Edge Manufacturing produces two types of entry doors: D Standard. The assignment basis for support costs has bee abor dollars. For 2009, Edge Manufacturing compiled the data for the two products: Deluxe Sta Sales units $50,000 $4C Sales price per unit Direct material and labor costs per $180.00 $650.00 $47 $13 unit

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Edge Manufacturing produces two types of entry doors: Deluxe and
Standard. The assignment basis for support costs has been direct
labor dollars. For 2009, Edge Manufacturing compiled the following
data for the two products:
Deluxe
Standard
Sales units
$50,000
$400,000
Sales price per unit
$650.00 $475.00
Direct material and labor costs per $180.00 $130.00
unit
Manufacturing support costs per unit $ 80.00
$120.00
Last year, Edge Manufacturing purchased an expensive robotics
system to allow for more decorative door products in the deluxe
product line. The CFO suggested that an ABC analysis could be
valuable to help evaluate a product mix and promotion strategy for the
next sales campaign.
She obtained the following ABC information for 20X5:
Cost Driver
Activity
Setups
Machine- # of machine
Cost
Total
Deluxe Standard
# of setups
$ 500,000
$44,000,000 | 600,000 300,000 |300,000
500
400
100
related
hours
Packing
# of shipments $ 5,000,000 | 250,000 |50,000
200,000
N.B.: #
= number
Required:
a. Using the activity-based costing data presented above:
1. Compute the cost-driver rate for each overhead activity.
2. Compute the manufacturing overhead cost per unit for each
type of entry door.
3. Compute the total cost to manufacture one unit of each type
of entry door.
Transcribed Image Text:Edge Manufacturing produces two types of entry doors: Deluxe and Standard. The assignment basis for support costs has been direct labor dollars. For 2009, Edge Manufacturing compiled the following data for the two products: Deluxe Standard Sales units $50,000 $400,000 Sales price per unit $650.00 $475.00 Direct material and labor costs per $180.00 $130.00 unit Manufacturing support costs per unit $ 80.00 $120.00 Last year, Edge Manufacturing purchased an expensive robotics system to allow for more decorative door products in the deluxe product line. The CFO suggested that an ABC analysis could be valuable to help evaluate a product mix and promotion strategy for the next sales campaign. She obtained the following ABC information for 20X5: Cost Driver Activity Setups Machine- # of machine Cost Total Deluxe Standard # of setups $ 500,000 $44,000,000 | 600,000 300,000 |300,000 500 400 100 related hours Packing # of shipments $ 5,000,000 | 250,000 |50,000 200,000 N.B.: # = number Required: a. Using the activity-based costing data presented above: 1. Compute the cost-driver rate for each overhead activity. 2. Compute the manufacturing overhead cost per unit for each type of entry door. 3. Compute the total cost to manufacture one unit of each type of entry door.
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