Carlton's Kitchens makes two types of pasta makers: Strands and Shapes. The company expects to manufacture 70,000 units of Strands, which has a per-unit direct material cost of $10 and a per-unit direct labor cost of $45. It also expects to manufacture 30,000 units of Shapes, which has a per-unit material cost of $15 and a per-unit direct labor cost of $30. It is estimated that Strands will use 140,000 machine hours and Shapes will require 60,000 machine hours. Historically, the company has used the traditional allocation method and applied overhead at a rate of $21.01 per machine hour. It was determined that there were three cost pools, and the overhead for each cost pool is shown: Machine Setups $90,000 Machine Processing 4,000,000 Material Requisitions 112,500 Total Overhead $4,202,500 The cost driver for each cost pool and its expected activity is shown: Strands Shapes Total Machine Setups 100 200 300 Machine Hours 140,000 60,000 200,000 Parts Requisitions 90 135 225 A. What is the per-unit cost for each product under the traditional allocation method? Round your answers to two decimal places. Strands Shapes Total per unit cost $fill in the blank 1 $fill in the blank 2 B. What is the per-unit cost for each product under ABC costing? Round your answers to two decimal places. Strands Shapes Total cost $fill in the blank 3 $fill in the blank 4 C. Compared to ABC costing, was each product's overhead under- or overapplied?
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Carlton's Kitchens makes two types of pasta makers: Strands and Shapes. The company expects to manufacture 70,000 units of Strands, which has a per-unit direct material cost of $10 and a per-unit direct labor cost of $45. It also expects to manufacture 30,000 units of Shapes, which has a per-unit material cost of $15 and a per-unit direct labor cost of $30. It is estimated that Strands will use 140,000 machine hours and Shapes will require 60,000 machine hours. Historically, the company has used the traditional allocation method and applied
overhead at a rate of $21.01 per machine hour. It was determined that there were three cost pools, and the overhead for each cost pool is shown:Machine Setups $90,000 Machine Processing 4,000,000 Material Requisitions 112,500 Total Overhead $4,202,500 The cost driver for each cost pool and its expected activity is shown:
Strands Shapes Total Machine Setups 100 200 300 Machine Hours 140,000 60,000 200,000 Parts Requisitions 90 135 225 A. What is the per-unit cost for each product under the traditional allocation method? Round your answers to two decimal places.
Strands Shapes Total per unit cost $fill in the blank 1 $fill in the blank 2 B. What is the per-unit cost for each product under ABC costing? Round your answers to two decimal places.
Strands Shapes Total cost $fill in the blank 3 $fill in the blank 4 C. Compared to ABC costing, was each product's overhead under- or overapplied?
D. By how much was overhead under- or overapplied for each product? Round your answers to two decimal places.
Overhead Amounts Strands $fill in the blank 6 Shapes $fill in the blank 8
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