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1 (9 points) Saved XChem produces two products: Model X and Model Y. Assume that the overhead information is for the whole year. Also assume
1 (9 points) Saved XChem produces two products: Model X and Model Y. Assume that the overhead information is for the whole year. Also assume that actual information doesn't differ from budgeted information. Activity. Activity Cost Driver Model X Model Y Engineering $287,000 Engineering 1,750 5,250 Hours Setups $ 78,000 Setups 36 84 Machining $480,000 Machine Hours 45,000 15,000 Inspection $ 25,000 Inspection Hours 320 680 Production of Model X is 30,000 units; its total prime cost is $294,000. Production of Model Y is 10,000 units; its total prime cost is $135,000. 1. Determine the unit OH cost for Model Y using the (traditional) ABC model. $_____ (keep 3 decimal places) 2. Determine the unit OH cost for Model Y using the simple costing method. Using machines hours as the cost allocation basis. $ (keep 3 decimal places) 3. Cost accuracy is very important to XChem as it faces strong competition in the industry. Which answer serves the purpose? Answer (1 or 2)? Blank #1 Blank # 2
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