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abc method Exercise 5-7A Comparing an ABC system with a traditional costing system LO 5-3 Snowden Industries produces two electronic decoders, P and Q. Decoder
abc method Exercise 5-7A Comparing an ABC system with a traditional costing system LO 5-3 Snowden Industries produces two electronic decoders, P and Q. Decoder P is more sophisticated an requires more programming and testing than does Decoder Q. Because of these product differences company wants to use activity-based costing to allocate overhead costs. It has identified four activity pools. Relevant information follows: Cost Pool Total $103,500 Activity Pools Cost Driver Repair and maintenance on assembly tachine Programming cost Software inspections Product testing Total overhead cost Number of units, produced 120,500Number of programming hours 18,000 Number of inspections 22,000 Number of tests $264,000 Expected activity for each product follows: Number of Number of Programming Decoder P Decoder o Total Units 13,500 Hours 1,500 Inspections Tests 1,120 880 152 48 45,000 2,500 2,000 Check my work 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 o Total Direct Labor Hours 7,200 16,800 24,000 Required a. Compute the amount of overhead cost allocated to each type of decoder when using direct labor hours b. Determine the cost per unit for overhead when using directlabor hours as the allocation base and as the allocation base. when using ABC Complete this question by entering your answers in the tabs below. Required A Requlred B Determine the cost per unit for overhead when using direct labor hours as the allocation base and when using A intermediate caleulations and final answers to 2 decimal places) Cost per unit b. Determine the cost per unit for overhead when using direct labor hours as the allocation base and when using ABC Compiete this question by entering your answers in the tabs beiow. Required A Required B Determine the cost per unit for overhead when using direct labor hours as the allocation base and when usin intermediate calculations and final answers to 2 decimal places.) Cost per unit Method ABC Labor hours Decoder P Decoder Q 5.87 5.87 Required A
abc method
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