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" Harrison Company makes two products and uses a traditional costing system in which a single plantwide predetermined overhead rate is computed based on direct labor-hours. Data for the two products for the upcoming year follow: Rascon $ 12.00 $ 2.50 Direct materials cost per unit Direct labor cost per unit Direct labor-hours per unit Number of units produced 0.20 12,000. These products are customized to some degree for specific customers. Parcel $6.00 $ 3.60 0.25 44,000 Required: 1. The company's manufacturing overhead costs for the year are expected to be $281,400. Using the company's traditional costing system, compute the unit product costs for the two products. 2. Management is considering an activity-based absorption costing system in which half of the overhead would continue to be allocated based on direct labor-hours and half would be allocated based on engineering design time. This time is expected to be distributed as follows during the upcoming year: Parcel Rascon 4,800 4,800 Total 9,600 Engineering design time (in hours) Compute the unit product costs for the two products using the proposed activity-based absorption costing system.

" Harrison Company makes two products and uses a traditional costing system in which a single plantwide predetermined overhead rate is computed based on direct labor-hours. Data for the two products for the upcoming year follow: Rascon $ 12.00 $ 2.50 Direct materials cost per unit Direct labor cost per unit Direct labor-hours per unit Number of units produced 0.20 12,000. These products are customized to some degree for specific customers. Parcel $6.00 $ 3.60 0.25 44,000 Required: 1. The company's manufacturing overhead costs for the year are expected to be $281,400. Using the company's traditional costing system, compute the unit product costs for the two products. 2. Management is considering an activity-based absorption costing system in which half of the overhead would continue to be allocated based on direct labor-hours and half would be allocated based on engineering design time. This time is expected to be distributed as follows during the upcoming year: Parcel Rascon 4,800 4,800 Total 9,600 Engineering design time (in hours) Compute the unit product costs for the two products using the proposed activity-based absorption costing system.

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 30P: Primera Company produces two products and uses a predetermined overhead rate to apply overhead....
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1 Harrison Company makes two products and uses a traditional costing system in which a single plantwide predetermined overhead rate is computed based on direct labor-hours. Data for the two products for the upcoming year follow: Rascon $ 12.00 $ 2.50 0.20 12,000. Parcel $ 6.00 $ 3.60 0.25 44,000 Direct materials cost per unit Direct labor cost per unit Direct labor-hours per unit Number of units produced These products are customized to some degree for specific customers. Required: 1. The company's manufacturing overhead costs for the year are expected to be $281,400. Using the company's traditional costing system, compute the unit product costs for the two products. 2. Management is considering an activity-based absorption costing system in which half of the overhead would continue to be allocated based on direct labor-hours and half would be allocated based on engineering design time. This time is expected to be distributed as follows during the upcoming year: Rascon Parcel Engineering design time (in hours) 4,800 4,800 Compute the unit product costs for the two products using the proposed activity-based absorption costing system. Total 9,600
Transcribed Image Text:1 Harrison Company makes two products and uses a traditional costing system in which a single plantwide predetermined overhead rate is computed based on direct labor-hours. Data for the two products for the upcoming year follow: Rascon $ 12.00 $ 2.50 0.20 12,000. Parcel $ 6.00 $ 3.60 0.25 44,000 Direct materials cost per unit Direct labor cost per unit Direct labor-hours per unit Number of units produced These products are customized to some degree for specific customers. Required: 1. The company's manufacturing overhead costs for the year are expected to be $281,400. Using the company's traditional costing system, compute the unit product costs for the two products. 2. Management is considering an activity-based absorption costing system in which half of the overhead would continue to be allocated based on direct labor-hours and half would be allocated based on engineering design time. This time is expected to be distributed as follows during the upcoming year: Rascon Parcel Engineering design time (in hours) 4,800 4,800 Compute the unit product costs for the two products using the proposed activity-based absorption costing system. Total 9,600
Required 1 Required 2 The company's manufacturing overhead costs for the year are expected to be $281,400. Using the company's traditional costing system, compute the unit product costs for the two products. (Round your intermediate calculations and final answers to 2 decimal places.) Unit product cost Rascon Required 1 Required 2 Unit product cost Compute the unit product costs for the two products using the proposed activity-based absorption costing system. (Round your intermediate calculations and final answers to 2 decimal places.) Parcel Rascon Parcel
Transcribed Image Text:Required 1 Required 2 The company's manufacturing overhead costs for the year are expected to be $281,400. Using the company's traditional costing system, compute the unit product costs for the two products. (Round your intermediate calculations and final answers to 2 decimal places.) Unit product cost Rascon Required 1 Required 2 Unit product cost Compute the unit product costs for the two products using the proposed activity-based absorption costing system. (Round your intermediate calculations and final answers to 2 decimal places.) Parcel Rascon Parcel
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