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Kunkel Company makes two products and uses a conventional costing system in rate is computed based on direct labor-hours. Data for the two products for the up Wurcon Mercon $ 10.00 Direct materials cost per unit Direct labor cost per unit Direct labor-hours per unit Number of units produced $ 3.00 0.20 10,000 These products are customized to some degree for specific customers. $ 8.00 $ 3.75 0.25 40,000

Kunkel Company makes two products and uses a conventional costing system in rate is computed based on direct labor-hours. Data for the two products for the up Wurcon Mercon $ 10.00 Direct materials cost per unit Direct labor cost per unit Direct labor-hours per unit Number of units produced $ 3.00 0.20 10,000 These products are customized to some degree for specific customers. $ 8.00 $ 3.75 0.25 40,000

FINANCIAL ACCOUNTING
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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Required information Req 2A Req 28 In the journal below, complete the necessary journal entries for the year 2024 (credit "Cash, Materials, etc." for construction costs incurred). Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Req 2C Journal entry worksheet < 2 3 Record construction costs. Date 2024 Note: Enter debits before credits. Becord entry General Journal Clear entry Debit Credit May peneral Journal 8
Transcribed Image Text:Required information Req 2A Req 28 In the journal below, complete the necessary journal entries for the year 2024 (credit "Cash, Materials, etc." for construction costs incurred). Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Req 2C Journal entry worksheet < 2 3 Record construction costs. Date 2024 Note: Enter debits before credits. Becord entry General Journal Clear entry Debit Credit May peneral Journal 8
Exercise 4-7 (Static) Contrast ABC and Conventional Product Costs [LO4-2, L04-3, L04-41 Kunkel Company makes two products and uses a conventional costing system in which a single plantwide predetermined overhead rate is computed based on direct labor-hours. Data for the two products for the upcoming year follow: Direct materials cost per unit Mercon $ 10.00 $ 3.00 Direct labor cost per unit Direct labor-hours per unit 0.20 Number of units produced 10,000 These products are customized to some degree for specific customers. Wurcon $ 8.00 $ 3.75 0.25 40,000 Required: 1. The company's manufacturing overhead costs for the year are expected to be $336,000. Using the company's conventional costing system, compute the unit product costs for the two products. 2. Management is considering an activity-based costing system in which half of the overhead would continue to be allocated on the basis of direct labor-hours and half would be allocated on the basis of engineering design time. This time is expected to be distributed as follows during the upcoming year: 1. Unit product cost under conventional system 2. Unit product cost under ABC system Mercon 4,000 Mercon Wurcon 4,000 Engineering design time (in hours) Compute the unit product costs for the two products using the proposed ABC system. (For all requirements, do not round intermediate calculations. Round your final answers to 2 decimal places.) Total 8,000 Wurcon
Transcribed Image Text:Exercise 4-7 (Static) Contrast ABC and Conventional Product Costs [LO4-2, L04-3, L04-41 Kunkel Company makes two products and uses a conventional costing system in which a single plantwide predetermined overhead rate is computed based on direct labor-hours. Data for the two products for the upcoming year follow: Direct materials cost per unit Mercon $ 10.00 $ 3.00 Direct labor cost per unit Direct labor-hours per unit 0.20 Number of units produced 10,000 These products are customized to some degree for specific customers. Wurcon $ 8.00 $ 3.75 0.25 40,000 Required: 1. The company's manufacturing overhead costs for the year are expected to be $336,000. Using the company's conventional costing system, compute the unit product costs for the two products. 2. Management is considering an activity-based costing system in which half of the overhead would continue to be allocated on the basis of direct labor-hours and half would be allocated on the basis of engineering design time. This time is expected to be distributed as follows during the upcoming year: 1. Unit product cost under conventional system 2. Unit product cost under ABC system Mercon 4,000 Mercon Wurcon 4,000 Engineering design time (in hours) Compute the unit product costs for the two products using the proposed ABC system. (For all requirements, do not round intermediate calculations. Round your final answers to 2 decimal places.) Total 8,000 Wurcon
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