Alpha Technology produces two products: a high-end laptop under the label Excellent Laptops and an inexpensive desktop under the label Outstanding Computers. The two products use two overhead activities, with the following costs: Setting up equipment $3,000 Machining $15,000 The controller has collected the expected annual prime costs for each product, the machine hours, the setup hours, and the expected production. Excellent Laptops Outstanding Computers Direct labor $25,000 $10,000 Direct materials $20,000 $5,000 Expected production in units 3,000 3,000 Machine hours 850 2,000 Setup hours 80 75 Calculate the overhead cost per unit for Excellent Laptops using a plantwide rate based on direct labor costs. (Note: Round the overhead rateto two decimal places; round the final answer to two decimal places.)
Alpha Technology produces two products: a high-end laptop under the label Excellent Laptops and an inexpensive desktop under the label Outstanding Computers. The two products use two overhead activities, with the following costs: Setting up equipment $3,000 Machining $15,000 The controller has collected the expected annual prime costs for each product, the machine hours, the setup hours, and the expected production. Excellent Laptops Outstanding Computers Direct labor $25,000 $10,000 Direct materials $20,000 $5,000 Expected production in units 3,000 3,000 Machine hours 850 2,000 Setup hours 80 75 Calculate the overhead cost per unit for Excellent Laptops using a plantwide rate based on direct labor costs. (Note: Round the overhead rateto two decimal places; round the final answer to two decimal places.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Alpha Technology produces two products: a high-end laptop under the label Excellent Laptops and an inexpensive desktop under the label Outstanding Computers. The two products use two overhead activities, with the following costs:
|
Setting up equipment |
$3,000 |
|
Machining |
$15,000 |
The controller has collected the expected annual prime costs for each product, the machine hours, the setup hours, and the expected production.
|
|
Excellent Laptops |
Outstanding Computers |
|
Direct labor |
$25,000 |
$10,000 |
|
Direct materials |
$20,000 |
$5,000 |
|
Expected production in units |
3,000 |
3,000 |
|
Machine hours |
850 |
2,000 |
|
Setup hours |
80 |
75 |
Calculate the overhead cost per unit for Excellent Laptops using a plantwide rate based on direct labor costs. (Note: Round the overhead rateto two decimal places; round the final answer to two decimal places.)
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