answer: what is unit manufacturing cost for Type A and Type B?

answer: is the cost of type a storage cabinet overstated or understated by the use of machine hours to allocate total manufacturing overhead to production? by how much?

Maxey \& Sons manufactures two types of storage cabinets-Type A and Type B-and applies manufacturing overticad to all units at the rate of $124 per machine hour. Production information follows. The controller, who is studying the use of activity-based costing. has determined that the firms overhead can be identified with three activities, manufacturing setups, machine processing. and product shippeng. Datis on the number of setups, machine hours. and outgoing shipments; which are the activities' three respective cost divivers, follow. and product shipplng $2.690,800 Required: 1. Compute the unit manufacturing cost of Type A and Type B storage cabinets by using the company's current overhead costing procedures. 2. Compute the unit manufacturing cost of Type A and Type B storage cabinets by using activity based costing. 3. Is the cost of the Type A storage cabinet overstated or understated (l.e., distorted) by the use of machine hours to allocate total manufacturing overhead to production? By how much? 4. Assume that the current selling price of a Type A storage cabinet is $369.50 and the marketing manager is contemplating a $41 discount to stimulate volume. Is this discount advisable? Complete this question by entering your answers in the tabs below. Compute the unit manufacturing cost of Type A and Type B storage cabinets by using activily based costing. (Round activity based application rates, overthead application and the final answers to 2 decimal places.)