TB Problem Qu. 4-205 (Algo) Rondeau, Incorporated, manufactures and sells... 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 Direct Materials Cost. per Unit $293.60 $186.80 The direct labor rate is $27.80 per DLH. The direct materials cost per unit for each product is given below: Activity Cost Pools Labor-related Product testing Order size Expected Production 700 800 The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Traditional unit product cost ABC unit product cost Difference Activity Measures DLHS Tests MHS Direct Labor-Hours Total Direct Per Unit Product V9 13.0 10.0 Estimated Overhead Product M6 Labor-Hours 9,100 8,000 17,100 Cost $ 104,656 77,608 404,000 $ 586,264 Product V9 9,100 1,200 5,900 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.) 8,000 1,600 5,200 Total 17,100 2,800 11,100
TB Problem Qu. 4-205 (Algo) Rondeau, Incorporated, manufactures and sells... 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 Direct Materials Cost. per Unit $293.60 $186.80 The direct labor rate is $27.80 per DLH. The direct materials cost per unit for each product is given below: Activity Cost Pools Labor-related Product testing Order size Expected Production 700 800 The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Traditional unit product cost ABC unit product cost Difference Activity Measures DLHS Tests MHS Direct Labor-Hours Total Direct Per Unit Product V9 13.0 10.0 Estimated Overhead Product M6 Labor-Hours 9,100 8,000 17,100 Cost $ 104,656 77,608 404,000 $ 586,264 Product V9 9,100 1,200 5,900 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.) 8,000 1,600 5,200 Total 17,100 2,800 11,100
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:TB Problem Qu. 4-205 (Algo) Rondeau, Incorporated, manufactures and sells...
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
Labor-Hours
9,100
8,000
17,100
The direct labor rate is $27.80 per DLH. The direct materials cost per unit for each product is given below:
Direct Materials Cost
per Unit
$293.60
$ 186.80
Product V9
Product M6
Activity Cost Pools
Labor-related
Product testing
Order size
Expected
Production
700
800
The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and
expected activity:
Traditional unit product cost
ABC unit product cost
Difference
Activity
Measures
DLHS
Tests
MHS
Direct Labor-Hours Total Direct
Per Unit
Product V9
13.0
10.0
Estimated Overhead
Cost
$ 104,656
77,608
404,000
$ 586,264
Product M6
Product V9
9,100
1,200
5,900
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.)
8,000
1,600
5,200
Total
17,100
2,800
11,100
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