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5) Brilliant Accents Company manufactures and sells three styles of kitchen faucets: Brass, Chrome, and White. Production takes 25, 25, and 10 machine hours to
5) Brilliant Accents Company manufactures and sells three styles of kitchen faucets: Brass, Chrome, and White. Production takes 25, 25, and 10 machine hours to manufacture ,000-unit batches of brass, chrome, and white faucets, respectively. The following additional data apply BRASS CHROME WHITE 50,000 40,000 Projected sales in units 30,000 $20 Selling price $40 $30 Direct materials Direct labor Overhead cost based on direct labor hours $15 $ 9 $9 (traditional system) $12 3 40 25 10 25 0.5 20 30 10 1.0 20 Direct labor hours Machine hours Setup hours Inspection hours 30 Total overhead costs and activity levels for the year are estimated as follows: Activity Direct labor hours Machine hours Setups Inspections Activity levels 2,900 hours 2,400 hours 95 setup hours 2,700 inspection hours $465,500 $405,000 $870.500 Required: Using the traditional system, determine the operating profit per unit for the brass style of faucet Determine the activity-cost-driver rate for setup costs and inspection costs Using the ABC system, for the brass style of faucet a. b. c. 1. compute the estimated overhead costs per unit
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