Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Adams Sporting Goods Corporation makes two types of racquets, tennis and badminton. The company uses the same facility to make both products even though

image text in transcribedimage text in transcribedimage text in transcribed

Adams Sporting Goods Corporation makes two types of racquets, tennis and badminton. The company uses the same facility to make both products even though the processes are quite different. The company has recently converted its cost accounting system to activity-based costing. The following are the cost data that Jane Price, the cost accountant, prepared for the third quarter of 2018 (during which Adams made 71,500 tennis racquets and 30,400 badminton racquets). Direct Cost kipped Direct materials Direct labor Tennis Racquet (TR) $19.10 per unit 33.00 per unit Badminton Racquet (BR) $14.70 per unit 24.70 per unit Category Unit level Book Print erences Total Batch level Product level Facility level Estimated Cost $ 696,000 272,800 145,000 720,000 $1,833,800 Cost Driver Number of inspection hours Number of setups Number of TV commercials Number of machine hours Amount of Cost Driver TR: 15, 700 hours; BR: 8,300 hours TR: 80 setups; BR: 44 setups TR: 3; BR: 2 TR: 31, 200 hours; BR: 28, 800 hours Inspectors are paid according to the number of actual hours worked, which is determined by the number of racquets inspected. Engineers who set up equipment for both products are paid monthly salaries. TV commercial fees are paid at the beginning of the quarter. Facility-level cost includes depreciation of all production equipment. Required a. Compute the cost per unit for each product. b. If management wants to price badminton racquets 30 percent above cost, what price should the company set? Complete this question by entering your answers in the tabs below.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy

10th Canadian Edition Volume 2

1118300858, 978-1118300855

More Books

Students also viewed these Accounting questions

Question

How are most students funded?

Answered: 1 week ago

Question

Describe the purpose of organizational development.

Answered: 1 week ago