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Business, 24.09.2021 21:20 toricarter00
Escuha Company produces two type of calculators: scientific and business. Both products pass through two producing departments. The business calculator is by far the most popular. The following data have been gathered for these two products:
Product-Related Data
ScientificBusiness
Units produced per year74,000740,000
Prime costs$258,000$2,580,000
Direct labor hours96,200962,000
Machine hours51,200512,000
Production runs100150
Inspection hours2,0003,000
Maintenance hours2,2509,000
Department Data
Department 1Department 2
Direct labor hours:
Scientific calculator74,10022,100
Business calculator134,680827,320
Total208,780849,420
Machine hours:
Scientific calculator26,90024,300
Business calculator435,78076,220
Total462,680100,520
Overhead costs:
Setup costs$223,500$223,500
Inspection costs165,000165,000
Power239,000144,000
Maintenance190,000271,250
Total$817,500$803,750
Required:
1. Compute the overhead cost per unit for each product using a plantwide, unit-based rate using direct labor hours. Round your calculations and answers to the nearest cent.
Plantwide rate$ 1.53 per direct labor hour
Overhead cost per unit:
Scientific$ 1.99 per unit
Business$ 1.99 per unit
2. Compute the overhead cost per unit for each product using departmental rates. In calculating departmental rates, use machine hours for Department 1 and direct labor hours for Department 2. Round departmental rates and the overhead cost per unit to the nearest cent if rounding is required.
Departmental rates:
Department 1$ 1.77 per machine hour
Department 2$ 0.95 per direct labor hour
Overhead cost per unit:
Scientific$ per unit
Business$ per unit
Repeat using direct labor hours for Department 1 and machine hours for Department 2. Round departmental rates and the overhead cost per unit to the nearest cent if rounding is required.
Departmental rates:
Department 1$ per direct labor hour
Department 2$ per machine hour
Overhead cost per unit:
Scientific$ per unit
Business$ per unit
3. Compute the overhead cost per unit for each product using activity-based costing. Round your calculations and answers to the nearest cent.
Overhead Cost
Scientific$ per unit
Business$ per unit
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