Required information [The following information applies to the questions displayed below.) Benton Corporation manufactures computer microphones, which come in two models: Standard and Premium. Data for a representative quarter for the two models follow: Units produced Production runs per quarter Direct materials cost per unit Direct labor cost per unit Standard 11,280 50 Premium 2,800 25 $ 30 50 $ 54 75 Manufacturing overhead in the plant has three main functions: supervision, setup labor, and incoming material inspection. Data on manufacturing overhead for a representative quarter follow: Supervision Setup labor Incoming inspection Total overhead $ 231,000 257,258 193,200 $ 681,150 Show Transcribed Text D C Required: a. Benton currently applies overhead on the basis of direct labor cost. What is the predetermined overhead rate for the quarter? b. The CFO and the plant controller at Benton are thinking of adopting an ABC system. They have tentatively chosen the following cost drivers: direct labor cost for supervision, production runs for setup labor, and direct material dollars for incoming inspection. Compute the cost driver rates for the proposed system at Benton. Note: Enter your answers rounded to 2 decimal places. a. Overhead rate b. Supervision b. Satup labor b. Incoming inspection % of direct labor cost % of direct labor cost par production nun % of direct material cost Show Transcribed Text
Required information [The following information applies to the questions displayed below.) Benton Corporation manufactures computer microphones, which come in two models: Standard and Premium. Data for a representative quarter for the two models follow: Units produced Production runs per quarter Direct materials cost per unit Direct labor cost per unit Standard 11,280 50 Premium 2,800 25 $ 30 50 $ 54 75 Manufacturing overhead in the plant has three main functions: supervision, setup labor, and incoming material inspection. Data on manufacturing overhead for a representative quarter follow: Supervision Setup labor Incoming inspection Total overhead $ 231,000 257,258 193,200 $ 681,150 Show Transcribed Text D C Required: a. Benton currently applies overhead on the basis of direct labor cost. What is the predetermined overhead rate for the quarter? b. The CFO and the plant controller at Benton are thinking of adopting an ABC system. They have tentatively chosen the following cost drivers: direct labor cost for supervision, production runs for setup labor, and direct material dollars for incoming inspection. Compute the cost driver rates for the proposed system at Benton. Note: Enter your answers rounded to 2 decimal places. a. Overhead rate b. Supervision b. Satup labor b. Incoming inspection % of direct labor cost % of direct labor cost par production nun % of direct material cost Show Transcribed Text
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Required information
[The following information applies to the questions displayed below.)
Benton Corporation manufactures computer microphones, which come in two models: Standard and Premium. Data
for a representative quarter for the two models follow:
Units produced
Production runs per quarter
Direct materials cost per unit
Direct labor cost per unit
Standard
11,280
50
Premium
2,800
25
$ 30
50
$ 54
75
Manufacturing overhead in the plant has three main functions: supervision, setup labor, and incoming material
inspection. Data on manufacturing overhead for a representative quarter follow:
Supervision
Setup labor
Incoming inspection
Total overhead
$ 231,000
257,258
193,200
$ 681,150
Show Transcribed Text
Required:
a. Benton currently applies overhead on the basis of direct labor cost. What is the predetermined overhead rate for the quarter?
b. The CFO and the plant controller at Benton are thinking of adopting an ABC system. They have tentatively chosen the following
cost drivers: direct labor cost for supervision, production runs for setup labor, and direct material dollars for incoming inspection.
Compute the cost driver rates for the proposed system at Benton.
Note: Enter your answers rounded to 2 decimal places.
a. Overhead rate
b. Supervision
b. Satup labor
b. Incoming inspection
% of direct labor cost
% of direct labor cost
par production nun
% of direct material cost
Show Transcribed Text
ა
Required:
a. Compute the unit costs for the two products, Standard and Premium, using the current costing system et Benton (using direct labor
costs as the allocation besis for overheed).
b. Compute the unit costs for the two products, Standard and Premium, using the proposed ABC system et Benton.
Note: For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places.
a. Using current casting system
b. Using proposed ADC system
Unit cost
Standard
Premium
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Step 1: Introduce to predetermined overhead rate
VIEWStep 2: Working for total direct material cost and total direct labor cost
VIEWStep 3: Working for overhead rate and unit cost of products using current costing system
VIEWStep 4: Working for overhead rate and unit cost of products using ABC system
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