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 Total estimated overhead costs are $332,860, of which $158,400 is assigned to the material handling cost pool and $174,460 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. Required 1 Required 2 Standard Model 25,400 570 90 Complete this question by entering your answers in the tabs below. Standard Model Deluxe Model Deluxe Model 30,400 870 520 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 Required 1 Standard Model Deluxe Model Required 2 < Required 1 Required 2 > Calculate the overhead assigned to each product using ABC. Overhead Assigned < Required 1 Required 2 >
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 Total estimated overhead costs are $332,860, of which $158,400 is assigned to the material handling cost pool and $174,460 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. Required 1 Required 2 Standard Model 25,400 570 90 Complete this question by entering your answers in the tabs below. Standard Model Deluxe Model Deluxe Model 30,400 870 520 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 Required 1 Standard Model Deluxe Model Required 2 < Required 1 Required 2 > Calculate the overhead assigned to each product using ABC. Overhead Assigned < Required 1 Required 2 >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Question
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
Total estimated overhead costs are $332,860, of which $158,400 is assigned to the material handling cost pool and $174,460 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.
Required 1 Required 2
Standard Model Deluxe Model
30,400
870
520
Complete this question by entering your answers in the tabs below.
Standard Model
Deluxe Model
25,400
570
90
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
Required 1
Standard Model
Deluxe Model
Required 2
< Required 1
Required 2 >
Calculate the overhead assigned to each product using ABC.
Overhead Assigned
< Required 1
Required 2 >
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