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 ?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
3.
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:
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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