PROBLEM 1: UVW Company produces three products. Production and cost information is as follows: Units produced Direct labor hours Model A1 2,000 4,000 100 200 15 Model B2 6,000 2,000 150 225 10 Model C3 12,000 4,000 250 275 5 Number of setups Number of shipments Engineering change orders Overhead costs include setups P 45,000, shipping costs P 70,000, and engineering costs, P 90,000. 1. What would be the overhead cost per unit for Model A1 if traditional costing were used? 2. What would be the overhead cost per unit for B2 if activity-based costing (ABC) were used? CIL

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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PROBLEM 1:
UVW Company produces three products. Production and cost information is as follows:
Model A1
2,000
4,000
100
Model B2
Units produced
Direct labor hours
Number of setups
Number of shipments
Engineering change orders.
Overhead costs include setups P 45,000, shipping costs P 70,000, and engineering costs, P 90,000.
1. What would be the overhead cost per unit for Model A1 if traditional costing were used?
2. What would be the overhead cost per unit for B2 if activity-based costing (ABC) were used?
200
15
Model C3
6,000
2,000
150
225
10
12,000
4,000
250
275
5
||
Transcribed Image Text:PROBLEM 1: UVW Company produces three products. Production and cost information is as follows: Model A1 2,000 4,000 100 Model B2 Units produced Direct labor hours Number of setups Number of shipments Engineering change orders. Overhead costs include setups P 45,000, shipping costs P 70,000, and engineering costs, P 90,000. 1. What would be the overhead cost per unit for Model A1 if traditional costing were used? 2. What would be the overhead cost per unit for B2 if activity-based costing (ABC) were used? 200 15 Model C3 6,000 2,000 150 225 10 12,000 4,000 250 275 5 ||
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