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: 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. Rascon $ 11.00 $ 2.80 0.50 10,000 Required: 1. The company's manufacturing overhead costs for the year are expected to be $606,100. 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 $7.00 $ 3.80 0.55 41,000 Rascon Parcel Engineering design time (in hours) 4,500 4,500 Compute the unit product costs for the two products using the proposed activity-based absorption costing system. Complete this question by entering your answers in the tabs below. Unit product cost Rascon Required 1 Required 2 The company's manufacturing overhead costs for the year are expected to be $606,100. 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.) Parcel Total 9,000 < Required 1 Required 2 >
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: 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. Rascon $ 11.00 $ 2.80 0.50 10,000 Required: 1. The company's manufacturing overhead costs for the year are expected to be $606,100. 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 $7.00 $ 3.80 0.55 41,000 Rascon Parcel Engineering design time (in hours) 4,500 4,500 Compute the unit product costs for the two products using the proposed activity-based absorption costing system. Complete this question by entering your answers in the tabs below. Unit product cost Rascon Required 1 Required 2 The company's manufacturing overhead costs for the year are expected to be $606,100. 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.) Parcel Total 9,000 < Required 1 Required 2 >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text: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:
Direct materials cost per unit
Direct labor cost per unit
Direct labor-hours per unit
Number of units produced.
Rascon.
$ 11.00
$ 2.80
0.50
10,000
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 $606,100. 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
Engineering design time (in hours)
4,500
Compute the unit product costs for the two products using the proposed activity-based absorption costing system.
Parcel
$7.00
$ 3.80
0.55
41,000
Rascon
4,500
Complete this question by entering your answers in the tabs below.
Unit product cost
Rascon
Required 1 Required 2
The company's manufacturing overhead costs for the year are expected to be $606,100. 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.)
Parcel
Total
9,000
< Required 1
Required 2 >
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