Doaktown Products manufactures fishing equipment for recreational uses. The Miramichi plant produces the company's two versionsof a special reel used for river fishing. The two models are the M-008, a basic reel, and the M-123, a new and improved version. Costaccountants at company headquarters have prepared costs for the two reels for the most recent period. The plant manager isconcerned. The cost report does not coincide with her intuition about the relative costs of the two models. She has asked you toreview the cost accounting and help her prepare a response to headquarters.Manufacturing overhead is currently assigned to products based on their direct labor costs. For the most recent month, manufacturingoverhead was $283,200. During that time, the company produced 12,200 units of the M-008 and 2,200 units of the M-123. The directcosts of production were as follows.Direct materialsDirect laborM-008M-123$ 97,600 $ 88,00097,60044,000Management determined that overhead costs are caused by three cost drivers. These drivers and their costs for last year were asfollows.Cost DriverNumber of machine-hoursNumber of production runsNumber of inspectionsTotal overheadRequired A Required BCosts$104,70080,00098,500$283,200Total overheadTotal unit costTotal$ 185,600141,600Required:a. How much overhead will be assigned to each product if these three cost drivers are used to allocate overhead? What is the totalcost per unit produced for each product?b. How much of the overhead will be assigned to each product if direct labor cost is used to allocate overhead? What is the total costper unit produced for each product?Complete this question by entering your answers in the tabs below.M-008Activity LevelM-008 M-123 Total1,000 9,000 10,000103015354050How much of the overhead will be assigned to each product if direct labor cost is used to allocate overhead? What is the totalcost per unit produced for each product? (Round "Total unit cost" to 2 decimal places.)M-123 Doaktown Products manufactures fishing equipment for recreational uses. The Miramichi plant produces the company's two versionsof a special reel used for river fishing. The two models are the M-008, a basic reel, and the M-123, a new and improved version. Costaccountants at company headquarters have prepared costs for the two reels for the most recent period. The plant manager isconcerned. The cost report does not coincide with her intuition about the relative costs of the two models. She has asked you toreview the cost accounting and help her prepare a response to headquarters.Manufacturing overhead is currently assigned to products based on their direct labor costs. For the most recent month, manufacturingoverhead was $283,200. During that time, the company produced 12,200 units of the M-008 and 2,200 units of the M-123. The directcosts of production were as follows.Direct materialsDirect laborM-008M-123$ 97,600 $ 88,00097,600 44,000Management determined that overhead costs are caused by three cost drivers. These drivers and their costs for last year were asfollows.Cost DriverNumber of machine-hoursNumber of production runsNumber of inspectionsTotal overheadRequired A Required BTotal$ 185,600141,600Costs$104,70080,00098,500$283,200Total overheadTotal unit costActivity LevelM-008M-123 Total10,000M-0081,000 9,0001015Required:a. How much overhead will be assigned to each product if these three cost drivers are used to allocate overhead? What is the totalcost per unit produced for each product?b. How much of the overhead will be assigned to each product if direct labor cost is used to allocate overhead? What is the total costper unit produced for each product?3035Complete this question by entering your answers in the tabs below.4050How much overhead will be assigned to each product if these three cost drivers are used to allocate overhead? What is thetotal cost per unit produced for each product? (Round "Total unit cost" to 2 decimal places.)M-123

The activity-based costing is the way of allocating overheads to the cost of the product. Under…

Doaktown Products manufactures fishing equipment for recreational uses. The Miramichi plant produces the company's two versions of a special reel used for river fishing. The two models are the M-008, a basic reel, and the M-123, a new and improved version. Cost accountants at company headquarters have prepared costs for the two reels for the most recent period. The plant manager is concerned. The cost report does not coincide with her intuition about the relative costs of the two models. She has asked you to review the cost accounting and help her prepare a response to headquarters. Manufacturing overhead is currently assigned to products based on their direct labor costs. For the most recent month, manufacturing overhead was $283,200. During that time, the company produced 12,200 units of the M-008 and 2,200 units of the M-123. The direct costs of production were as follows. Direct materials Direct labor M-008 M-123 $ 97,600 $ 88,000 97,600 44,000 Management determined that overhead costs are caused by three cost drivers. These drivers and their costs for last year were as follows. Cost Driver Number of machine-hours Number of production runs Number of inspections Total overhead Total $ 185,600 141,600 Costs $104,700 80,000 98,500 $283,200 Activity Level M-008 M-123 Total 1,000 9,000 10,000 10 30 15 35 40 50 Required: a. How much overhead will be assigned to each product if these three cost drivers are used to allocate overhead? What is the total cost per unit produced for each product? b. How much of the overhead will be assigned to each product if direct labor cost is used to allocate overhead? What is the total cost per unit produced for each product? Complete this question by entering your answers in the tabs below.

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 5PA: Boston Executive. Inc., produces executive limousines and currently manufactures the mini-bar inset...