ABC system. For the coming period, the company is planning to use 5,000 direct labor hours, and its total budgeted factory overhead amounts to P90,000, broken down as follows: Activity Setup costs Production monitoring Cost Driver Number of set ups Budgeted Activity Budgeted Cost P20,000 P40,000 40 Number of batches 20 Quality control Number of inspections 1,000 P30,000 Projected data for one of the Company's product, Product B, for the coming period are as follows: Production and sales 1,000 units Number of inspections 200 Direct labor hours 2,000 hours Direct material cost P10 per unit Units per batch Number of setups 500 Direct labor rate P20 per hour 4 1. If the Company will use the traditional full cost system, the cost per unit of product B for the coming period will be 2. If the Company will use the ABC system, the cost per unit of product B for the coming year will be

ABC system. For the coming period, the company is planning to use 5,000 direct labor hours, and its total budgeted factory overhead amounts to P90,000, broken down as follows: Activity Setup costs Production monitoring Cost Driver Number of set ups Budgeted Activity Budgeted Cost P20,000 P40,000 40 Number of batches 20 Quality control Number of inspections 1,000 P30,000 Projected data for one of the Company's product, Product B, for the coming period are as follows: Production and sales 1,000 units Number of inspections 200 Direct labor hours 2,000 hours Direct material cost P10 per unit Units per batch Number of setups 500 Direct labor rate P20 per hour 4 1. If the Company will use the traditional full cost system, the cost per unit of product B for the coming period will be 2. If the Company will use the ABC system, the cost per unit of product B for the coming year will be

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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Production, Direct Labor, Direct Materials, Sales Budgets, Budgeted Contribution Margin Greiner Company makes and sells high-quality glare filters for microcomputer monitors. John Craven, controller, is responsible for preparing Greiner's master budget and has assembled the following data for the coming year. The direct labor rate includes wages, all employee-related benefits, and the employer's share of FICA. Labor saving machinery will be fully operational by March. Also, as of March 1, the company's union contract calls for an increase in direct labor wages that is included in the direct labor rate. Greiner expects to have 6,600 glare filters in inventory on December 31 of the current year, and has a policy of carrying 35 percent of the following month's projected sales in inventory. Information on the first four months of the coming year is as follows: January February March April Estimated unit sales 37,200 35,400 40,000 40,000 Sales price per unit $80 $80 $75 $75 Direct labor…
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