Julio produces two types of calculator, standard and deluxe. The company is currently using a traditional costing system with machine hours as the cost driver but is considering a move to activity-based costing. In preparing for the possible switch, Julio has identified two cost pools: materials handling and setup. The collected data follow: Number of machine hours Number of material moves Number of setups Standard Model Deluxe Model 30,000 850 500 25,000 550 80 Total estimated overhead costs are $303,560, of which $140,000 is assigned to the material handling cost pool and $163,560 is assigned to the setup cost pool. Required: 1. Calculate the overhead assigned to each product using the traditional cost system. 2. Calculate the overhead assigned to each product using ABC
Julio produces two types of calculator, standard and deluxe. The company is currently using a traditional costing system with machine hours as the cost driver but is considering a move to activity-based costing. In preparing for the possible switch, Julio has identified two cost pools: materials handling and setup. The collected data follow: Number of machine hours Number of material moves Number of setups Standard Model Deluxe Model 30,000 850 500 25,000 550 80 Total estimated overhead costs are $303,560, of which $140,000 is assigned to the material handling cost pool and $163,560 is assigned to the setup cost pool. Required: 1. Calculate the overhead assigned to each product using the traditional cost system. 2. Calculate the overhead assigned to each product using ABC
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Julio produces two types of calculator, standard and deluxe. The company is currently using a traditional costing system with machine
hours as the cost driver but is considering a move to activity-based costing. In preparing for the possible switch, Julio has identified
two cost pools: materials handling and setup. The collected data follow
Number of machine hours
Number of material moves
Number of setups
Standard Model Deluxe Model
25,000
30,000
550
850
80
500
Total estimated overhead costs are $303,560, of which $140,000 is assigned to the material handling cost pool and $163,560 is
assigned to the setup cost pool.
Required:
1. Calculate the overhead assigned to each product using the traditional cost system.
2. Calculate the overhead assigned to each product using ABC
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Calculate the overhead assigned to each product using the traditional cost system. (Round the overhead rate to four decimal
places and round your final answer to the nearest whole dollar amount.)
Overhead Assigned
Standard Model
Deluxe Model
Requited
Required 2 >
Transcribed Image Text:ces
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Calculate the overhead assigned to each product using ABC. (Do not round intermediate calculations.)
Overhead Assigned
Standard Model
Deluxe Model
< Required 1
Required 2 >
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