Akos Inc. produces phones. One of its plants produces two versions of phones: a basic model and a premium model. At the beginning of this year, the following data were prepared for the plant: Basic Premium Model Model 20,000 10,000 $90 $200 $300,000 $300,000 2,500 500 4,000 28 Expected Quantity Selling Price Per Unit Total Prime Costs Machine Hours Number of requisitions Maintenance hours Number of setups 2,500 1,500 6,000 32

Akos Inc. produces phones. One of its plants produces two versions of phones: a basic model and a premium model. At the beginning of this year, the following data were prepared for the plant: Basic Premium Model Model 20,000 10,000 $90 $200 $300,000 $300,000 2,500 500 4,000 28 Expected Quantity Selling Price Per Unit Total Prime Costs Machine Hours Number of requisitions Maintenance hours Number of setups 2,500 1,500 6,000 32

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Question

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Akos Inc. produces phones. One of its plants produces two versions of phones: a basic model and a premium model.
At the beginning of this year, the following data were prepared for the plant:
Basic
Premium
Model
20,000
$90
$300,000
2,500
500
4,000
28
Expected Quantity
Selling Price Per Unit
Total Prime Costs
Machine Hours
Number of requisitions
Maintenance hours
Number of setups
Additionally, the following overhead activity costs are reported:
Maintaining equipment
Setting up equipment
Purchasing materials
Total
a)
b)
$220,000
$120,000
$90,000
$430,000
What is the total cost of the basic & premium model using activity-based costing?
Unit cost
Model
10,000
$200
$300,000
2,500
1,500
6,000
32
Basic
$466,500
What is the unit cost of the basic & deluxe model using Plantwide overhead rate
based on machine hours?
Basic
$25.75
Premium
$563,500
Premium
$51.50

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Step 4: (b) Determine the unit cost of the basic & deluxe model using Plantwide overhead rate:

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