Question
Apply activity-based costing to determine product costs and profitability. Product Direct Materials ($) Direct Labor ($) Machine Hours (MH) Setup Hours (SH) ABC Overhead ($)
Apply activity-based costing to determine product costs and profitability.
Product | Direct Materials ($) | Direct Labor ($) | Machine Hours (MH) | Setup Hours (SH) | ABC Overhead ($) |
Product X | $100,000 | $50,000 | 1,000 | 100 | $150,000 |
Product Y | $120,000 | $60,000 | 1,500 | 120 | $180,000 |
Requirements:
Calculate the total product costs for Product X and Product Y using activity-based costing (ABC).
Determine the overhead allocation rate per machine hour and setup hour.
Analyze the profitability of each product and recommend strategic pricing decisions.
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Accounting Information Systems
Authors: Marshall B. Romney, Paul J. Steinbart
12th edition
132552620, 978-0132552622
