Churchill Products is considering updating its cost system to an activity-based costing system and is interested in understanding the effects. The companys cost accountant has identified three overhead cost pools along with appropriate cost drivers for each pool.

Cost Pools	Costs			Activity Drivers
Utilities	$	290,000		58,000	machine-hours
Scheduling and setup		290,000		580	setups
Material handling		750,000		1,500,000	pounds of material

The company manufactures three models of water basins (Oval, Round, and Square). The plans for production for the next year and the budgeted direct costs and activity by product line are as follows.

	Products
	Oval			Round			Square
Total direct costs (material and labor)	$	80,000		$	80,000		$	80,000
Total machine-hours		30,000			10,000			18,000
Total number of setups		80			300			200
Total pounds of material		460,000			270,000			770,000
Total direct labor-hours		3,500			1,500			5,000
Number of units produced		3,600			1,800			5,500

Required:

a. The current cost accounting system charges overhead to products based on direct labor-hours. What unit product costs will be reported for the three products if the current cost system continues to be used? c. What are the cost driver rates for the three cost pools identified by the cost accountant? d. What unit product costs will be reported for the three products if the ABC system suggested by the cost accountant's classification of cost pools is used? e. If management should decide to implement an activity-based costing system, what benefits should it expect?

13 Churchill Products is considering updating its cost system to an activity-based costing system and is interested in understanding the effects. The company's cost accountant has identified three overhead cost pools along with appropriate cost drivers for each pool. 15 points Cost Pools Costa Activity Drivers Utilities $290,000 58,000 machine-hours Scheduling and 290,000 590 setupa setup Material handling 750,000 1,500,000 pounds of material eBook Print The company manufactures three models of water basins (Oval, Round, and Square). The plans for production for the next year and the budgeted direct costs and activity by product line are as follows. Total direct costs (material and labor) Total machine-hours Total number of setups Total pounds of material Total direct labor-hours Number of units produced Oval $ 80,000 30,000 BO 460,000 3,500 3,600 Products Round 80,000 10,000 300 270,000 1,500 1,800 Square 80,000 18,000 200 770,000 5,000 5,500 Required: a. The current cost accounting system charges overhead to products based on direct labor-hours. What unit product costs will be reported for the three products if the current cost system continues to be used? c. What are the cost driver rates for the three cost pools identified by the cost accountant? d. What unit product costs will be reported for the three products if the ABC system suggested by the cost accountant's classification of cost pools is used? e. If management should decide to implement an activity-based costing system, what benefits should it expect? Complete this question by entering your answers in the tabs below. Required Required Required Required D E The current cost accounting system charges overhead to products based on direct labor- hours. What unit product costs will be reported for the three products if the current cost system continues to be used? (Do not round intermediate calculations. Round "Per unit cost" answers to 2 decimal places.) Show less Oval Round Square Total cost Per unit cost Required Required c > 13 Churchill Products is considering updating its cost system to an activity-based costing system and is interested in understanding the effects. The company's cost accountant has identified three overhead cost pools along with appropriate cost drivers for each pool. 15 points Cost Pools Costs Activity Drivers Utilities $290,000 58,000 machine-hours Scheduling and 290,000 setup 590 setups Material handling 750,000 1,500,000 pounds of material eBook Print The company manufactures three models of water basins (Oval, Round, and Square). The plans for production for the next year and the budgeted direct costs and activity by product line are as follows. Products Round Oval Total direct costs (material $ 80,000 and labor) Total machine-hours 30,000 Total number of setupa BO Total pounds of material 460,000 Total direct labor-hours 3,500 Number of units produced 3,600 $ 80,000 10,000 300 270,000 1,500 1,800 Square $ 80,000 18,000 200 770,000 5,000 5,500 Required: a. The current cost accounting system charges overhead to products based on direct labor-hours. What unit product costs will be reported for the three products if the current cost system continues to be used? c. What are the cost driver rates for the three cost pools identified by the cost accountant? d. What unit product costs will be reported for the three products if the ABC system suggested by the cost accountants classification of cost pools is used? e. If management should decide to implement an activity-based costing system, what benefits should it expect? Complete this question by entering your answers in the tabs below. Required Required Required Required A E What are the cost driver rates for the three cost pools identified by the cost accountant? (Round your answers to 2 decimal places.) Utilities Scheduling and setup Material handling per machine hour per setup per pound Required A Required D > 13 Churchill Products is considering updating its cost system to an activity-based costing system and is interested in understanding the effects. The company's cost accountant has identified three overhead cost pools along with appropriate cost drivers for each pool. 1.5 points Cost Pools Costs Utilities $290,000 Scheduling and 290,000 setup Material handling 750,000 Activity Drivers 58,000 machine-hours 590 setups 1,500,000 pounds of material eBook Print The company manufactures three models of water basins (Oval, Round, and Squarel. The plans for production for the next year and the budgeted direct costs and activity by product line are as follows. Oval Total direct costs (material $ 80,000 and labor) Total machine-hours 30,000 Total number of setups BO Total pounds of material 460,000 Total direct labor-hours 3,500 Number of units produced 3,600 Products Round $ 80,000 10,000 300 270,000 1,500 Square $ 80,000 18,000 200 770,000 5,000 5,500 1,800 Required: a. The current cost accounting system charges overhead to products based on direct labor-hours. What unit product costs will be reported for the three products if the current cost system continues to be used? c. What are the cost driver rates for the three cost pools identified by the cost accountant? d. What unit product costs will be reported for the three products if the ABC system suggested by the cost accountant's classification of cost pools is used? e. If management should decide to implement an activity-based costing system, what benefits should it expect? Complete this question by entering your answers in the tabs below. Required Required Required Required A D E What unit product costs will be reported for the three products if the ABC system suggested by the cost accountant's classification of cost pools is used? (Do not round intermediate calculations. Round "Per unit cost" answers to 2 decimal places.) Show less Oval Round Square Total cost Per unit cost