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Pacifica Industrial Products Corporation makes two products, Product H and Product L. Product H is expected to sell 37,000 units next year and Product L is expected to sell 7,400 units. A unit of either product requires 0.4 direct labor-hours. The company's total manufacturing overhead for the year is expected to be $1.509,600 Required: 1-a. The company currently applies manufacturing overhead to products using direct labor-hours as the allocation base. If this method is followed, how much overhead cost per unit would be applied to each product? 1-b. Compute the total amount of overhead cost that would be applied to each product. 2. Management is considering an activity-based costing system and would like to know what impact this change might have on product costs. For purposes of discussion, it has been suggested that all of the manufacturing overhead be treated as a product-level cost. The total manufacturing overhead would be divided in half between the two products, with $754,800 assigned to Product H and $754,800 assigned to Product L. If this suggestion is followed, how much overhead cost per unit would be assigned to each product? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 The company currently applies manufacturing overhead to products using direct labor-hours as the allocation base. If this method is followed, how much overhead cost per unit would be applied to each product? (Round your answers to 2 decimal places.) Product H Product L Overhead cost per unit Req 1A Req 1B >

Pacifica Industrial Products Corporation makes two products, Product H and Product L. Product H is expected to sell 37,000 units next year and Product L is expected to sell 7,400 units. A unit of either product requires 0.4 direct labor-hours. The company's total manufacturing overhead for the year is expected to be $1.509,600 Required: 1-a. The company currently applies manufacturing overhead to products using direct labor-hours as the allocation base. If this method is followed, how much overhead cost per unit would be applied to each product? 1-b. Compute the total amount of overhead cost that would be applied to each product. 2. Management is considering an activity-based costing system and would like to know what impact this change might have on product costs. For purposes of discussion, it has been suggested that all of the manufacturing overhead be treated as a product-level cost. The total manufacturing overhead would be divided in half between the two products, with $754,800 assigned to Product H and $754,800 assigned to Product L. If this suggestion is followed, how much overhead cost per unit would be assigned to each product? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 The company currently applies manufacturing overhead to products using direct labor-hours as the allocation base. If this method is followed, how much overhead cost per unit would be applied to each product? (Round your answers to 2 decimal places.) Product H Product L Overhead cost per unit Req 1A Req 1B >

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Pacifica Industrial Products Corporation makes two products, Product H and Product L. Product H is expected to sell 37,000 units next year and Product L is expected to sell 7,400 units. A unit of either product requires 0.4 direct labor-hours. The company's total manufacturing overhead for the year is expected to be $1.509,600 Required: 1-a. The company currently applies manufacturing overhead to products using direct labor-hours as the allocation base. If this method is followed, how much overhead cost per unit would be applied to each product? 1-b. Compute the total amount of overhead cost that would be applied to each product. 2. Management is considering an activity-based costing system and would like to know what impact this change might have on product costs. For purposes of discussion, it has been suggested that all of the manufacturing overhead be treated as a product-level cost. The total manufacturing overhead would be divided in half between the two products, with $754,800 assigned to Product H and $754,800 assigned to Product L. If this suggestion is followed, how much overhead cost per unit would be assigned to each product? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 The company currently applies manufacturing overhead to products using direct labor-hours as the allocation base. If this method is followed, how much overhead cost per unit would be applied to each product? (Round your answers to 2 decimal places.) Product H Product L Overhead cost per unit Req 1A Req 1B >
Transcribed Image Text:Pacifica Industrial Products Corporation makes two products, Product H and Product L. Product H is expected to sell 37,000 units next year and Product L is expected to sell 7,400 units. A unit of either product requires 0.4 direct labor-hours. The company's total manufacturing overhead for the year is expected to be $1.509,600 Required: 1-a. The company currently applies manufacturing overhead to products using direct labor-hours as the allocation base. If this method is followed, how much overhead cost per unit would be applied to each product? 1-b. Compute the total amount of overhead cost that would be applied to each product. 2. Management is considering an activity-based costing system and would like to know what impact this change might have on product costs. For purposes of discussion, it has been suggested that all of the manufacturing overhead be treated as a product-level cost. The total manufacturing overhead would be divided in half between the two products, with $754,800 assigned to Product H and $754,800 assigned to Product L. If this suggestion is followed, how much overhead cost per unit would be assigned to each product? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 The company currently applies manufacturing overhead to products using direct labor-hours as the allocation base. If this method is followed, how much overhead cost per unit would be applied to each product? (Round your answers to 2 decimal places.) Product H Product L Overhead cost per unit Req 1A Req 1B >
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