a. Compute the individual product costs per unit assuming that Redfern Audio uses the number of units to allocate overhead to the products. b. Compute the individual product costs per unit assuming that Redfern Audio uses direct labor hours to allocate overhead to the products. c. Compute the individual product costs per unit assuming that Redfern Audio uses machine hours to allocate overhead to the products.
a. Compute the individual product costs per unit assuming that Redfern Audio uses the number of units to allocate overhead to the products. b. Compute the individual product costs per unit assuming that Redfern Audio uses direct labor hours to allocate overhead to the products. c. Compute the individual product costs per unit assuming that Redfern Audio uses machine hours to allocate overhead to the products.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
aj.3
Transcribed Image Text:Redfern Audio produces audio equipment including headphones. At the Campus Facility, it produces two
wireless models, Standard and Enhanced, which differ both in the materials and components used and in the
labor skill required. Data for the Campus Plant for the third quarter follow.
Units produced
Machine-hours
Direct labor-hours
Direct materials costs
Direct labor costs
Manufacturing overhead
Total costs
Standard
24,000
14,400
18,000
$ 480,000
288,000
Enhanced
8,000
9,600
18,000
$ 720,000
612,000
Total
32,000
24,000
36,000
$ 1,200,000
900,000
864,000
$ 2,964,000
Required:
a. Compute the individual product costs per unit assuming that Redfern Audio uses the number of units to
allocate overhead to the products.
b. Compute the individual product costs per unit assuming that Redfern Audio uses direct labor hours to
allocate overhead to the products.
c. Compute the individual product costs per unit assuming that Redfern Audio uses machine hours to allocate
overhead to the products.
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