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1 10 points Skipped Green Furniture (GF) manufactures a variety of furniture for household use and just two items for office use: desks and cabinets.
1 10 points Skipped Green Furniture (GF) manufactures a variety of furniture for household use and just two items for office use: desks and cabinets. The production process for desks and cabinets is similar, although machines must be retooled for each product. Both materials and labour costs are directly traceable to individual products; however, overhead is a common cost and allocated using direct labour-hours as the allocation base. GF's accountant is considering the use of activity-based costing (ABC) and has suggested evaluating the system by applying it to the two office use products (desks and cabinets). The following data are available for a typical quarter. Activity Cost Pool Parts receipts Machining Assembly eBook Quality control Direct materials Direct labour Activity Base Number of parts. Machine-hours Units produced Units tested Activity Rate $ 1.00 per part $15.00 per machine-hour. $ 1.40 per unit $ 2.00 per unit Desks Activity Usage 215 machine-hours 2,100 parts 1,050 units 105 units $ 5,250 $12,600 Cabinets 1,450 parts 315 machine-hours 1,450 units 1,350 units $ 2,900 $12,600 Print References Each product consumed 630 direct labour-hours. Required: 1. Determine the total manufacturing cost and cost per unit for each of the two product lines for the quarter, using activity-based costing to allocate overhead costs. (Round "Cost per unit" answers to 2 decimal places.) Desks Cabinets Total manufacturing cost Cost per unit 2. Redo the above using direct labour-hours as the allocation base. (Round "Cost per unit" answers to 2 decimal places.) Desks Cabinets Total manufacturing cost Cost per unit 3. This part of the question is not part of your Connect assignment. 4. This part of the question is not part of your Connect assignment
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