Phillips Company produces 50,000 units of Product Q and 6,000 units of Product Z during a period. In that period, four set-ups were required for color changes. All units of Product Q are black, which is the color in the process at the beginning of the period. A set-up was made for 1,000 blue units of Product Z; a set-up was made for 4,500 red units of Product Z; a set-up was made for 500 green units of Product Z. A set-up was then made to return the process to its standard black coloration and the units of Product Q were run. Each set-up costs P500. If set-up cost is assigned on a volume basis for the department, what is the approximate per-unit set-up cost for Product Z? Round your answer to 3 decimal places. If set-up cost is assigned on a volume basis for the department, what is the approximate per-unit set-up cost for the red units of Product Z? Round your answer to 3 decimal places. Assume that Philips Company has decided to allocate overhead costs using levels of cost drivers. What would be the approximate per-unit set-up cost for the green units of Product Z? Round your answer to whole number.

1. If setup cost is assigned on volume basis Setup costs = $500 per setup× 4 setups…

Answered: Phillips Company produces 50,000 units…

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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Phillips Company produces 50,000 units of Product Q and 6,000 units of Product Z during a period. In that period, four set-ups were required for color changes. All units of Product Q are black, which is the color in the process at the beginning of the period. A set-up was made for 1,000 blue units of Product Z; a set-up was made for 4,500 red units of Product Z; a set-up was made for 500 green units of Product Z. A set-up was then made to return the process to its standard black coloration and the units of Product Q were run. Each set-up costs P500.

If set-up cost is assigned on a volume basis for the department, what is the approximate per-unit set-up cost for Product Z? Round your answer to 3 decimal places.
If set-up cost is assigned on a volume basis for the department, what is the approximate per-unit set-up cost for the red units of Product Z? Round your answer to 3 decimal places.
Assume that Philips Company has decided to allocate overhead costs using levels of cost drivers. What would be the approximate per-unit set-up cost for the green units of Product Z? Round your answer to whole number.

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