ACCT245 The question is given below.
Siegel Company manufactures a product that is available in both a deluxe model and a regular model. The company has manufactured the regular model for years. The deluxe model was introduced several years ago to tap a new segment ofthe market. Since introduction ofthe deluxe model. the company's profits have steadily declined and management has become increasingly concerned about the accuracy ofits costing system. Sales ofthe deluxe model have been increasing rapidly. Manufacturing overhead is assigned to products on the basis of direct laborrhours. For the current year, the company has estimated that it will incur $6,233.400 in manufacturing overhead cost and produce 14,000 units of the deluxe model and 118,000 units of the regular model. The deluxe model requires 0.6 hours of direct labor time per unit, and the regular model requires 0.3 hour. Material and labor costs per unit are as follows: Model Deluxe Regular Direct materials 55 155 $ 114 Direct labor $ 13 $ 8 Required: 17a. Using direct laborihours as the base for assigning manufacturing overhead cost to products, compute the predetermined overhead rate. 1b. Using the predetermined overhead rate computed in 1a above and other data from the problem, determine the unit product cost of each model. 2. Management is considering using activitybased absorption costing to apply manufacturing overhead cost to products. The activity based system would have the following four activity cost pools: Estimated Activity Cost Pool Activity Measure Overhead Cost Purchasing Purchase orders issued $ 257,256 Processing Machineihour's 3,937,583 Scraplrework Scrapfrework orders issued 727,653 Shipping Number of shipments 1,311,906 $6,233,493 Expected Activity Activity Measure Deluxe Regular Total Purchase orders issued 490 980 1, 470 Machine-hours 21, 000 31, 500 52,500 Scrap/rework orders issued 550 440 990 Number of shipments 5,520 8, 280 13, 800 Determine the predetermined overhead rate for each of the four activity cost pools. 3. Using the predetermined overhead rates you computed in part (2), do the following: a. Compute the total amount of manufacturing overhead cost that would be applied to each model using the activity-based absorption costing system. After these totals have been computed, determine the amount of manufacturing overhead cost per unit of each model. b. Compute the unit product cost of each model (including direct materials, direct labor, and manufacturing overhead). Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Req 3A Req 3B Using direct labor-hours as the base for assigning manufacturing overhead cost to products, compute the predetermined overhead rate. (Round your answer to 2 decimal places.)costing system. After thiese toldis Have been computed, determine the amount of manufacturing overTread Cost per unit Of model. b. Compute the unit product cost of each model (including direct materials, direct labor, and manufacturing overhead). Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Req 3A Req 3B Determine the predetermined overhead rate for each of the four activity cost pools. Activity Cost Pool Predetermined Overhead Rate Purchasing per purchase order Processing per MH Scrap/rework per order Shipping per shipment Complete this question by entering your answers in the tabs below. Req 1A Req 1E: Req 2 Req 3A Req BB Compute the total amount of manufacturing overhead cost that would be applied to each model using the activitybased absorption costing system. After these totals have been computed, determine the amount of manufacturing overhead cost per unit of each model. (Round your intermediate calculations and "Overhead cost per unit" answers to 2 decimal places.) Total overhead cost Overhead cost per unit
