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Machining costs $375,000 Setup costs 120,000 Inspection costs 105,000 Total Overhead Costs 600,000 a. According the simple costing system, Parker's cost allocation base was Direct manufacturing labor-hours.Total Overhead Cost was $600,000 and there was single cost pool. Calculate the manufacturing overhead cost per unit for each product and Compute the manufacturing cost per unit for each product. b. Parker decided that implement ABC. System. Parker's manager team selected 3 cost driver (Cost Allocation Base) for each overhead cost pool (Machining Costs, Setup Costs, Inspection Cost). Choose a proper cost driver for each overhead cost pool and calculate the manufacturing overhead cost per unit for each product and Compute the manufacturing cost per unit for each product. c. Parker after implemented ABC System, If you compare Simple Costing System to ABC System, determine whether the manufactured two products are under or over costed ?

Machining costs $375,000 Setup costs 120,000 Inspection costs 105,000 Total Overhead Costs 600,000 a. According the simple costing system, Parker's cost allocation base was Direct manufacturing labor-hours.Total Overhead Cost was $600,000 and there was single cost pool. Calculate the manufacturing overhead cost per unit for each product and Compute the manufacturing cost per unit for each product. b. Parker decided that implement ABC. System. Parker's manager team selected 3 cost driver (Cost Allocation Base) for each overhead cost pool (Machining Costs, Setup Costs, Inspection Cost). Choose a proper cost driver for each overhead cost pool and calculate the manufacturing overhead cost per unit for each product and Compute the manufacturing cost per unit for each product. c. Parker after implemented ABC System, If you compare Simple Costing System to ABC System, determine whether the manufactured two products are under or over costed ?

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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3. Parker Company produces mathematical and financial calculators and operates at capacity. Data related to the two products are presented here: Mathematical Financial Annual production in units 50,000 100,000 Direct material costs $150,000 $300,000 Direct manufacturing labor $ 50,000 $100,000 costs Direct manufacturing labor- 2,500 5,000 hours Machine-hours 75,000 50,000 Number of production runs 60 60 Inspection hours 800 1700 Total manufacturing overhead costs are as follows:
Transcribed Image Text:3. Parker Company produces mathematical and financial calculators and operates at capacity. Data related to the two products are presented here: Mathematical Financial Annual production in units 50,000 100,000 Direct material costs $150,000 $300,000 Direct manufacturing labor $ 50,000 $100,000 costs Direct manufacturing labor- 2,500 5,000 hours Machine-hours 75,000 50,000 Number of production runs 60 60 Inspection hours 800 1700 Total manufacturing overhead costs are as follows:
Machining costs $375,000 Setup costs 120,000 Inspection costs 105,000 Total Overhead Costs 600,000 a. According the simple costing system, Parker's cost allocation base was Direct manufacturing labor-hours.Total Overhead Cost was $600,000 and there was single cost pool. Calculate the manufacturing overhead cost per unit for each product and Compute the manufacturing cost per unit for each product. b. Parker decided that implement ABC. System. Parker's manager team selected 3 cost driver (Cost Allocation Base) for each overhead cost pool (Machining Costs, Setup Costs, Inspection Cost). Choose a proper cost driver for each overhead cost pool and calculate the manufacturing overhead cost per unit for each product and Compute the manufacturing cost per unit for each product. c. Parker after implemented ABC System, If you compare Simple Costing System to ABC System, determine whether the manufactured two products are under or over costed ?
Transcribed Image Text:Machining costs $375,000 Setup costs 120,000 Inspection costs 105,000 Total Overhead Costs 600,000 a. According the simple costing system, Parker's cost allocation base was Direct manufacturing labor-hours.Total Overhead Cost was $600,000 and there was single cost pool. Calculate the manufacturing overhead cost per unit for each product and Compute the manufacturing cost per unit for each product. b. Parker decided that implement ABC. System. Parker's manager team selected 3 cost driver (Cost Allocation Base) for each overhead cost pool (Machining Costs, Setup Costs, Inspection Cost). Choose a proper cost driver for each overhead cost pool and calculate the manufacturing overhead cost per unit for each product and Compute the manufacturing cost per unit for each product. c. Parker after implemented ABC System, If you compare Simple Costing System to ABC System, determine whether the manufactured two products are under or over costed ?
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