Crane is an electronics components manufacturer. Information about the company's two products follows: AM-2 FM-9 Units produced 20,000 4,000 Direct labor hours required for production 10,000 15,000 Units per batch 4,000 400 Shipping weight per unit 0.50 Ibs. 10 Ibs. The company incurs $786,000 in overhead per year and has traditionally applied overhead on the basis of direct labor hours.
Crane is an electronics components manufacturer. Information about the company's two products follows: AM-2 FM-9 Units produced 20,000 4,000 Direct labor hours required for production 10,000 15,000 Units per batch 4,000 400 Shipping weight per unit 0.50 Ibs. 10 Ibs. The company incurs $786,000 in overhead per year and has traditionally applied overhead on the basis of direct labor hours.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Trying to find the activity based costing of the following for the allocated
Transcribed Image Text:Your answer is incorrect.
Assume that Crane has identified three activity cost pools.
Pool
Cost
Cost Driver
Assembly
$500,000
Direct labor hours
Setup
36,000
Number of setups (1 per batch)
Packaging
250,000
Weight
(i) Given these activity pools and cost drivers, how much overhead should be allocated to each product? (Round per unit
rates to 2 decimal places, e.g. 3.54 and final answers to 0 decimal places, e.g. 45,286.)
AM-2
FM-9
Total allocated overhead
(ii) What overhead cost per unit will be allocated to each product? (Round answers to 2 decimal places, e.g. 15.25.)
AM-2
FM-9
$
Overhead cost per unit
%24
%24
%24
%24
Transcribed Image Text:Crane is an electronics components manufacturer. Information about the company's two products follows:
AM-2
FM-9
Units produced
20,000
4,000
Direct labor hours required for production
10,000
15,000
Units per batch
4,000
400
Shipping weight per unit
0.50 Ibs.
10 Ibs.
The company incurs $786,000 in overhead per year and has traditionally applied overhead on the basis of direct labor hours.
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