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Hoger Corporation accumulated the following cost information for its two products, A and B: A B Total Production volume 2,000 1,000 Total direct man. labor hrs. 5,000 20,000 Setup cost per batch $1,000 $2,000 Batch size 100 50 Total setup costs incurred $20,000 $40,000 2 1 DMLH per unit A traditional costing system would allocate setup costs on the basis of DMLH. An ABC system would trace costs by spreading the costs per batch over the units in a batch. What is the setup cost per unit of product A under each costing system? A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity of each of the company's free activity cost pools are shown in the following table. Activity cost Budgeted Budgeted activity-Budgeted activity - Budgeted activity pool cost Project A Activity 1 $70,000 6,000 Activity 2 $45,000 7,000 Activity 3 $82,000 2,500 Project B 9,000 15,000 1,000 - Project C 20,000 8,000 1,625 How much overhead will be assigned to Product B using activity-based costing? O $56,500 0 $78,000 0 $62,500 O $197,000 0 $70,000

Hoger Corporation accumulated the following cost information for its two products, A and B: A B Total Production volume 2,000 1,000 Total direct man. labor hrs. 5,000 20,000 Setup cost per batch $1,000 $2,000 Batch size 100 50 Total setup costs incurred $20,000 $40,000 2 1 DMLH per unit A traditional costing system would allocate setup costs on the basis of DMLH. An ABC system would trace costs by spreading the costs per batch over the units in a batch. What is the setup cost per unit of product A under each costing system? A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity of each of the company's free activity cost pools are shown in the following table. Activity cost Budgeted Budgeted activity-Budgeted activity - Budgeted activity pool cost Project A Activity 1 $70,000 6,000 Activity 2 $45,000 7,000 Activity 3 $82,000 2,500 Project B 9,000 15,000 1,000 - Project C 20,000 8,000 1,625 How much overhead will be assigned to Product B using activity-based costing? O $56,500 0 $78,000 0 $62,500 O $197,000 0 $70,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Hoger Corporation accumulated the following cost information for its two products, A and B: A B Total Production volume 2,000 1,000 Total direct man. labor hrs. 5,000 20,000 Setup cost per batch $1,000 $2,000 Batch size 100 50 Total setup costs incurred $20,000 $40,000 2 1 DMLH per unit A traditional costing system would allocate setup costs on the basis of DMLH. An ABC system would trace costs by spreading the costs per batch over the units in a batch. What is the setup cost per unit of product A under each costing system? A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity of each of the company's free activity cost pools are shown in the following table. Activity cost Budgeted Budgeted activity-Budgeted activity - Budgeted activity pool cost Project A Activity 1 $70,000 6,000 Activity 2 $45,000 7,000 Activity 3 $82,000 2,500 Project B 9,000 15,000 1,000 - Project C 20,000 8,000 1,625 How much overhead will be assigned to Product B using activity-based costing? O $56,500 0 $78,000 0 $62,500 O $197,000 0 $70,000
Transcribed Image Text:Hoger Corporation accumulated the following cost information for its two products, A and B: A B Total Production volume 2,000 1,000 Total direct man. labor hrs. 5,000 20,000 Setup cost per batch $1,000 $2,000 Batch size 100 50 Total setup costs incurred $20,000 $40,000 2 1 DMLH per unit A traditional costing system would allocate setup costs on the basis of DMLH. An ABC system would trace costs by spreading the costs per batch over the units in a batch. What is the setup cost per unit of product A under each costing system? A company uses activity-based costing to determine the costs of its three products: A, B, and C. The budgeted cost and activity of each of the company's free activity cost pools are shown in the following table. Activity cost Budgeted Budgeted activity-Budgeted activity - Budgeted activity pool cost Project A Activity 1 $70,000 6,000 Activity 2 $45,000 7,000 Activity 3 $82,000 2,500 Project B 9,000 15,000 1,000 - Project C 20,000 8,000 1,625 How much overhead will be assigned to Product B using activity-based costing? O $56,500 0 $78,000 0 $62,500 O $197,000 0 $70,000
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