Exercise 6-1 (Algo) Variable and Absorption Costing Unit Product Costs [LO6-1] Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $805. Selected data for the company's operations last year follow: Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs: Fixed manufacturing overhead Fixed selling and administrative 12,000 9,000 3,000 1. Absorption costing unit product cost 2. Variable costing unit product cost $ 200 $360 $55 $ 16 $ 840,000 $ 500,000 Required: 1. Assume that the company uses absorption costing. Compute the unit product cost for one gamelan. (Round your intermediate calculations and final answer to the nearest whole dollar amount.) 2. Assume that the company uses variable costing. Compute the unit product cost for one gamelan.

Exercise 6-1 (Algo) Variable and Absorption Costing Unit Product Costs [LO6-1] Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $805. Selected data for the company's operations last year follow: Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs: Fixed manufacturing overhead Fixed selling and administrative 12,000 9,000 3,000 1. Absorption costing unit product cost 2. Variable costing unit product cost $ 200 $360 $55 $ 16 $ 840,000 $ 500,000 Required: 1. Assume that the company uses absorption costing. Compute the unit product cost for one gamelan. (Round your intermediate calculations and final answer to the nearest whole dollar amount.) 2. Assume that the company uses variable costing. Compute the unit product cost for one gamelan.

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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Exercise 7-13 (Algo) Computing ABC Product Costs [LO7-3, LO7-4] Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours Hubs Sprockets per Unit 0.50 0.10 Annual Production 28,000 units 60,000 units Additional information about the company follows: a. Hubs require $23 in direct materials per unit, and Sprockets require $12. b. The direct labor wage rate is $14 per hour. c. Hubs require special equipment and are more complex to manufacture than Sprockets. d. The ABC system has the following activity cost pools: Estimated Overhead Activity Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) Cost $ 25,200 Hubs Sprockets Total 140 112 252 $ 171,500 4,900 0 $ 122,000 NA NA 4,900 NA General factory (organization-sustaining) Required: 1. Compute the activity rate for each activity cost pool. 2. Determine the unit product cost of each product according to the ABC system.…
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Problem 7-17 (Algo) Comparing Traditional and Activity-Based Product Margins [LO7-1, LO7-3, LO7-4, LO7-5] Smoky Mountain Corporation makes two types of hiking boots-the Xtreme and the Pathfinder. Data concerning these two product lines appear below: Selling price per unit Direct materials per unit Direct labor per unit. Direct labor-hours per unit Estimated annual production and sales Estimated total manufacturing overhead Estimated total direct labor-hours $116.00 $ $ Xtreme Batch setups (setups) Product sustaining (number of products) Other Total manufacturing overhead cost 64.00 12.00 1.5 DLHS 29,000 units The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below: Activities and Activity Measures Supporting direct labor (direct labor-hours) Pathfinder $ 80.00 $ 52.00 $ 8.00 1.0 DLHS 76,000 units $ 1,912,000 119,500 DLHS…
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