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d overhead costs to the three products using the companywide allocation base of direct labor hours. The c ented an ABC system when it installed computer-controlled assembly stations that rendered the traditional ve. In implementing the ABC system, the company identified the following activity cost pools and cost drive pry ty Total Pooled Cost $ 376,000 206,400 109,600 304,000 : materials cost Types of Costs Indirect labor wages, supplies, factory utilities, machine maintenance Materials handling, inventory storage, labor for setups, packaging, labeling and shipping, scheduling Research and development Rent, general utilities, maintenance, facility depreciation, administrative salaries al data for each of the product lines follow: Machine hours Number of pre Time spent by Square foota Commercial Home Miniature $ 25.04 per unit $15.04 per unit $ 12.04 per unit Total

d overhead costs to the three products using the companywide allocation base of direct labor hours. The c ented an ABC system when it installed computer-controlled assembly stations that rendered the traditional ve. In implementing the ABC system, the company identified the following activity cost pools and cost drive pry ty Total Pooled Cost $ 376,000 206,400 109,600 304,000 : materials cost Types of Costs Indirect labor wages, supplies, factory utilities, machine maintenance Materials handling, inventory storage, labor for setups, packaging, labeling and shipping, scheduling Research and development Rent, general utilities, maintenance, facility depreciation, administrative salaries al data for each of the product lines follow: Machine hours Number of pre Time spent by Square foota Commercial Home Miniature $ 25.04 per unit $15.04 per unit $ 12.04 per unit Total

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Campbell Electronics produces video games in three market categories: commercial, home, and miniature. Campbell has traditionally allocated overhead costs to the three products using the companywide allocation base of direct labor hours. The company recently implemented an ABC system when it installed computer-controlled assembly stations that rendered the traditional costing system ineffective. In implementing the ABC system, the company identified the following activity cost pools and cost drivers: Category Unit Batch Product Facility Additional data for each of the product lines follow: Direct materials cost Direct labor cost Number of labor hours Number of machine hours Number of production orders Research and development time Number of units Square footage Required Type of Product Total Pooled Cost $ 376,000 206,400 109,600 304,000 a. Commercial a. Home a. Miniature Combined total b. Commercial b. Home b. Miniature Combined total $ Types of Costs Indirect labor wages, supplies, factory utilities, machine maintenance Materials handling, inventory storage, labor for setups, packaging, labeling and shipping, scheduling Research and development Rent, general utilities, maintenance, facility. depreciation, administrative salaries $ Total Cost 0 Commercial $ 25.04 per unit $ 10.20 per hour 6,000 10,000 200 0 10% 15,000 20,000 Home $15.04 per unit $ 8.20 per hour 12,000 45,000 2,000 20% Cost per Unit 45,000 50,000 a. Determine the total cost and cost per unit for each product line, assuming that overhead costs are allocated to each product line using direct labor hours as a companywide allocation base. Also determine the combined cost of all three product lines. b. Determine the total cost and cost per unit for each product line, assuming that an ABC system is used to allocate overhead costs. Determine the combined cost of all three product lines. Note: For all requirements, round intermediate calculations for allocation rates to 2 decimal places and all other calculations to the nearest whole dollar. Round "Cost per Unit" to 2 decimal places. Round your answers for "Total Cost" to the nearest whole dollar amount. Miniature $12.04 per unit $9.20 per hour 2,000 25,000 800 70% 14,000 30,000 Machine hours Number of production orders Time spent by research department Square footage Cost Driver Total 20,000 80,000 3,000 100% 74,000 100,000
Transcribed Image Text:Campbell Electronics produces video games in three market categories: commercial, home, and miniature. Campbell has traditionally allocated overhead costs to the three products using the companywide allocation base of direct labor hours. The company recently implemented an ABC system when it installed computer-controlled assembly stations that rendered the traditional costing system ineffective. In implementing the ABC system, the company identified the following activity cost pools and cost drivers: Category Unit Batch Product Facility Additional data for each of the product lines follow: Direct materials cost Direct labor cost Number of labor hours Number of machine hours Number of production orders Research and development time Number of units Square footage Required Type of Product Total Pooled Cost $ 376,000 206,400 109,600 304,000 a. Commercial a. Home a. Miniature Combined total b. Commercial b. Home b. Miniature Combined total $ Types of Costs Indirect labor wages, supplies, factory utilities, machine maintenance Materials handling, inventory storage, labor for setups, packaging, labeling and shipping, scheduling Research and development Rent, general utilities, maintenance, facility. depreciation, administrative salaries $ Total Cost 0 Commercial $ 25.04 per unit $ 10.20 per hour 6,000 10,000 200 0 10% 15,000 20,000 Home $15.04 per unit $ 8.20 per hour 12,000 45,000 2,000 20% Cost per Unit 45,000 50,000 a. Determine the total cost and cost per unit for each product line, assuming that overhead costs are allocated to each product line using direct labor hours as a companywide allocation base. Also determine the combined cost of all three product lines. b. Determine the total cost and cost per unit for each product line, assuming that an ABC system is used to allocate overhead costs. Determine the combined cost of all three product lines. Note: For all requirements, round intermediate calculations for allocation rates to 2 decimal places and all other calculations to the nearest whole dollar. Round "Cost per Unit" to 2 decimal places. Round your answers for "Total Cost" to the nearest whole dollar amount. Miniature $12.04 per unit $9.20 per hour 2,000 25,000 800 70% 14,000 30,000 Machine hours Number of production orders Time spent by research department Square footage Cost Driver Total 20,000 80,000 3,000 100% 74,000 100,000
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