The following information is provided for Crank It Up Corp., a manufacturer of stereo systems. Crank It Up Corp. manufactures two different stereo systems: Feel the Beat model and Hurt My Ears model. Activity Total Budgeted Cost Allocation Base Setup $51,100 Number of setups Machine maintenance $39,900 Number of machine hours Total $91,000 Information Feel the Beat Hurt My Ears Total Units Direct labor hours 1,830 2,400 4,230 Number of setups 290 210 500 Number of machine hours 1,840 1,240 3,080 Crank It Up Corp. plans to produce 470 Feel the Beat systems and for Hurt My Ear systems, 700. (Round your answers to two decimal places when needed and use rounded answers for all future calculations). 1. Compute the ABC indirect manufacturing cost per unit for each product. Activity Total estimated overhead cost / Total estimated quantity of the overhead allocation base = Predetermined Overhead Allocation Rate Setup / = Machine maintenance / = 2. Compute the expected indirect manufacturing cost of each product. Feel the Beat Predetermined Overhead Allocation rate X Actual Quantity of the Allocation Base Used = Allocated Manufacturing Overhead Cost Setup X = Machine Machine maintenance X = Total Manufacturing Overhead Costs Number of products Manufacturing overhead cost per product Hurt My Ears Predetermined Overhead Allocation rate X Actual Quantity of the Allocation Base Used = Allocated Manufacturing Overhead Cost Setup X = Machine Machine maintenance X = Total Manufacturing Overhead Costs Number of products Manufacturing overhead cost per product 3. Compute the indirect manufacturing cost per unit using direct labor hours for the single plantwide predetermined overhead allocation rate. Total estimated overhead cost / Total estimated quantity of the overhead allocation base = Predetermined Overhead Allocation Rate / = Feel the Beat Predetermined Overhead Allocation rate X Actual Quantity of the Allocation Base Used = Allocated Manufacturing Overhead Cost X = Number of products Manufacturing overhead cost per product Hurt My Ears Predetermined Overhead Allocation rate X Actual Quantity of the Allocation Base Used = Allocated Manufacturing Overhead Cost X = Number of products Manufacturing overhead cost per product

The following information is provided for Crank It Up Corp., a manufacturer of stereo systems. Crank It Up Corp. manufactures two different stereo systems: Feel the Beat model and Hurt My Ears model. Activity Total Budgeted Cost Allocation Base Setup $51,100 Number of setups Machine maintenance $39,900 Number of machine hours Total $91,000 Information Feel the Beat Hurt My Ears Total Units Direct labor hours 1,830 2,400 4,230 Number of setups 290 210 500 Number of machine hours 1,840 1,240 3,080 Crank It Up Corp. plans to produce 470 Feel the Beat systems and for Hurt My Ear systems, 700. (Round your answers to two decimal places when needed and use rounded answers for all future calculations). 1. Compute the ABC indirect manufacturing cost per unit for each product. Activity Total estimated overhead cost / Total estimated quantity of the overhead allocation base = Predetermined Overhead Allocation Rate Setup / = Machine maintenance / = 2. Compute the expected indirect manufacturing cost of each product. Feel the Beat Predetermined Overhead Allocation rate X Actual Quantity of the Allocation Base Used = Allocated Manufacturing Overhead Cost Setup X = Machine Machine maintenance X = Total Manufacturing Overhead Costs Number of products Manufacturing overhead cost per product Hurt My Ears Predetermined Overhead Allocation rate X Actual Quantity of the Allocation Base Used = Allocated Manufacturing Overhead Cost Setup X = Machine Machine maintenance X = Total Manufacturing Overhead Costs Number of products Manufacturing overhead cost per product 3. Compute the indirect manufacturing cost per unit using direct labor hours for the single plantwide predetermined overhead allocation rate. Total estimated overhead cost / Total estimated quantity of the overhead allocation base = Predetermined Overhead Allocation Rate / = Feel the Beat Predetermined Overhead Allocation rate X Actual Quantity of the Allocation Base Used = Allocated Manufacturing Overhead Cost X = Number of products Manufacturing overhead cost per product Hurt My Ears Predetermined Overhead Allocation rate X Actual Quantity of the Allocation Base Used = Allocated Manufacturing Overhead Cost X = Number of products Manufacturing overhead cost per product

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 35P: The Bienestar Cardiology Clinic has two major activities: diagnostic and treatment. The two...

See similar textbooks

Related questions

Concept explainers

Question

The following information is provided for Crank It Up Corp., a manufacturer of stereo systems. Crank It Up Corp. manufactures two different stereo systems: Feel the Beat model and Hurt My Ears model.

Activity	Total Budgeted Cost	Allocation Base
Setup	$51,100	Number of setups
Machine maintenance	$39,900	Number of machine hours
Total	$91,000

Information	Feel the Beat	Hurt My Ears	Total Units
Direct labor hours	1,830	2,400	4,230
Number of setups	290	210	500
Number of machine hours	1,840	1,240	3,080

Crank It Up Corp. plans to produce 470 Feel the Beat systems and for Hurt My Ear systems, 700.

(Round your answers to two decimal places when needed and use rounded answers for all future calculations).

1. Compute the ABC indirect manufacturing cost per unit for each product.

Activity	Total estimated overhead cost	/	Total estimated quantity of the overhead allocation base	=	Predetermined Overhead Allocation Rate
Setup		/		=
Machine maintenance		/		=

2. Compute the expected indirect manufacturing cost of each product.

Feel the Beat	X	=
Setup	X	=
Machine Machine maintenance	X	=
		Total Manufacturing Overhead Costs
		Number of products
		Manufacturing overhead cost per product

Hurt My Ears	X	=
Setup	X	=
Machine Machine maintenance	X	=
		Total Manufacturing Overhead Costs
		Number of products
		Manufacturing overhead cost per product

3. Compute the indirect manufacturing cost per unit using direct labor hours for the single plantwide predetermined overhead allocation rate.

Total estimated overhead cost	/	Total estimated quantity of the overhead allocation base	=	Predetermined Overhead Allocation Rate
	/		=

Feel the Beat

Predetermined Overhead Allocation rate	X	Actual Quantity of the Allocation Base Used	=	Allocated Manufacturing Overhead Cost
	X		=
			Number of products
			Manufacturing overhead cost per product

Hurt My Ears

Predetermined Overhead Allocation rate	X	Actual Quantity of the Allocation Base Used	=	Allocated Manufacturing Overhead Cost
	X		=
			Number of products
			Manufacturing overhead cost per product

Expert Solution

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.