Setup costs for Weird Al’s two different accordion products: The Polka, and The Super amounted to $9,000. Each product has the same number of set-ups. Weird Al used 6,000 labor hours to product The Polka, and 12,000 labor hours to produce The Super. Weird Al currently applies all overhead based on direct labors hours. However, after taking BUADA 2050 Weird Al is considering switching to activity based costing. What is the impact? The Polka is (indicate under or over-costed) by $__________ under traditional costing. The Super is _____________(indicate under or over-costed) by $__________ under traditional costing.

Setup costs are charged to both products under Activity Based Costing = $9000/2…

Answered: Setup costs for Weird Al’s two…

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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Setup costs for Weird Al’s two different accordion products: The Polka, and The Super amounted to $9,000. Each product has the same number of set-ups. Weird Al used 6,000 labor hours to product The Polka, and 12,000 labor hours to produce The Super. Weird Al currently applies all overhead based on direct labors hours. However, after taking BUADA 2050 Weird Al is considering switching to activity based costing. What is the impact?

The Polka is (indicate under or over-costed) by $__________ under traditional costing.

The Super is _____________(indicate under or over-costed) by $__________ under traditional costing.

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