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 $50,100 Number of setups Machine maintenance $40,200 Number of machine hours Total $90,300     Information Feel the Beat Hurt My Ears Total Units Direct labor hours 1,710 2,200 3,910 Number of setups 260 200 460 Number of machine hours 1,690 1,080 2,770   Crank It Up Corp. plans to produce 520 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

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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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 $50,100 Number of setups
Machine maintenance $40,200 Number of machine hours
Total $90,300  

 

Information Feel the Beat Hurt My Ears Total Units
Direct labor hours 1,710 2,200 3,910
Number of setups 260 200 460
Number of machine hours 1,690 1,080 2,770

 

Crank It Up Corp. plans to produce 520 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  
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