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Brilliant Accents Company manufactures and sells three styles of kitchen faucets: Brass, Chrome, and White. The following additional data apply: Selling price Direct materials
Brilliant Accents Company manufactures and sells three styles of kitchen faucets: Brass, Chrome, and White. The following additional data apply: Selling price Direct materials Direct labor Overhead cost based on Projected sales in Units 30,000 BRASS CHROME WHITE 50,000 40,000 PER UNIT data: $40 $20 $30 $8 $4 $8 $15 $3 $9 $12 $3 $9 direct labor hours* *Overhead cost is assigned using a single rate based on direct labor hours Hours per product line: BRASS CHROME WHITE Direct labor hours 1,200 500 1,200 Machine hours Setup hours 750 30 1,250 400 25 40 Inspection hours 900 1,000 800 Total overhead costs and activity levels for the year are estimated as follows: Overhead Activity Activity levels costs Direct labor 2,900 hours hours Machine 2,400 hours hours Setups $465,500 Inspections 95 setup hours 2,700 inspection $405,000 hours $870,500 Using the ABC system (setups and inspections are as activity-cost drivers), compute the gross profit per unit for Chrome style of faucet.
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Gross Profit per Unit for Chrome Faucet ABC System Step 1 Calculate the Overhead Rate per Activity Driver Direct Labor Hours Overhead Cost for Direct ...Get Instant Access to Expert-Tailored Solutions
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