Exercise 17-17 (Algo) Using activity-based costing to allocate overhead, compute product cost and grossprofit LO P3Ice Cool produces two different models of air conditioners. The activities, costs, and cost drivers associated with the productionprocesses follow.ProcessAssemblyInspectionsPurchase orders.FinishingSupportAdditional production information concerning its two models follows.Units and ActivitiesUnits producedMachine hoursSetupsActivityMachiningSetupsInspectingPurchasingPer UnitSelling price per unitDirect materials cost per unitDirect labor cost per unitRequired 1Budgeted Cost$ 311,00022,000$ 333,000$ 232,000$ 134,000ActivityModel X2,0002,200MachiningSetupsInspectingPurchasing20520360Required 2Model Z4,0005,000Model X$ 41515514040300180Required 3Activity Cost DriverMachine hours (MH)Setups1. Compute the activity rate for each activity using activity-based costing.2. Using activity-based costing, compute the overhead cost per unit for each model.Complete this question by entering your answers in the tabs below.InspectionsPurchase orders3. Compute the total product cost per unit for each model.4. For each model, compute the gross profit per unit (selling price per unit minus product cost per unit).Model Z$ 395115150Required 4BudgetedActivityUsage7,20060Compute the activity rate for each activity using activity-based costing. (Round "Activity rate" to 2 decimal places.)Budgeted CostBudgeted Activity UsageActivity Rate< Required 1820540Required 2 >

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Description: Exercise 17-17 (Algo) Using activity-based costing to allocate overhead, compute product cost and grossprofit LO P3Ice Cool produces two different models of air conditioners. The activities, costs, and cost drivers associated with the productionproc

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Exercise 17-17 (Algo) Using activity-based costing to allocate overhead, compute product cost and gross profit LO P3 Ice Cool produces two different models of air conditioners. The activities, costs, and cost drivers associated with the production processes follow. Process Assembly Finishing Support Activity Machining Setups Inspecting Purchasing Inspections Purchase orders. Units and Activities Units produced Machine hours Setups Budgeted Cost $ 311,000 22,000 $ 333,000 $ 232,000 $ 134,000 Additional production information concerning its two models follows. Model X 2,000 2,200 20 520 360 Per Unit Selling price per unit Direct materials cost per unit Direct labor cost per unit Model Z 4,000 5,000 Model X $ 415 155 140 Activity Cost Driver Machine hours (MH) Setups 40 300 180 Inspections Purchase orders Model z $ 395 115 150 Budgeted Activity Usage 7,200 60 1. Compute the activity rate for each activity using activity-based costing. 2. Using activity-based costing, compute the overhead cost per unit for each model. 820 540 3. Compute the total product cost per unit for each model. 4. For each model, compute the gross profit per unit (selling price per unit minus product cost per unit).

Exercise 17-17 (Algo) Using activity-based costing to allocate overhead, compute product cost and gross profit LO P3 Ice Cool produces two different models of air conditioners. The activities, costs, and cost drivers associated with the production processes follow. Process Assembly Finishing Support Activity Machining Setups Inspecting Purchasing Inspections Purchase orders. Units and Activities Units produced Machine hours Setups Budgeted Cost $ 311,000 22,000 $ 333,000 $ 232,000 $ 134,000 Additional production information concerning its two models follows. Model X 2,000 2,200 20 520 360 Per Unit Selling price per unit Direct materials cost per unit Direct labor cost per unit Model Z 4,000 5,000 Model X $ 415 155 140 Activity Cost Driver Machine hours (MH) Setups 40 300 180 Inspections Purchase orders Model z $ 395 115 150 Budgeted Activity Usage 7,200 60 1. Compute the activity rate for each activity using activity-based costing. 2. Using activity-based costing, compute the overhead cost per unit for each model. 820 540 3. Compute the total product cost per unit for each model. 4. For each model, compute the gross profit per unit (selling price per unit minus product cost per unit).

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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