Problem 1 (adapted) Kai Corp. manufactures two models of beds, the standard and the deluxe model. The following activity and cost information has been compiled: Standard Deluxe OH Costs No. of setups 9 21 P 90,000 No. of components 90 150 210,000 No. of DLH 650 150 Required: Compute the total amount of overhead costs assigned to each model using: 1. Traditional costing system 2. Activity-based costing system 3. Discuss the effects of the difference in the computed amounts of overhead costs.
Problem 1 (adapted) Kai Corp. manufactures two models of beds, the standard and the deluxe model. The following activity and cost information has been compiled: Standard Deluxe OH Costs No. of setups 9 21 P 90,000 No. of components 90 150 210,000 No. of DLH 650 150 Required: Compute the total amount of overhead costs assigned to each model using: 1. Traditional costing system 2. Activity-based costing system 3. Discuss the effects of the difference in the computed amounts of overhead costs.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem 1 (adapted)
Kai Corp. manufactures two models of beds, the standard and the deluxe model.
The following activity and cost information has been compiled:
Standard Deluxe OH Costs
No. of setups 9 21 P 90,000
No. of components 90 150 210,000
No. of DLH 650 150
Required:
Compute the total amount of
1. Traditional costing system
2. Activity-based costing system
3. Discuss the effects of the difference in the computed amounts of overhead
costs.
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