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1-a. Compute the plantwide overhead rate that would be used in the companys conventional cost system. 1-b. Using the plantwide rate, compute the unit product
1-a. Compute the plantwide overhead rate that would be used in the companys conventional cost system.
1-b. Using the plantwide rate, compute the unit product cost for each product.
2-a. Compute the activity rate for each activity cost pool.
2-b. Using the activity rates, compute the unit product cost for each product.
Precision Manufacturing Incorporated (PMI) makes two types of industrial component parts-the EX 300 and the TX500. It annually produces 63,000 units of EX 300 and 12,800 units of TX500. The company's conventional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labor dollars as the allocation base. Additional information relating to the company's two product lines is shown below: The company is considering implementing an activity-based costing system that distributes all of its manufacturing overhead to four activities as shown below: Required: 1-a. Compute the plantwide overhead rate that would be used in the company's conventional cost system. 1-b. Using the plantwide rate, compute the unit product cost for each product. 2-a. Compute the activity rate for each activity cost pool. 2-b. Usina the activitv rates combute the unit droduct cost for each broductStep by Step Solution
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