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2 10 points Snowden Industries produces two electronic decoders, P and Q. Decoder P is more sophisticated and requires more programming and testing than
2 10 points Snowden Industries produces two electronic decoders, P and Q. Decoder P is more sophisticated and requires more programming and testing than does Decoder Q. Because of these product differences, the company wants to use activity-based costing to allocate overhead costs. It has identified four activity pools. Relevant information follows: Activity Pools Repair and maintenance on assembly machine Programming cost Software inspections Product testing Cost Pool Total Cost Driver Number of units produced Number of programming hours Number of inspections $ 104,000 168,000 12,000 16,000 Number of tests $ 300,000 eBook Total overhead cost Print Expected activity for each product follows: Number of Number of Programming Number of Number of References Units Hours Inspections Tests Decoder P Decoder Q 16,000 2,000 190 1,400 36,000 1,500 60 1,100 Total 52,000 3,500 250 2,500 Assume that before shifting to activity-based costing, Snowden Industries allocated all overhead costs based on direct labor hours. Direct labor data pertaining to the two decoders follow: Decoder P Decoder Q Total Required Direct Labor Hours 8,000 16,000 24,000 a. Compute the amount of overhead cost allocated to each type of decoder when using direct labor hours as the allocation base. b. Determine the cost per unit for overhead when using direct labor hours as the allocation base and when using ABC. Complete this question by entering your answers in the tabs below. Required A Required B Compute the amount of overhead cost allocated to each type of decoder when using direct labor hours as the allocation base. Note: Round intermediate calculations to 2 decimal places. Allocated Cost Decoder P Decoder Q Total Required A Required B Determine the cost per unit for overhead when using direct labor hours as the allocation base and when using ABC. Note: Round intermediate calculations and final answers to 2 decimal places. Cost per unit Method Decoder P Decoder Q ABC Labor hours
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