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Caterpillar Corporation accumulated the following cost information for its two products, X and Y: X Y Total Production volume 4,500 3,200 Total direct man. labor hrs. 9,000 35,000 Setup cost per batch $5,500 $7,200 Batch size 300 160 Total setup costs incurred $82,500 $36,000 2 1.5 DMLH per unit A traditional costing system would allocate setup costs on the basis of DMLH. An ABC system would trace costs by spreading the costs per batch over the units in a batch. What is the setup cost per unit of product X under ABC costing system?

Caterpillar Corporation accumulated the following cost information for its two products, X and Y: X Y Total Production volume 4,500 3,200 Total direct man. labor hrs. 9,000 35,000 Setup cost per batch $5,500 $7,200 Batch size 300 160 Total setup costs incurred $82,500 $36,000 2 1.5 DMLH per unit A traditional costing system would allocate setup costs on the basis of DMLH. An ABC system would trace costs by spreading the costs per batch over the units in a batch. What is the setup cost per unit of product X under ABC costing system?

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter5: Process Costing
Section: Chapter Questions
Problem 1PB: The following product costs are available for Stellis Company on the production of erasers: direct...
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What is the setup cost per unit

Caterpillar Corporation accumulated the following cost information for its two products, X and Y: X Y Total Production volume 4,500 3,200 Total direct man. labor hrs. 9,000 35,000 Setup cost per batch $5,500 $7,200 Batch size 300 160 Total setup costs incurred $82,500 $36,000 2 1.5 DMLH per unit A traditional costing system would allocate setup costs on the basis of DMLH. An ABC system would trace costs by spreading the costs per batch over the units in a batch. What is the setup cost per unit of product X under ABC costing system?
Transcribed Image Text:Caterpillar Corporation accumulated the following cost information for its two products, X and Y: X Y Total Production volume 4,500 3,200 Total direct man. labor hrs. 9,000 35,000 Setup cost per batch $5,500 $7,200 Batch size 300 160 Total setup costs incurred $82,500 $36,000 2 1.5 DMLH per unit A traditional costing system would allocate setup costs on the basis of DMLH. An ABC system would trace costs by spreading the costs per batch over the units in a batch. What is the setup cost per unit of product X under ABC costing system?
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