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Rondeau, Incorporated, manufactures and sells two products: Product V9 and Product M6. Data concerning the expected productio of each product and the expected total direct labor-hours (DLHS) required to produce that output appear below: Product V9 Product M6 Total direct labor-hours Product V9 Product M6 $ 289.60 $ 182.80 Expected Production 620 728 The direct labor rate is $27.00 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit Activity Cost Pools Labor-related Direct Labor-Hours Per Unit 12.2 9.2 The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Total Direct Labor-Hours 7,564 6,624 14,188 Activity Measures Estimated Overhead Cost DLHS $ 182,656 Product V9 7,564 Expected Activity Product M6 6,624 Total 14,188

Rondeau, Incorporated, manufactures and sells two products: Product V9 and Product M6. Data concerning the expected productio of each product and the expected total direct labor-hours (DLHS) required to produce that output appear below: Product V9 Product M6 Total direct labor-hours Product V9 Product M6 $ 289.60 $ 182.80 Expected Production 620 728 The direct labor rate is $27.00 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit Activity Cost Pools Labor-related Direct Labor-Hours Per Unit 12.2 9.2 The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Total Direct Labor-Hours 7,564 6,624 14,188 Activity Measures Estimated Overhead Cost DLHS $ 182,656 Product V9 7,564 Expected Activity Product M6 6,624 Total 14,188

FINANCIAL ACCOUNTING
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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Rondeau, Incorporated, manufactures and sells two products: Product V9 and Product M6. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Product V9 Product M6 Total direct labor-hours Product V9 Product M6 The direct labor rate is $27.00 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit $ 289.60 $ 182.80 Activity Cost Pools Labor-related Product testing Order size Expected Production 620 720 Traditional unit product cost ABC unit product cost Difference The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Activity Measures DLHS Tests MHS Direct Labor-Hours Per Unit Product V9 12.2 9.2 Total Direct Labor-Hours 7,564 6,624 14, 188 Estimated Overhead Cost $ 102,656 76,008 400,000 $ 578,664 Product M6 Product V9 7,564 1,080 5,500 Expected Activity Product M6 Required: Calculate the difference between the unit product costs under the traditional costing method and the activity-based costing system for each of the two products. (Round your Intermediate calculations and final answers to 2 decimal places. Enter your answers as positive values.) 6,624 1,440 4,880 Total 14, 188 2,520 10,380
Transcribed Image Text:Rondeau, Incorporated, manufactures and sells two products: Product V9 and Product M6. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Product V9 Product M6 Total direct labor-hours Product V9 Product M6 The direct labor rate is $27.00 per DLH. The direct materials cost per unit for each product is given below: Direct Materials Cost per Unit $ 289.60 $ 182.80 Activity Cost Pools Labor-related Product testing Order size Expected Production 620 720 Traditional unit product cost ABC unit product cost Difference The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Activity Measures DLHS Tests MHS Direct Labor-Hours Per Unit Product V9 12.2 9.2 Total Direct Labor-Hours 7,564 6,624 14, 188 Estimated Overhead Cost $ 102,656 76,008 400,000 $ 578,664 Product M6 Product V9 7,564 1,080 5,500 Expected Activity Product M6 Required: Calculate the difference between the unit product costs under the traditional costing method and the activity-based costing system for each of the two products. (Round your Intermediate calculations and final answers to 2 decimal places. Enter your answers as positive values.) 6,624 1,440 4,880 Total 14, 188 2,520 10,380
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