puestion 4.2Tuggs Corporation manufactures two products, Racket and Table. Table, having been developed as anattempt to enter a market closely related to that of Racket, has been recently created. Of the twoproducts, Table is the more complex one, thus requiring two and a half hours of direct labour time perunit to manufacture, compared to one hour of direct labour time for Racket. The table is produced onan automated production line.On the basis of direct labour hours, Overhead is currently assigned to the products. The companyestimated it would incur $364,000 in manufacturing overhead costs and produce 4,900 units of Tableand 22,100 units of Racket during the current year. Unit costs for materials and direct labour are asfollows:RacketTableDirect materials$9$20Direct labour57$15Submission Instructions:1. Compute the predetermined overhead rate under the current method of allocation and determinethe unit product cost of each product for the current year.2. The company's overhead costs can be attributed to four major activities. These activities and theamount of overhead cost attributable to each for the current year are given below:Expected ActivityEstimated Overhead Cost$161,000$32,000$81,000$90,000Activity Cost PoolMachine setups requiredRacketTableTotal8007001,500Purchase orders issued200150350Machine hours required3,9007,00010,900Maintenance requests310510820issuedTotal$364,000Determine the unit product cost of each product for the current year using the data above and anactivity-based costing approach.

Activity-based costing is the method in which cost is allocated on the basis of cost driver rates on…

Submission Instructions: 1. Compute the predetermined overhead rate under the current method of allocation and determine the unit product cost of each product for the current year. 2. The company's overhead costs can be attributed to four major activities. These activities and the amount of overhead cost attributable to each for the current year are given below: Activity Cost Pool Machine setups required Expected Activity Total 1,500 Racket Table Estimated Overhead Cost $161,000 $32,000 $81,000 800 700 Purchase orders issued 200 150 350 Machine hours required 3,900 7,000 10,900 Maintenance requests $90,000 310 510 820 issued Total $364,000 Determine the unit product cost of each product for the current year using the data above and an activity-based costing approach.

Submission Instructions: 1. Compute the predetermined overhead rate under the current method of allocation and determine the unit product cost of each product for the current year. 2. The company's overhead costs can be attributed to four major activities. These activities and the amount of overhead cost attributable to each for the current year are given below: Activity Cost Pool Machine setups required Expected Activity Total 1,500 Racket Table Estimated Overhead Cost $161,000 $32,000 $81,000 800 700 Purchase orders issued 200 150 350 Machine hours required 3,900 7,000 10,900 Maintenance requests $90,000 310 510 820 issued Total $364,000 Determine the unit product cost of each product for the current year using the data above and an activity-based costing approach.

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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