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d. P205.00. b. P 44.65. V. Problems Problem 1 Peejay Autoparts, Inc., previously used a cost system that allocated all factory overhead costs to products based on 350 percent of direct labor cost. The company has just implemented an ABC system that traces indirect costs to products based on consumption of major activities as indicated below. Compare the total annual costs of Product X using both the traditional volume-based and the new ABC systems. Product X Cost Annual Cost Driver Driver Consumption Cost Qиantity Activity P10,000 P 30,000 P300,000 Labor 800 hours P500,000 Machining 20,000 hours 100 hours P100,000 10,000 hours Setup P200,000 12 orders 2,000 orders Production order P 20,000 5 requisitions 1,000 requisitions Material handling 18 parts P480,000 12,000 parts Parts administration

d. P205.00. b. P 44.65. V. Problems Problem 1 Peejay Autoparts, Inc., previously used a cost system that allocated all factory overhead costs to products based on 350 percent of direct labor cost. The company has just implemented an ABC system that traces indirect costs to products based on consumption of major activities as indicated below. Compare the total annual costs of Product X using both the traditional volume-based and the new ABC systems. Product X Cost Annual Cost Driver Driver Consumption Cost Qиantity Activity P10,000 P 30,000 P300,000 Labor 800 hours P500,000 Machining 20,000 hours 100 hours P100,000 10,000 hours Setup P200,000 12 orders 2,000 orders Production order P 20,000 5 requisitions 1,000 requisitions Material handling 18 parts P480,000 12,000 parts Parts administration

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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d. P205.00. b. P 44.65. V. Problems Problem 1 Peejay Autoparts, Inc., previously used a cost system that allocated all factory overhead costs to products based on 350 percent of direct labor cost. The company has just implemented an ABC system that traces indirect costs to products based on consumption of major activities as indicated below. Compare the total annual costs of Product X using both the traditional volume-based and the new ABC systems. Product X Cost Annual Cost Driver Driver Consumption Cost Qиantity Activity P10,000 P 30,000 P300,000 Labor 800 hours P500,000 Machining 20,000 hours 100 hours P100,000 10,000 hours Setup P200,000 12 orders 2,000 orders Production order P 20,000 5 requisitions 1,000 requisitions Material handling 18 parts P480,000 12,000 parts Parts administration
Transcribed Image Text:d. P205.00. b. P 44.65. V. Problems Problem 1 Peejay Autoparts, Inc., previously used a cost system that allocated all factory overhead costs to products based on 350 percent of direct labor cost. The company has just implemented an ABC system that traces indirect costs to products based on consumption of major activities as indicated below. Compare the total annual costs of Product X using both the traditional volume-based and the new ABC systems. Product X Cost Annual Cost Driver Driver Consumption Cost Qиantity Activity P10,000 P 30,000 P300,000 Labor 800 hours P500,000 Machining 20,000 hours 100 hours P100,000 10,000 hours Setup P200,000 12 orders 2,000 orders Production order P 20,000 5 requisitions 1,000 requisitions Material handling 18 parts P480,000 12,000 parts Parts administration
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