Required information Exercise 9-38 and 9-39 (Static) Skip to question Upriver Parts manufactures two products, V-1 and V-2, at its River Plant. Selected data for an average month for the two products follow. V-1 V-2 Units produced 10,000 1,000 Direct materials cost per unit $ 2 $ 4 Machine hours per unit 1 2 Production runs per month 80 40 Production at the plant is automated and any labor cost is included in overhead. Data on manufacturing overhead at the plant follow. Machine depreciation $ 36,000 Setup labor 18,000 Material handling 14,400 Total $ 68,400 Exercise 9-39 (Static) Activity-Based Costing (LO 9-3, 5) Required: a. Compute the unit costs for the two products V-1 and V-2 using the current costing system at Upriver (using machine hours as the allocation basis). (Do not round intermediate calculations. Round your answers to 2 decimal places.) b. Compute the unit costs for the two products V-1 and V-2 using the proposed ABC system at Upriver. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Required information
Exercise 9-38 and 9-39 (Static)
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Upriver Parts manufactures two products, V-1 and V-2, at its River Plant. Selected data for an average month for the two products follow.
| V-1 | V-2 | |||||
| Units produced | 10,000 | 1,000 | ||||
| Direct materials cost per unit | $ | 2 | $ | 4 | ||
| Machine hours per unit | 1 | 2 | ||||
| Production runs per month | 80 | 40 | ||||
Production at the plant is automated and any labor cost is included in
| Machine |
$ | 36,000 | |
| Setup labor | 18,000 | ||
| Material handling | 14,400 | ||
| Total | $ | 68,400 | |
Exercise 9-39 (Static) Activity-Based Costing (LO 9-3, 5)
a. Compute the unit costs for the two products V-1 and V-2 using the current costing system at Upriver (using machine hours as the allocation basis). (Do not round intermediate calculations. Round your answers to 2 decimal places.)
b. Compute the unit costs for the two products V-1 and V-2 using the proposed ABC system at Upriver. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
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