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4 value: 10.00 points Precision Manufacturing Inc. (PMI) makes two types of industrial component parts-the EX300 and the TX500. annually produces 54,000 units of EX300
4 value: 10.00 points Precision Manufacturing Inc. (PMI) makes two types of industrial component parts-the EX300 and the TX500. annually produces 54,000 units of EX300 and 11,900 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: EX300 Total Direct materials Direct labor TX500 $360,325 $156,550$516,875 $114,000 39,500 $153,500 The company is considering implementing an activity-based costing system that distributes all of its manufacturing overhead to four activities as shown below Activity Activity Cost Pool (and Activity Measure) Manufacturing Overhead TX500 59,500 240 Total EX300 84,000 45 $179,37:5 Machining (machine-hours) Setups (setup hours) Product-level (number of products) General factory (direct labor dollars) 143,500 285 96,900 78,310 44,515 $114,000 $ 39,500 $153,500 Total manufacturing overhead cost $ 399,100
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