Product-Costing Accuracy, Plantwide and Departmental Rates, ABC Escuha Company produces two type of calculators: scientific and business. Both products pass through two producing departments. The business calculator is by far the most popular. The following data have been gathered for these two products: Product-Related Data Scientific Business Units produced per year 75,000 750,000 Prime costs $268,000 $2,680,000 Direct labor hours 96,500 965,000 Machine hours 47,700 477,000 Production runs 100 150 Inspection hours 2,000 3,000 Maintenance hours 2,250 9,000 Department Data Department 1 Department 2 Direct labor hours: Scientific calculator 73,500 23,000 Business calculator 125,450 839,550 Total 198,950 862,550 Machine hours: Scientific calculator 24,800 22,900 Business calculator 381,920 95,080 Total 406,720 117,980 Overhead costs: Setup costs $222,500 $222,500 Inspection costs 160,000 160,000 Power 250,000 156,000 Maintenance 180,000 258,750 Total $812,500 $797,250 Required: 1. Compute the overhead cost per unit for each product using a plantwide, unit-based rate using direct labor hours. Round your calculations and answers to the nearest cent. Plantwide rate $fill in the blank 1 per direct labor hour Overhead cost per unit: Scientific $fill in the blank 2 per unit Business $fill in the blank 3 per unit 2. Compute the overhead cost per unit for each product using departmental rates. In calculating departmental rates, use machine hours for Department 1 and direct labor hours for Department 2. Round departmental rates and the overhead cost per unit to the nearest cent if rounding is required. Departmental rates: Department 1 $fill in the blank 4 per machine hour Department 2 $fill in the blank 5 per direct labor hour Overhead cost per unit: Scientific $fill in the blank 6 per unit Business $fill in the blank 7 per unit Repeat using direct labor hours for Department 1 and machine hours for Department 2. Round departmental rates and the overhead cost per unit to the nearest cent if rounding is required. Departmental rates: Department 1 $fill in the blank 8 per direct labor hour Department 2 $fill in the blank 9 per machine hour Overhead cost per unit: Scientific $fill in the blank 10 per unit Business $fill in the blank 11 per unit 3. Compute the overhead cost per unit for each product using activity-based costing. Round your calculations and answers to the nearest cent. Overhead Cost Scientific $fill in the blank 12 per unit Business $fill in the blank 13 per unit

Product-Costing Accuracy, Plantwide and Departmental Rates, ABC Escuha Company produces two type of calculators: scientific and business. Both products pass through two producing departments. The business calculator is by far the most popular. The following data have been gathered for these two products: Product-Related Data Scientific Business Units produced per year 75,000 750,000 Prime costs $268,000 $2,680,000 Direct labor hours 96,500 965,000 Machine hours 47,700 477,000 Production runs 100 150 Inspection hours 2,000 3,000 Maintenance hours 2,250 9,000 Department Data Department 1 Department 2 Direct labor hours: Scientific calculator 73,500 23,000 Business calculator 125,450 839,550 Total 198,950 862,550 Machine hours: Scientific calculator 24,800 22,900 Business calculator 381,920 95,080 Total 406,720 117,980 Overhead costs: Setup costs $222,500 $222,500 Inspection costs 160,000 160,000 Power 250,000 156,000 Maintenance 180,000 258,750 Total $812,500 $797,250 Required: 1. Compute the overhead cost per unit for each product using a plantwide, unit-based rate using direct labor hours. Round your calculations and answers to the nearest cent. Plantwide rate $fill in the blank 1 per direct labor hour Overhead cost per unit: Scientific $fill in the blank 2 per unit Business $fill in the blank 3 per unit 2. Compute the overhead cost per unit for each product using departmental rates. In calculating departmental rates, use machine hours for Department 1 and direct labor hours for Department 2. Round departmental rates and the overhead cost per unit to the nearest cent if rounding is required. Departmental rates: Department 1 $fill in the blank 4 per machine hour Department 2 $fill in the blank 5 per direct labor hour Overhead cost per unit: Scientific $fill in the blank 6 per unit Business $fill in the blank 7 per unit Repeat using direct labor hours for Department 1 and machine hours for Department 2. Round departmental rates and the overhead cost per unit to the nearest cent if rounding is required. Departmental rates: Department 1 $fill in the blank 8 per direct labor hour Department 2 $fill in the blank 9 per machine hour Overhead cost per unit: Scientific $fill in the blank 10 per unit Business $fill in the blank 11 per unit 3. Compute the overhead cost per unit for each product using activity-based costing. Round your calculations and answers to the nearest cent. Overhead Cost Scientific $fill in the blank 12 per unit Business $fill in the blank 13 per unit

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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Question

Product-Costing Accuracy, Plantwide and Departmental Rates, ABC

Escuha Company produces two type of calculators: scientific and business. Both products pass through two producing departments. The business calculator is by far the most popular. The following data have been gathered for these two products:

	Product-Related Data
	Scientific	Business
Units produced per year	75,000	750,000
Prime costs	$268,000	$2,680,000
Direct labor hours	96,500	965,000
Machine hours	47,700	477,000
Production runs	100	150
Inspection hours	2,000	3,000
Maintenance hours	2,250	9,000

	Department Data
	Department 1	Department 2
Direct labor hours:
Scientific calculator	73,500	23,000
Business calculator	125,450	839,550
Total	198,950	862,550
Machine hours:
Scientific calculator	24,800	22,900
Business calculator	381,920	95,080
Total	406,720	117,980
Overhead costs:
Setup costs	$222,500	$222,500
Inspection costs	160,000	160,000
Power	250,000	156,000
Maintenance	180,000	258,750
Total	$812,500	$797,250

Required:

1. Compute the overhead cost per unit for each product using a plantwide, unit-based rate using direct labor hours. Round your calculations and answers to the nearest cent.

Plantwide rate	$fill in the blank 1 per direct labor hour
Overhead cost per unit:
Scientific	$fill in the blank 2 per unit
Business	$fill in the blank 3 per unit

2. Compute the overhead cost per unit for each product using departmental rates. In calculating departmental rates, use machine hours for Department 1 and direct labor hours for Department 2. Round departmental rates and the overhead cost per unit to the nearest cent if rounding is required.

Departmental rates:
Department 1	$fill in the blank 4 per machine hour
Department 2	$fill in the blank 5 per direct labor hour
Overhead cost per unit:
Scientific	$fill in the blank 6 per unit
Business	$fill in the blank 7 per unit

Repeat using direct labor hours for Department 1 and machine hours for Department 2. Round departmental rates and the overhead cost per unit to the nearest cent if rounding is required.

Departmental rates:
Department 1	$fill in the blank 8 per direct labor hour
Department 2	$fill in the blank 9 per machine hour
Overhead cost per unit:
Scientific	$fill in the blank 10 per unit
Business	$fill in the blank 11 per unit