Eason Company manufactures wheel rims. The company produces two wheel rim models: standard and deluxe. For 2025, Eason's managers have decided to use the same indirect manufacturing costs per wheel rim that they computed in 2024 using activity-based costing. E (Click the icon to view the 2024 indirect manufacturing costs per wheel rim.) In addition to the unit indirect manufacturing costs, the following data are expected for the company's standard and deluxe models for 2025: E (Click the icon to view the expected information.) Because of limited machine hour capacity, Eason can produce either 2,000 standard rims or 2,000 deluxe rims. Read the requirements. Requirement 1. If Eason's managers rely on the ABC unit cost data computed in 2024, which model will they produce? Carry each cost to the nearest cent. (Ignore selling and administrative expenses for this calculation.) Text Use hodel. Data Table Data Table þelux Sal Standard Deluxe Indirect Manufacturing Cost Per Unit Dire Sales price $ 800.00 $ 940.00 Standard Deluxe Dire Direct materials 31.00 48.00 ABC costs 2$ 224.40 $ 719.40 Indi Direct labor 45.00 52.00 Single-rate costs 2$ 429.00 $ 514.80 Gro Print Done Print Done
Eason Company manufactures wheel rims. The company produces two wheel rim models: standard and deluxe. For 2025, Eason's managers have decided to use the same indirect manufacturing costs per wheel rim that they computed in 2024 using activity-based costing. E (Click the icon to view the 2024 indirect manufacturing costs per wheel rim.) In addition to the unit indirect manufacturing costs, the following data are expected for the company's standard and deluxe models for 2025: E (Click the icon to view the expected information.) Because of limited machine hour capacity, Eason can produce either 2,000 standard rims or 2,000 deluxe rims. Read the requirements. Requirement 1. If Eason's managers rely on the ABC unit cost data computed in 2024, which model will they produce? Carry each cost to the nearest cent. (Ignore selling and administrative expenses for this calculation.) Text Use hodel. Data Table Data Table þelux Sal Standard Deluxe Indirect Manufacturing Cost Per Unit Dire Sales price $ 800.00 $ 940.00 Standard Deluxe Dire Direct materials 31.00 48.00 ABC costs 2$ 224.40 $ 719.40 Indi Direct labor 45.00 52.00 Single-rate costs 2$ 429.00 $ 514.80 Gro Print Done Print Done
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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