can you help me with requirements 3 &4 please?
Sun Systems specializes in servers for work-group, e-commerce, and enterprise resource planning (ERP) applications. The company's original job cost system has two direct cost categories: direct materials and direct labor, Overhead is allocated to jobs at the single rate of $21 per direct labor hour. A task force headed by Sun's CFO recently designed an ABC system with four activities. The ABC system retains the current system's two direct cost categories Thus, it budgets only overhead costs for each activity Portinent data follow. (Click on the icon to view ABC system data) Sun Systems has been awarded two new contracts that will be produced as Job A and Job B. Budget data relating to the contracts follow Click the icon to view the contract information) Read the requirements Assembling 99,000 19,800 1,800 1,800 Shipping Total cost $ 538,000 $ 83,840 100 10 Divide by number of units 5,380.00 $ 8,384.00 Product cost per unit Requirement 3. Which costing system more accurately assigns to jobs the costs of the resources consumed to produce them? Explain. First, compute each Input per unit and compute the percentage of overhead assigned to Job A compared to Job B. (Round your numbers to two decimal places, XXX Round your percentage to the nearest whole percent) JobA Job B % (Job A+Job B) Direct labor hours per unit Parts per unit % Setups per unit % Assembling hours per unit Shipment per unit % X Data Table Job A Job B Number of parts 11,000 2,500 10 2 Number of setups 220 Number of assembling hours 1,100 . 1 1 Number of shipments 9,200 800 Total direct labor hours ---- 100 10 Number of output units . Direct materials cost $ 233,800 $ 39,200 ... Direct labor cost $ 185,000 $ 19,000 Print Done Data Table Cost Allocation Rate 1.20 --- Activity Allocation Base Materials handling Number of parts Machine setup ...... Number of setups Assembling . Assembling hours Shipping Number of shipments 520.00 $ $ $ $ 90.00 .. $ 1,800.00 ... Print Done Requirements 3. 1. Compute the product cost per unit for each job using the original costing system (with two direct cost categories and a single overhead allocation rate). 2. Suppose Sun Systems adopts the ABC system. Compute the product cost per unit for each job using ABC. Which costing system more accurately assigns to jobs the costs of the resources consumed to produce them? Explain. 4. A dependable company has offered to produce both jobs for Sun for $6,000 per output unit. Sun may outsource (buy from the outside company) Job A only, Job B only, or both jobs. Which course of action will Sun's managers take if they base their decision on (a) the original system? (b) ABC system costs? Which course of action will yield more income? Explain. Print Done
