12 MedTech Inc, manufactures and sells diagnostic equipment used in the medical profession. Its job costing system was designed using an activity based costing approach. Direct materials and direct labor costs are accumulated separately, along with information concerning for manufacturing overhead cost drivers activities. Assume that the direct labor rate is to per hour and that there were no beginning inventories. The following information was available for 2019, based on an expected production level of 336.842 units for the year 107 point Activity Cost Driver Materials handling Milling and grinding Assembly and inspection Testing Budgeted Costs Cost Driver Used as for 2019 Allocation Base 54,900,000 Number of parts used 8,000,000 Number of machine hours 5,100,000 Direct labor hours worked 1,600,000 Number of units tested Cost Allocation Rate $ 2.75 per part 12.00 per hour 5.75 per hour 4.75 per unit The following production, costs, and activities occurred during the month of August Units Direct Number of Parts Machine Direct Labor Produced/Tested Materials Costs Used Hours Hours 51,000 $3,500,000 285,000 91,000 155,000 Required: e. Calculate the total manufacturing costs and the cost per unit produced and tested during the month of August for MedTech (Round "Cost per unit to 2 decimal places.) Tomanufacturing Cost per un produced and tested b. Which of the following are the advantages of the ABC approach relative to using a single predetermined overhead application rate based on direct labor hours. (Note: You do not have to calculate the overhead that would be applied for the month of August using this alternative method ) (You may select more than one answer. Single click the box with the question mark to produce a check the h w where the A RR ANEUF APARELOFAR Prev 12 of 14 Next > The following production, costs, and activities occurred during the month of August Direct Produced/lested Materials costs 51, 53,500,000 Number of Parts Machine Direct Labor Used H ours Hours 285, 91,00 155,000 Required: a. Calculate the total manufacturing costs and the cost per unit produced and tested during the month of August for Medtech (Round "Cost per unit to 2 decimal places.) Total mentoring cost Cost per un produced and tested b. Which of the following are the advantages of the ABC approach relative to using a single predetermined overhead application rate based on direct labor hours. (Note: You do not have to calculate the overhead that would be applied for the month of August using this alternative method.) (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) ABC does not help in decision-making. 2 ABC systems produce more accurate financial information ABC approach is likely to provide better information to manufacturing managers. 2 ABC helps in decision-making ABC systems produce more accurate product costing information
