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Stillicum Corporation makes ultra light-weight backpacking tents. Data concerning the company's two product lines appear below: Direct materials per unit Direct labor per unit Direct labor-hours per unit Estimated annual production De luxe Estimated total manufacturing overhead Estimated total direct labor-hours $ 67.00 $ 25.00 0.70 DLHS 10,000 units Standard $ 55.00 $ 20.40 1.40 DLHS 50,000 units The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below: $ 505,000 77,000 DLHs Required: 1. Determine the unit product costs of the Deluxe and Standard products under the company's traditional costing system. 2. The company is considering replacing its traditional costing system with an activity-based absorption costing system that would have the following three activity cost pools: Estimated Overhead Cost $ 308,000 129,000 68,000 $ 505,000 Deluxe 7,000 200 30 Expected Activity Activity Cost Pools (and Activity Measures) Supporting direct labor (direct labor-hours) Batch setups (setups) Safety testing (tests) Total manufacturing overhead cost Determine the unit product costs of the Deluxe and Standard products under the activity-based absorption costing system. Standard 70,000 100 70 Total 77,000 300 100

Stillicum Corporation makes ultra light-weight backpacking tents. Data concerning the company's two product lines appear below: Direct materials per unit Direct labor per unit Direct labor-hours per unit Estimated annual production De luxe Estimated total manufacturing overhead Estimated total direct labor-hours $ 67.00 $ 25.00 0.70 DLHS 10,000 units Standard $ 55.00 $ 20.40 1.40 DLHS 50,000 units The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below: $ 505,000 77,000 DLHs Required: 1. Determine the unit product costs of the Deluxe and Standard products under the company's traditional costing system. 2. The company is considering replacing its traditional costing system with an activity-based absorption costing system that would have the following three activity cost pools: Estimated Overhead Cost $ 308,000 129,000 68,000 $ 505,000 Deluxe 7,000 200 30 Expected Activity Activity Cost Pools (and Activity Measures) Supporting direct labor (direct labor-hours) Batch setups (setups) Safety testing (tests) Total manufacturing overhead cost Determine the unit product costs of the Deluxe and Standard products under the activity-based absorption costing system. Standard 70,000 100 70 Total 77,000 300 100

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Stillicum Corporation makes ultra light-weight backpacking tents. Data concerning the company's two product lines appear below: Direct materials per unit Direct labor per unit Direct labor-hours per unit Estimated annual production Estimated total manufacturing overhead Estimated total direct labor-hours Deluxe $ 67.00 $ 25.00 Activity Cost Pools (and Activity Measures) Supporting direct labor (direct labor-hours) 0.70 DLHS 10,000 units Standard $ 55.00 $ 20.40 The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below: 1.40 DLHS 50,000 units $ 505,000 77,000 DLHS Required: 1. Determine the unit product costs of the Deluxe and Standard products under the company's traditional costing system. 2. The company is considering replacing its traditional costing system with an activity-based absorption costing system that would have the following three activity cost pools: Estimated Overhead Cost $ 308,000 129,000 68,000 $ 505,000 Deluxe 7,000 200 30 Expected Activity Standard 70,000 100 70 Total 77,000 300 100 Batch setups (setups) Safety testing (tests) Total manufacturing overhead cost Determine the unit product costs of the Deluxe and Standard products under the activity-based absorption costing system.
Transcribed Image Text:Stillicum Corporation makes ultra light-weight backpacking tents. Data concerning the company's two product lines appear below: Direct materials per unit Direct labor per unit Direct labor-hours per unit Estimated annual production Estimated total manufacturing overhead Estimated total direct labor-hours Deluxe $ 67.00 $ 25.00 Activity Cost Pools (and Activity Measures) Supporting direct labor (direct labor-hours) 0.70 DLHS 10,000 units Standard $ 55.00 $ 20.40 The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below: 1.40 DLHS 50,000 units $ 505,000 77,000 DLHS Required: 1. Determine the unit product costs of the Deluxe and Standard products under the company's traditional costing system. 2. The company is considering replacing its traditional costing system with an activity-based absorption costing system that would have the following three activity cost pools: Estimated Overhead Cost $ 308,000 129,000 68,000 $ 505,000 Deluxe 7,000 200 30 Expected Activity Standard 70,000 100 70 Total 77,000 300 100 Batch setups (setups) Safety testing (tests) Total manufacturing overhead cost Determine the unit product costs of the Deluxe and Standard products under the activity-based absorption costing system.
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