machine-hours. Labor-related overhead would be allocated based on direct labor cost. Compute the estimated per unit product costs for the next fiscal year, based on the system proposed by the analyst. Complete this question by entering your answers in the tabs below. Required A Required B Compute the estimated per unit product costs for the next fiscal year, based on the current cost accounting system. Product cost per unit Standard Ultra < Required A Required B >
Hall, Incorporated manufactures two components, Standard and Ultra, that are designed for the same function, but are made of different metals for operational performance reasons. The metal used in Standard is easy to work with and there are few quality issues or reworking required on the machines. The metal used in Ultra is more difficult to work with and often needs additional machine time and rework. Data on expected operations and direct costs for the next fiscal year follow: Units produced Direct labor-hours used Machine-hours used Direct materials costs Direct labor costs Account Administration Engineering Machine operation and maintenance Miscellaneous Supervision Total Standard 41,000 123,000 20,500 Required: Ultra 13,000 22,500 22,500 $ 3,097,000 2,520,000 $ 3,700,000 855,000 The planning process team at Hall, Incorporated has estimated the following manufacturing overhead costs for the next fiscal year: Total Amount $ 825,400 3,603,000 840,000 540, 100 884,500 $ 6,693,000 54,000 145,500 43,000 $ 6,797,000 3,375,000 The cost accounting system at Hall, Incorporated calculates product costs by adding allocated overhead to the direct costs of the product. Overhead costs are allocated based on direct labor-hours. a. Compute the estimated per unit product costs for the next fiscal year, based on the current cost accounting system. b. An analyst on the planning process team suggests that a two-stage system would improve the estimated product costs. The analyst suggests that overhead be first assigned to on one of two cost pools Machine related and labor related Machine-related overhead
Transcribed Image Text:Hall, Incorporated manufactures two components, Standard and Ultra, that are designed for the same function, but are made of different metals for operational performance reasons. The metal used in Standard is easy to work with and there are few quality issues or reworking required on the machines. The metal used in Ultra is more difficult to work with and often needs additional machine time and rework. Data on expected operations and direct costs for the next fiscal year follow: Units produced Direct labor-hours used Machine-hours used Direct materials costs Direct labor costs Account Administration Engineering Machine operation and maintenance Miscellaneous Supervision Total Standard 41,000 123,000 20,500 Required: Ultra 13,000 22,500 22,500 $ 3,097,000 2,520,000 $ 3,700,000 855,000 The planning process team at Hall, Incorporated has estimated the following manufacturing overhead costs for the next fiscal year: Total Amount $ 825,400 3,603,000 840,000 540, 100 884,500 $ 6,693,000 54,000 145,500 43,000 $ 6,797,000 3,375,000 The cost accounting system at Hall, Incorporated calculates product costs by adding allocated overhead to the direct costs of the product. Overhead costs are allocated based on direct labor-hours. a. Compute the estimated per unit product costs for the next fiscal year, based on the current cost accounting system. b. An analyst on the planning process team suggests that a two-stage system would improve the estimated product costs. The analyst suggests that overhead be first assigned to on one of two cost pools Machine related and labor related Machine-related overhead
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