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activity-based costing system.

activity-based costing 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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Vanderbilt Metal Works produces two types of metal lamps. Vanderbilt manufactures 24.640 basic lamps and 6,250 designer lamps. Its activity-based costing system uses two indirect-cost pools. One cost pool is for setup costs and the other for general manufacturing overhead. Vanderbilt allocates setup costs to the two lamps based on setup labor-hours and general manufacturing overhead costs on the basis of direct manu- facturing labor-hours. It provides the following budgeted cost information: 5-2 Designer Lamps Total Basic Lamps $ 5 $19 Direct materials per lamp Direct manufacturing labor-hours per lamp Direct manufacturing labor rate per hour Setup costs Lamps produced per batch Setup-hours per batch General manufacturing overhead costs 0.4 hours 0.5 hours $30 $30 $130,800 320 50 1 hour 2 hours $ 89,877 Calculate the total budgeted costs of the basic and designer lamps using Vanderbilt's activity-based costing system.
Transcribed Image Text:Vanderbilt Metal Works produces two types of metal lamps. Vanderbilt manufactures 24.640 basic lamps and 6,250 designer lamps. Its activity-based costing system uses two indirect-cost pools. One cost pool is for setup costs and the other for general manufacturing overhead. Vanderbilt allocates setup costs to the two lamps based on setup labor-hours and general manufacturing overhead costs on the basis of direct manu- facturing labor-hours. It provides the following budgeted cost information: 5-2 Designer Lamps Total Basic Lamps $ 5 $19 Direct materials per lamp Direct manufacturing labor-hours per lamp Direct manufacturing labor rate per hour Setup costs Lamps produced per batch Setup-hours per batch General manufacturing overhead costs 0.4 hours 0.5 hours $30 $30 $130,800 320 50 1 hour 2 hours $ 89,877 Calculate the total budgeted costs of the basic and designer lamps using Vanderbilt's activity-based costing system.
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