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Bunker makes two types of briefcases, fabric and leather. The company is currently using a traditional costing system with labor hours as the cost driver but is considering switching to an activity-based costing system. In preparation for the possible switch, Bunker has identified two activity pools: materials handling and setup. Pertinent data follow: Number of labor hours Number of material moves Number of setups Fabric Case 15,000 440 40 Required 1 Leather Case 9,000 Total estimated overhead costs are $150,000, of which $110,000 is assigned to the materials handling pool and $40,000 is assigned to the setup pool. Required 2 660 Required: 1. Calculate the overhead assigned to the fabric case using the traditional costing system based on labor hours. 2. Calculate the overhead assigned to the fabric case using ABC. 3. Was the fabric case over- or undercosted by the traditional cost system compared to ABC? Required 3 80 Complete this question by entering your answers in the tabs below.

Bunker makes two types of briefcases, fabric and leather. The company is currently using a traditional costing system with labor hours as the cost driver but is considering switching to an activity-based costing system. In preparation for the possible switch, Bunker has identified two activity pools: materials handling and setup. Pertinent data follow: Number of labor hours Number of material moves Number of setups Fabric Case 15,000 440 40 Required 1 Leather Case 9,000 Total estimated overhead costs are $150,000, of which $110,000 is assigned to the materials handling pool and $40,000 is assigned to the setup pool. Required 2 660 Required: 1. Calculate the overhead assigned to the fabric case using the traditional costing system based on labor hours. 2. Calculate the overhead assigned to the fabric case using ABC. 3. Was the fabric case over- or undercosted by the traditional cost system compared to ABC? Required 3 80 Complete this question by entering your answers in the tabs below.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Bunker makes two types of briefcases, fabric and leather. The company is currently using a traditional costing system with labor hours as the cost driver but is considering switching to an activity-based costing system. In preparation for the possible switch, Bunker has identified two activity pools: materials handling and setup. Pertinent data follow: Number of labor hours Number of material moves Number of setups Fabric Case 15,000 440 40 Leather Case 9,000 660 80 Total estimated overhead costs are $150,000, of which $110,000 is assigned to the materials handling pool and $40,000 is assigned to the setup pool. Required: 1. Calculate the overhead assigned to the fabric case using the traditional costing system based on labor hours. 2. Calculate the overhead assigned to the fabric case using ABC. 3. Was the fabric case over- or undercosted by the traditional cost system compared to ABC? Complete this question by entering your answers in the tabs below. < Required 1 Required 1 Required 2 Required 3 Calculate the overhead assigned to the fabric case using ABC. Note: Round activity rates or activity proportions and intermediate calculations to four decimal places. Round your final answer to 2 decimal places. Overhead Assigned Required 3 >
Transcribed Image Text:Bunker makes two types of briefcases, fabric and leather. The company is currently using a traditional costing system with labor hours as the cost driver but is considering switching to an activity-based costing system. In preparation for the possible switch, Bunker has identified two activity pools: materials handling and setup. Pertinent data follow: Number of labor hours Number of material moves Number of setups Fabric Case 15,000 440 40 Leather Case 9,000 660 80 Total estimated overhead costs are $150,000, of which $110,000 is assigned to the materials handling pool and $40,000 is assigned to the setup pool. Required: 1. Calculate the overhead assigned to the fabric case using the traditional costing system based on labor hours. 2. Calculate the overhead assigned to the fabric case using ABC. 3. Was the fabric case over- or undercosted by the traditional cost system compared to ABC? Complete this question by entering your answers in the tabs below. < Required 1 Required 1 Required 2 Required 3 Calculate the overhead assigned to the fabric case using ABC. Note: Round activity rates or activity proportions and intermediate calculations to four decimal places. Round your final answer to 2 decimal places. Overhead Assigned Required 3 >
Required information Bunker makes two types of briefcases, fabric and leather. The company is currently using a traditional costing system with labor hours as the cost driver but is considering switching to an activity-based costing system. In preparation for the possible switch, Bunker has identified two activity pools: materials handling and setup. Pertinent data follow; Number of labor hours Number of material noves Number of setups Total estimated overhead costs are $150,000, of which $110,000 is assigned to the materials handling pool and $40,000 is assigned to the setup pool. Fabric Case 15,000 440 40 Required: 1. Calculate the overhead assigned to the fabric case using the traditional costing system based on labor hours. 2. Calculate the overhead assigned to the fabric case using ABC. 3. Was the fabric case over- or undercosted by the traditional cost system compared to ABC? Overhead Assigned Complete this question by entering your answers in the tabs below. Show Transcribed Text Leather Case 9,000 660 Required 1 Required 2 Required 3 Calculate the overhead assigned to the fabric case using the traditional costing system based on labor hours. Note: Do not round intermediate calculations and round your final answer to the nearest whole dollar amount.) Number of labor hours Number of material moves Number of setups 80 <Required Required information Bunker makes two types of briefcases, fabric and leather. The company is currently using a traditional costing system with labor hours as the cost driver but is considering switching to an activity-based costing system. In preparation for the possible switch, Bunker has identified two activity pools: materials handling and setup. Pertinent data follow: Fabric Case 15,000 440 40 Fabric Case Required 2 > c Leather Case 9,000 660 80 Total estimated overhead costs are $150,000, of which $110,000 is assigned to the materials handling pool and $40,000 is assigned to the setup pool. Required: 1. Calculate the overhead assigned to the fabric case using the traditional costing system based on labor hours. 2. Calculate the overhead assigned to the fabric case using ABC. 3. Was the fabric case over- or undercosted by the traditional cost system compared to ABC? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Was the fabric case over- or undercosted by the traditional cost system compared to ABC?
Transcribed Image Text:Required information Bunker makes two types of briefcases, fabric and leather. The company is currently using a traditional costing system with labor hours as the cost driver but is considering switching to an activity-based costing system. In preparation for the possible switch, Bunker has identified two activity pools: materials handling and setup. Pertinent data follow; Number of labor hours Number of material noves Number of setups Total estimated overhead costs are $150,000, of which $110,000 is assigned to the materials handling pool and $40,000 is assigned to the setup pool. Fabric Case 15,000 440 40 Required: 1. Calculate the overhead assigned to the fabric case using the traditional costing system based on labor hours. 2. Calculate the overhead assigned to the fabric case using ABC. 3. Was the fabric case over- or undercosted by the traditional cost system compared to ABC? Overhead Assigned Complete this question by entering your answers in the tabs below. Show Transcribed Text Leather Case 9,000 660 Required 1 Required 2 Required 3 Calculate the overhead assigned to the fabric case using the traditional costing system based on labor hours. Note: Do not round intermediate calculations and round your final answer to the nearest whole dollar amount.) Number of labor hours Number of material moves Number of setups 80 <Required Required information Bunker makes two types of briefcases, fabric and leather. The company is currently using a traditional costing system with labor hours as the cost driver but is considering switching to an activity-based costing system. In preparation for the possible switch, Bunker has identified two activity pools: materials handling and setup. Pertinent data follow: Fabric Case 15,000 440 40 Fabric Case Required 2 > c Leather Case 9,000 660 80 Total estimated overhead costs are $150,000, of which $110,000 is assigned to the materials handling pool and $40,000 is assigned to the setup pool. Required: 1. Calculate the overhead assigned to the fabric case using the traditional costing system based on labor hours. 2. Calculate the overhead assigned to the fabric case using ABC. 3. Was the fabric case over- or undercosted by the traditional cost system compared to ABC? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Was the fabric case over- or undercosted by the traditional cost system compared to ABC?
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