Zhedong Electronics Company in Hangzhou, China, plans to use activity-based costing to determine its product costs. It presently uses a single plantwide factory overhead rate for allocating factory overhead to products, based on direct labor hours. The total factory overhead cost is as follows (currency unit in Chinese RMB, \): Department Factory Overhead Production Support Production (factory overhead only) Total cost ¥1,225,000 175,000 ¥1,400,000 The company determined that it performed four major activities in the Production Support Department. The budgeted activity costs are as follows: Production Support Department Budgeted Activity Cost *428,750 245,000 183,750 367,500 ¥1,225,000 Setup Production control Quality control Materials management Total Zhedong estimated the following activity-base usage and units produced for each of its three products: Number of Direct Production Material Products Labor Hrs. Setups Orders Requisitions Units Inspections LCD TV... Tablet.... Smartphone.. 10,000 25,000 80 80 35 320 2,000 10,000 40 40 40 400 50,000 62,000 140,000 175,000 5 125 30 Total cost 125 75 750 Instructions 1. Determine the factory overhead cost per unit for the LCD TV, tablet, and smartphone under the single plantwide factory overhead rate method. Use direct labor hours as the activity base.
Zhedong Electronics Company in Hangzhou, China, plans to use activity-based costing to determine its product costs. It presently uses a single plantwide factory overhead rate for allocating factory overhead to products, based on direct labor hours. The total factory overhead cost is as follows (currency unit in Chinese RMB, \): Department Factory Overhead Production Support Production (factory overhead only) Total cost ¥1,225,000 175,000 ¥1,400,000 The company determined that it performed four major activities in the Production Support Department. The budgeted activity costs are as follows: Production Support Department Budgeted Activity Cost *428,750 245,000 183,750 367,500 ¥1,225,000 Setup Production control Quality control Materials management Total Zhedong estimated the following activity-base usage and units produced for each of its three products: Number of Direct Production Material Products Labor Hrs. Setups Orders Requisitions Units Inspections LCD TV... Tablet.... Smartphone.. 10,000 25,000 80 80 35 320 2,000 10,000 40 40 40 400 50,000 62,000 140,000 175,000 5 125 30 Total cost 125 75 750 Instructions 1. Determine the factory overhead cost per unit for the LCD TV, tablet, and smartphone under the single plantwide factory overhead rate method. Use direct labor hours as the activity base.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Zhedong Electronics Company in Hangzhou, China, plans to use activity-based costing to
determine its product costs. It presently uses a single plantwide factory overhead rate for
allocating factory overhead to products, based on direct labor hours. The total factory
overhead cost is as follows (currency unit in Chinese RMB, ¥):
Department Factory Overhead
Production Support
Production (factory overhead only)
Total cost
¥1,225,000
175,000
¥1,400,000
The company determined that it performed four major activities in the Production Support
Department. The budgeted activity costs are as follows:
Production Support Department Budgeted Activity Cost
Setup
Production control
*428,750
245,000
183,750
367,500
¥1,225,000
Quality control
Materials management
Total
Zhedong estimated the following activity-base usage and units produced for each of its three
products:
Number of
Direct
Production
Material
Products
Units
Labor Hrs.
Setups
Orders
Inspections
Requisitions
LCD TV..
10,000
2,000
50,000
62,000
25,000
80
80
35
320
Tablet...
10,000
40
40
40
400
Smartphone..
Total cost.
140,000
5
30
175,000
125
125
75
750
Instructions
1. Determine the factory overhead cost per unit for the LCD TV, tablet, and smartphone
under the single plantwide factory overhead rate method. Use direct labor hours as the
activity base.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
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.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education