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Hoger Corporation accumulated the following cost information for its two products, A and B: Total Production volume A B 3,000 2,000 Total direct man. labor hrs. 7,000 28,000 Setup cost per batch $4,000 $8,000 Batch size 250 125 Total setup costs incurred $50,000 $22,500 2 I 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 ABC costing system?

Hoger Corporation accumulated the following cost information for its two products, A and B: Total Production volume A B 3,000 2,000 Total direct man. labor hrs. 7,000 28,000 Setup cost per batch $4,000 $8,000 Batch size 250 125 Total setup costs incurred $50,000 $22,500 2 I 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 ABC costing system?

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter5: Process Costing
Section: Chapter Questions
Problem 1PB: The following product costs are available for Stellis Company on the production of erasers: direct...
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Hoger Corporation accumulated the following cost information for its two products, A and B: Total Production volume A B 3,000 2,000 Total direct man. labor hrs. 7,000 28,000 Setup cost per batch $4,000 $8,000 Batch size 250 125 Total setup costs incurred $50,000 $22,500 2 I 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 ABC costing system?
Transcribed Image Text:Hoger Corporation accumulated the following cost information for its two products, A and B: Total Production volume A B 3,000 2,000 Total direct man. labor hrs. 7,000 28,000 Setup cost per batch $4,000 $8,000 Batch size 250 125 Total setup costs incurred $50,000 $22,500 2 I 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 ABC costing system?
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