Question
Carlton's Kitchens makes two types of pasta makers: Strands and Shapes. The company expects to manufacture 60,000 units of Strands, which has a per-
Carlton's Kitchens makes two types of pasta makers: Strands and Shapes. The company expects to manufacture 60,000 units of Strands, which has a per- unit direct material cost of $8 and a per-unit direct labor cost of $45. It also expects to manufacture 40,000 units of Shapes, which has a per-unit material cost of $12 and a per-unit direct labor cost of $30. It is estimated that Strands will use 120,000 machine hours and Shapes will require 80,000 machine hours. Historically, the company has used the traditional allocation method and applied overhead at a rate of $21.2 per machine hour. It was determined that there were three cost pools, and the overhead for each cost pool is shown: Machine Setups $115,500 Machine Processing 4,000,000 Material Requisitions 123,750 $4,239,250 Total Overhead The cost driver for each cost pool and its expected activity is shown: Strands Shapes Total Machine Setups 110 220 330 Machine Hours 120,000 80,000 200,000 90 135 225 Parts Requisitions A. What is the per-unit cost for each product under the traditional allocation method? Round your answers to two decimal places. Total per unit cost Strands Shapes 95.40 $ 84.40 B. What is the per-unit cost for each product under ABC costing? Round your answers to two decimal places. Strands Shapes Total cost $ C. Compared to ABC costing, was each product's overhead under- or overapplied? D. By how much was overhead under- or overapplied for each product? Round your answers to two decimal places. Overhead Amounts Previous Next ?
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