How do I determine the cost of one unit each of SW100 and SG150, assuming a company wide overhead rate is used based on total machine hours? Round rate to two decimal places. Steampunk Corporation has the following predicted indirect costs and cost drivers for 2019 for the given activity cost pools:Fabrication FinishingDepartment DepartmentCost DriverMaintenance$ 36,00018,000 Machine hoursMaterials handling54,00027,000 Material movesMachine126,0009,000 Machine setupsInspections45,000 Inspection hoursTotal$ 216,000$ 99,000The following activity predictions were also made for the year:Fabrication FinishingDepartment DepartmentMachine hours5,0002,500Material moves1,500750Machine setups35025Inspection hours500It is assumed that the cost per unit of activity for a given activity does not vary between departments. Steampunk's president, Abner Punk, is trying to evaluate the company's product mix strategy regarding two of its product models, SW100 and SG150. Thecompany has been using a company wide overhead rate based on machine hours but is considering switching to either department rates of activity-based rates. The production manager has provided the following data for the production of a batch of 100 units foreach of these models:SW100SG150Direct materials cost$ 12,000 $ 18,000Direct labor cost$ 4,800 $3,600Machine hours (Fabrication)250350Machine hours (Finishing)10050Materials moves2040Machine setups510Inspection hours1530a. Determine the cost of one unit each of SW100 and SG150, assuming a company-wide overhead rate is used based on total machine hours.Round rate to two decimal places.Overhead rate based on total machine hours: $ 0per machine hourUse rounded overhead rate calculated about for calculations below. Round cost answers to the nearest whole number. Round cost per unit to two decimal places.Product CostsperUnitSW100SG150Direct materials240.Direct labor0.0.Manufacturing overhead0.0.Total cost per batch0.Number of units per batch0.0.Costper unit%24

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Description: How do I determine the cost of one unit each of SW100 and SG150, assuming a company wide overhead rate is used based on total machine hours? Round rate to two decimal places. Steampunk Corporation has the following predicted indirect costs and cost d

Company-wide overhead rate based on machine hours refers to Total overhead/ Total machine hours

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How do I determine the cost of one unit each of SW100 and SG150, assuming a company wide overhead rate is used based on total machine hours? Round rate to two decimal places.

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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Concept explainers

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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How do I determine the cost of one unit each of SW100 and SG150, assuming a company wide overhead rate is used based on total machine hours? Round rate to two decimal places.

Steampunk Corporation has the following predicted indirect costs and cost drivers for 2019 for the given activity cost pools:
Fabrication Finishing
Department Department
Cost Driver
Maintenance
$ 36,000
18,000 Machine hours
Materials handling
54,000
27,000 Material moves
Machine
126,000
9,000 Machine setups
Inspections
45,000 Inspection hours
Total
$ 216,000
$ 99,000
The following activity predictions were also made for the year:
Fabrication Finishing
Department Department
Machine hours
5,000
2,500
Material moves
1,500
750
Machine setups
350
25
Inspection hours
500
It is assumed that the cost per unit of activity for a given activity does not vary between departments. Steampunk's president, Abner Punk, is trying to evaluate the company's product mix strategy regarding two of its product models, SW100 and SG150. The
company has been using a company wide overhead rate based on machine hours but is considering switching to either department rates of activity-based rates. The production manager has provided the following data for the production of a batch of 100 units for
each of these models:
SW100
SG150
Direct materials cost
$ 12,000 $ 18,000
Direct labor cost
$ 4,800 $3,600
Machine hours (Fabrication)
250
350
Machine hours (Finishing)
100
50
Materials moves
20
40
Machine setups
5
10
Inspection hours
15
30
a. Determine the cost of one unit each of SW100 and SG150, assuming a company-wide overhead rate is used based on total machine hours.
Round rate to two decimal places.
Overhead rate based on total machine hours: $ 0
per machine hour
Use rounded overhead rate calculated about for calculations below. Round cost answers to the nearest whole number. Round cost per unit to two decimal places.
Product Costs
per
Unit
SW100
SG150
Direct materials
24
0.
Direct labor
0.
0.
Manufacturing overhead
0.
0.
Total cost per batch
0.
Number of units per batch
0.
0.
Cost
per unit
%24

Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.

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