E9.7 (LO 3), AP The managers of Hand It to Me were determined to reduce product costs for the three versions of wireless mouse they carried—small, medium, and large—to be more competitive. All three product types went through production and packaging and generated the need for factory maintenance. The activity rates for these three key activities are as follows. MOH Rates Production $12.00 per DL hour Packaging $5.00 per packaging hour Maintenance $3.00 per machine hour The following resources were consumed for the production of each type of mouse. Small Medium Large Direct labor hours used 3,500 6,000 4,500 Packaging hours used 2,500 3,500 4,500 Machine hours used 5,000 5,000 5,000 Units produced 30,000 40,000 30,000 Required 1. Describe what information the managers used to estimate the three activity rates noted above. 2. Allocate MOH costs to the three products using the activity rates given. In addition to
E9.7 (LO 3), AP The managers of Hand It to Me were determined to reduce product costs for the three versions of wireless mouse they carried—small, medium, and large—to be more competitive. All three product types went through production and packaging and generated the need for factory maintenance. The activity rates for these three key activities are as follows. MOH Rates Production $12.00 per DL hour Packaging $5.00 per packaging hour Maintenance $3.00 per machine hour The following resources were consumed for the production of each type of mouse. Small Medium Large Direct labor hours used 3,500 6,000 4,500 Packaging hours used 2,500 3,500 4,500 Machine hours used 5,000 5,000 5,000 Units produced 30,000 40,000 30,000 Required 1. Describe what information the managers used to estimate the three activity rates noted above. 2. Allocate MOH costs to the three products using the activity rates given. In addition to
Chapter1: Financial Statements And Business Decisions
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E9.7 (LO 3), AP The managers of Hand It to Me were determined to reduce product costs for the three versions of wireless mouse they carried—small, medium, and large—to be more competitive. All three product types went through production and packaging and generated the need for factory maintenance. The activity rates for these three key activities are as follows.
MOH Rates
Production $12.00 per DL hour
Packaging $5.00 per packaging hour
Maintenance $3.00 per machine hour
The following resources were consumed for the production of each type of mouse.
Small Medium Large
Direct labor hours used 3,500 6,000 4,500
Packaging hours used 2,500 3,500 4,500
Machine hours used 5,000 5,000 5,000
Units produced 30,000 40,000 30,000
Required
1. Describe what information the managers used to estimate the three activity rates noted above.
2. Allocate MOH costs to the three products using the activity rates given.
In addition to
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