can you explain?
The wireless phone manufacturing division of a consumer electronics company uses activity-based costing. For simplicity, assume that its accountants have identified only the following three activities and related cost drivers for indirect production costs: Three types of cell phones are produced: Senior, Basic, and Deluxe. Direct costs and cost-driver activity for each product for a recent month are as follows: (Click the icon to view the costs and activity.) Indirect production costs for the month were as follows: 5 Click the icon to view the indirect production costs.) (Click the icon to view the activities and cost drivers.) - X More info - X Data table BRO Requirement 1. Compute Senior Basic Deluxe Determine the formula, the Activity Cost Driver Materials handling Direct-materials cost Engineering Engineering change notices Power Kilowatt hours costs. (Roun $ 40.000 $ 55,000 $ llocation rate Direct-materials cost Direct-labor cost Kilowatt hours $ 6,313 $ 90,000 26 Materials handling Engineering Power 105,000 13,256 100,000 13 5,681 $ 210,000 11 Engineering change notices Print Done Now determine the indirect with the ABC Print Done Indirect production costs: The wireless phone manufacturing division of a consumer electronics company uses activity-based costing. For simplicity, assume that its accountants have identified only the following three activities and related cost drivers for indirect production costs: Three types of cell phones are produced: Senior, Basic, and Deluxe. Direct costs and cost-driver activity for each product for a recent month are as follows: (Click the icon to view the costs and activity.) A A (Click the ic Data table Requirements $ 20,000 Materials handling Engineering 45,000 36,000 1. Compute the indirect production costs allocated to each product with the ABC system. 2. Suppose all indirect production costs had been allocated to products in proportion to their direct-labor costs. Compute the indirect production costs allocated to each product. 3. In which product costs, those in requirement 1 or those in requirement 2, do you have the most confidence? Why? Requirement 1 Power ABC $ 101,000 Determine the fo Total indirect production cost pering Indil Materials handl Engineering Print Done Print Done Power Now determine the indirect production costs allocated to each product, beginning with the Senior product, with the ABC system. Indirect production costs Senior Basic Deluxe The wireless phone manufacturing division of a consumer electronics company uses activity-based costing. Three types of cell phones are produced: Senior, Basic, and Deluxe. Direct costs and cost-driver - . Requirement 1. Compute the indirect production costs allocated to each product with the ABC system. Determine the formula, then compute the indirect cost rates for materials handling, engineering and power costs. (Round the rates to two decimal places, XX.) Indirect cost allocation rate Materials handling Engineering Power Cost allocation base Now determine the indir. Direct labor costs product, beginning with the Senior product, with the ABC system. Basic Deluxe Indirect production costs Indirect production cost Materials handling Units produced Engineering Power Total indirect costs allocated The wireless phone manufacturing division of a consumer electronics company uses activity-based costing. Three types of cell phones are produced: Senior, Basic, and Deluxe. Direct costs and cost-driver G. Requirement 1. Compute the indirect production costs allocated to each product with the ABC system. Determine the formula, then compute the indirect cost rates for materials handling, engineering and power costs. (Round the rates to two decimal places, XX.) Indirect cost allocation rate Materials handling Engineering Power per direct labor dollar Now determine the indirect production costs allocated to each product, beginning with the Senior Senior Basic Deluxe per direct material dollar Indirect production costs: Materials handling Engineering per engineering change notice per kilowatt hour Power Total indirect costs allocated The wireless phone manufacturing division of a consumer electronics company uses activity-based costing. Three types of cell phones are produced: Senior, Basic, and Deluxe. Direct costs and cost-driver Now determine the indirect production costs allocated to each product, beginning with the Senior product, with the ABC system. Indirect production costs Senior Basic Deluxe Materials handling Engineering Power Total indirect costs allocated Requirement 2. Suppose all indirect production costs had been allocated to products in proportion to their direct-labor costs. Compute the indirect production costs allocated to each product. Begin by determining the indirect cost allocation rate assuming all indirect production costs are allocated to products in proportion to their direct-labor costs using the same formula labels as you determined in requirement 1. Total indirect production Now determine the total indirect production costs allocated to each product assuming all indirect production costs are allocated to products in proportion to their direct-labor costs. Senior Basic Deluxe Indirect production costs allocated Requirement 3 In which nroduct costs those in requirement 1 or those in reauirement 2 da vou have the most confidence? Why? The wireless phone manufacturing division of a consumer electronics company uses activity-based costing. Three types of cell phones are produced: Senior, Basic, and Deluxe. Direct costs and cost-driver . Materials handling Engineering Power Total indirect costs allocated Requirement 2. Suppose all indirect production costs had been allocated to products in proportion to their direct-labor costs. Compute the indirect production costs allocated to each product. Begin by determining the indirect cost allocation rate assuming all indirect production costs are allocated to products in proportion to their direct-labor costs using the same formula labels as you determined in requirement 1. Total indirect production Now determine the total indirect production costs allocated to each product assuming all indirect production costs are allocated to products in proportion to their direct-labor costs. Senior Basic Deluxe Indirect production costs allocated Requirement 3. In which product costs, those in requirement 1 or those in requirement 2, do you have the most confidence? Why? The product costs from system, is likely more accurate since it The wireless phone manufacturing division of a consumer electronics company uses activity-based costing. Three types of cell phones are produced: Senior, Basic, and Deluxe. Direct costs and cost-driver .. Materials handling Engineering Power Total indirect costs allocated Requirement 2. Suppose all indirect production costs had been allocated to products in proportion to their direct-labor costs. Compute the indirect production costs allocated to each product. Begin by determining the indirect cost allocation rate assuming all indirect production costs are allocated to products in proportion to their direct-labor costs using the same formula labels as you determined in requirement 1. Total indirect production Now determine the total requirement 1, using an ABC it assuming all indirect production costs are allocated to products in proportion to their direct-labor costs. Basic Deluxe requirement 2, using a traditional cost Indirect production costs Requirement 3. In whic requirement 2, using an ABC 1 requirement 2, do you have the most confidence? Why? The product costs from system, is likely more accurate since it The wireless phone manufacturing division of a consumer electronics company uses activity-based costing. Three types of cell phones are produced: Senior, Basic, and Deluxe. Direct costs and cost-driver . Materials handling Engineering Power Total indirect costs allocated Requirement 2. Suppose all indirect production costs had been allocated to products in proportion to th Begin by determining the indirect cost allocation rate assuming all indirect production costs are allocated allocates indirect production costs using a single cost pool. Total indirect production allocates indirect production costs using multiple cost pools to account for the different production activities. Now determine the total indirect production costs allocated to each product assuming all indirect product is the simpliest to understand Senior Basic Deluxe results in the lower estimated cost of the products. Indirect production costs allocated Requirement 3. In which product costs, those in requirement 1 or those in requirement 2, do you havet results in the higher estimated cost of the products The product costs from V system, is likely more accurate since it
