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b. Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming manufacturing overhead is assigned using activity-based
b. Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker
for the month, assuming manufacturing overhead is assigned using activity-based costing
Gas Cooker Charcoal Smoker Units Number of batches. Number of machine hours Direct materials.. Direct labor... 4,000 80 16,000 $225,500 $100,683 3,500 35 3,000 $108,500 $50,341 Manufacturing overhead follows: Cost Activity Materials acquisition and inspection.. Product assembly. Scheduling $ 50,100 123,500 15,180 $188,780 Cost Driver Amount of direct materials cost Number of machine hours Number of batches REQUIRED a. Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming all manufacturing overhead related to these two products is assigned on the basis of direct labor dollars. a. E18-23. Activity-Based Costing Versus Traditional Costing Refer to the previous exercise in E18-22 for Cuisinart. REQUIRED Comment on the differences between the solutions to requirements (a) and (b). Which is more accurate? What errors might managers make if all manufacturing overhead costs are assigned on the basis of direct labor dollars? b. Cuisinart's manufacturing process has become increasingly automated over the past few years. Discuss how this will likely impact its ability to accurately measure product costs. Comment on the adequacy of the preceding data to meet management's needs. CStep by Step Solution
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