Tent Master produces Pup tents and Pop-up tents. The company budgets $276,000 of overhead cost and 46,000 direct labor hours. Additional information follows. Per Unit Selling Price Direct Materials Pup tent Pop-up tent $ 90 85 $ 24 29 Direct Labor $ 51 32 Activity Budgeted Cost Assembly Electricity Materials purchasing $ 184,000 28,000 64,000 Activity Cost Driver Direct labor hours (DLH) Machine hours (MH) Purchase orders (PO) Budgeted Activity Usage 46,000 10,000 500 $ 276,000 ces Total Required: 1. Compute an activity rate for each activity using activity-based costing. 2. The following actual activity usage produced 10,000 Pup tents and 5,000 Pop-up tents. Allocate overhead cost to Pup tents and to Pop-up tents and compute overhead cost per unit for each product. Activity Cost Driver Direct labor hours(DLH) Machine hours (MH) Purchase orders (PO) Activity Usage Pup tents 32,000 Pop-up tents 14,000 3,500 200 6,500 300 3. Compute product cost per unit for Pup tents and for Pop-up tents. 4. For each product, compute the gross profit per unit (selling price per unit minus the product cost per unit).
Tent Master produces Pup tents and Pop-up tents. The company budgets $276,000 of overhead cost and 46,000 direct labor hours. Additional information follows. Per Unit Selling Price Direct Materials Pup tent Pop-up tent $ 90 85 $ 24 29 Direct Labor $ 51 32 Activity Budgeted Cost Assembly Electricity Materials purchasing $ 184,000 28,000 64,000 Activity Cost Driver Direct labor hours (DLH) Machine hours (MH) Purchase orders (PO) Budgeted Activity Usage 46,000 10,000 500 $ 276,000 ces Total Required: 1. Compute an activity rate for each activity using activity-based costing. 2. The following actual activity usage produced 10,000 Pup tents and 5,000 Pop-up tents. Allocate overhead cost to Pup tents and to Pop-up tents and compute overhead cost per unit for each product. Activity Cost Driver Direct labor hours(DLH) Machine hours (MH) Purchase orders (PO) Activity Usage Pup tents 32,000 Pop-up tents 14,000 3,500 200 6,500 300 3. Compute product cost per unit for Pup tents and for Pop-up tents. 4. For each product, compute the gross profit per unit (selling price per unit minus the product cost per unit).
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 2PB: Five Card Draw manufactures and sells 10,000 units of Aces, which retails for $200, and 8,000 units...
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Transcribed Image Text:Tent Master produces Pup tents and Pop-up tents. The company budgets $276,000 of overhead cost and 46,000 direct
labor hours. Additional information follows.
Per Unit
Selling Price Direct Materials
Pup tent
Pop-up tent
$ 90
85
$ 24
29
Direct Labor
$ 51
32
Activity
Budgeted Cost
Assembly
Electricity
Materials purchasing
$ 184,000
28,000
64,000
Activity Cost Driver
Direct labor hours (DLH)
Machine hours (MH)
Purchase orders (PO)
Budgeted
Activity Usage
46,000
10,000
500
$ 276,000
ces
Total
Required:
1. Compute an activity rate for each activity using activity-based costing.
2. The following actual activity usage produced 10,000 Pup tents and 5,000 Pop-up tents. Allocate overhead cost to Pup tents and
to Pop-up tents and compute overhead cost per unit for each product.
Activity Cost Driver
Direct labor hours(DLH)
Machine hours (MH)
Purchase orders (PO)
Activity Usage
Pup tents
32,000
Pop-up tents
14,000
3,500
200
6,500
300
3. Compute product cost per unit for Pup tents and for Pop-up tents.
4. For each product, compute the gross profit per unit (selling price per unit minus the product cost per unit).
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