Jackson Enterprises manufactures two products-a basic gizmo and an advanced model gizmo. The company is using an activity-based costing system. They have identified three activities for allocation of indirect costs. Activity Materials receiving Production setup Quality inspection Cost Driver Number of parts Number of setups Inspection time Cost-Allocation Rate $2.00 per part $500.00 per setup $90 per hour A production run for the basic model is 250 units, for the advanced model, 100 units. Each unit of product consumes the following activities: Number of Parts 10 Basic Gizmo Advanced Gizmo O A. Direct costs for the two products are as follows: Direct Materials $50.00 $95.00 Basic Gizmo Advanced Gizmo O D. $37. B. $65. C. 15 The amount of overhead allocated to one unit of the basic model would be $592. Number of Setups 1 setup per production run 1 setup per production run $162. Direct Labor $75.00 $125.00 Inspection Time 10 minutes 20 minutes <
Jackson Enterprises manufactures two products-a basic gizmo and an advanced model gizmo. The company is using an activity-based costing system. They have identified three activities for allocation of indirect costs. Activity Materials receiving Production setup Quality inspection Cost Driver Number of parts Number of setups Inspection time Cost-Allocation Rate $2.00 per part $500.00 per setup $90 per hour A production run for the basic model is 250 units, for the advanced model, 100 units. Each unit of product consumes the following activities: Number of Parts 10 Basic Gizmo Advanced Gizmo O A. Direct costs for the two products are as follows: Direct Materials $50.00 $95.00 Basic Gizmo Advanced Gizmo O D. $37. B. $65. C. 15 The amount of overhead allocated to one unit of the basic model would be $592. Number of Setups 1 setup per production run 1 setup per production run $162. Direct Labor $75.00 $125.00 Inspection Time 10 minutes 20 minutes <
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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
Transcribed Image Text:Jackson Enterprises manufactures two products-a basic gizmo and an advanced model
gizmo. The company is using an activity-based costing system. They have identified three
activities for allocation of indirect costs.
Activity
Materials receiving
Production setup
Quality inspection
Cost Driver
Number of parts
Number of setups
Inspection time
Cost-Allocation Rate
$2.00 per part
$500.00 per setup
$90 per hour
A production run for the basic model is 250 units, for the advanced model, 100 units.
Each unit of product consumes the following activities:
Number of Parts
10
Basic Gizmo
O A.
Advanced Gizmo
Direct costs for the two products are as follows:
Direct Materials
$50.00
$95.00
B.
C.
O D.
Basic Gizmo
Advanced Gizmo
$37.
15
The amount of overhead allocated to one unit of the
basic model would be
$65.
$592.
Number of Setups
1 setup
per production run
1 setup
per production run
$162.
Direct Labor
$75.00
$125.00
Inspection Time
10 minutes
20 minutes
<
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