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Mercon Direct materials cost per unit Direct labor cost per unit Direct labor-hours per unit Number of units produced These products are customized to some degree for specific customers. Required: 1. The company's manufacturing overhead costs for the year are expected to be $640,000. 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 Wurcon 8.00 $ 10.00 2.00 1,000 $6.00 $ 11.00 7.00 2,000 Mercon 1,000 Mercon Wurcon 1,000 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 2,000 Wurcon

Mercon Direct materials cost per unit Direct labor cost per unit Direct labor-hours per unit Number of units produced These products are customized to some degree for specific customers. Required: 1. The company's manufacturing overhead costs for the year are expected to be $640,000. 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 Wurcon 8.00 $ 10.00 2.00 1,000 $6.00 $ 11.00 7.00 2,000 Mercon 1,000 Mercon Wurcon 1,000 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 2,000 Wurcon

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter5: Process Costing
Section: Chapter Questions
Problem 1PB: The following product costs are available for Stellis Company on the production of erasers: direct...
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Mercon Direct materials cost per unit Direct labor cost per unit Direct labor-hours per unit Number of units produced These products are customized to some degree for specific customers. Wurcon 8.00 $ 10.00 2.00 1,000 1. Unit product cost under conventional system 2. Unit product cost under ABC system $6.00 $ 11.00 Required: 1. The company's manufacturing overhead costs for the year are expected to be $640,000. 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: 7.00 2,000 Mercon 1,000 Mercon Wurcon 1,000 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 2,000 Wurcon
Transcribed Image Text:Mercon Direct materials cost per unit Direct labor cost per unit Direct labor-hours per unit Number of units produced These products are customized to some degree for specific customers. Wurcon 8.00 $ 10.00 2.00 1,000 1. Unit product cost under conventional system 2. Unit product cost under ABC system $6.00 $ 11.00 Required: 1. The company's manufacturing overhead costs for the year are expected to be $640,000. 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: 7.00 2,000 Mercon 1,000 Mercon Wurcon 1,000 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 2,000 Wurcon
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