Consider the following data for two products of Vigano Manufacturing. Budgeted Cost Activity Machine setup Parts handling Quality inspections Total budgeted overhead Unit Information Units produced Direct materials cost Direct labor cost Direct labor hours Activity Driver $ 18,000 (20 machine setups) 14,400 (16,000 parts) 21,600 (100 inspections) $ 54,000 Actual Activity Usage Setups Parts Inspections Product A 1,800 units $ 28 per unit $ 48 per unit 2 per unit Product B 360 units $ 38 per unit $ 58 per unit 2.50 per unit 1. Using a plantwide overhead rate based on 4,500 direct labor hours, compute the total product cost per unit for each product. 2. Consider the following additional information about these two products. If activity-based costing is used to allocate overhead cost, (a) compute overhead activity rates, (b) allocate overhead cost to Product A and Product B and compute overhead cost per unit for each, and (c) compute product cost per unit for each. Product A 8 setups 10,000 parts 40 inspections Product B 12 setups 6,000 parts 60 inspections

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Exercise 17-11 (Algo) Computing product cost per unit using plantwide method and activity-based
costing LO P1, P3
Consider the following data for two products of Vigano Manufacturing.
Budgeted
Cost
Activity
Machine setup
Parts handling
Quality inspections
Total budgeted overhead
Unit Information
Units produced
Direct materials cost
Direct labor cost
Direct labor hours
Actual Activity Usage
Setups
Parts
Inspections
1. Using a plantwide overhead rate based on 4,500 direct labor hours, compute the total product cost per unit for each product.
2. Consider the following additional information about these two products. If activity-based costing is used to allocate overhead cost,
(a) compute overhead activity rates, (b) allocate overhead cost to Product A and Product B and compute overhead cost per unit for
each, and (c) compute product cost per unit for each.
Required 1 Required 2
Activity Driver
$ 18,000 (20 machine setups)
14,400 (16,000 parts)
21,600 (100 inspections)
$ 54,000
Product A
Per Unit
1,800 units
$ 28 per unit
$ 48 per unit
2 per unit
Product A
Product B
Complete this question by entering your answers in the tabs below.
Product B
360 units
$ 38 per unit
$ 58 per unit
2.50 per unit
Product A
8 setups
10,000 parts
40 inspections
Using a plantwide overhead rate based on 4,500 direct labor hours, compute the total product cost per unit for each product.
Direct
Materials
Product Cost
per Unit
Direct Labor
Overhead
Product B
12 setups
6,000 parts
60 inspections
< Required 1
Required 2 >
Transcribed Image Text:Exercise 17-11 (Algo) Computing product cost per unit using plantwide method and activity-based costing LO P1, P3 Consider the following data for two products of Vigano Manufacturing. Budgeted Cost Activity Machine setup Parts handling Quality inspections Total budgeted overhead Unit Information Units produced Direct materials cost Direct labor cost Direct labor hours Actual Activity Usage Setups Parts Inspections 1. Using a plantwide overhead rate based on 4,500 direct labor hours, compute the total product cost per unit for each product. 2. Consider the following additional information about these two products. If activity-based costing is used to allocate overhead cost, (a) compute overhead activity rates, (b) allocate overhead cost to Product A and Product B and compute overhead cost per unit for each, and (c) compute product cost per unit for each. Required 1 Required 2 Activity Driver $ 18,000 (20 machine setups) 14,400 (16,000 parts) 21,600 (100 inspections) $ 54,000 Product A Per Unit 1,800 units $ 28 per unit $ 48 per unit 2 per unit Product A Product B Complete this question by entering your answers in the tabs below. Product B 360 units $ 38 per unit $ 58 per unit 2.50 per unit Product A 8 setups 10,000 parts 40 inspections Using a plantwide overhead rate based on 4,500 direct labor hours, compute the total product cost per unit for each product. Direct Materials Product Cost per Unit Direct Labor Overhead Product B 12 setups 6,000 parts 60 inspections < Required 1 Required 2 >
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