Claire Company produces Tablets and Books. Total overhead costs traditionally have been allocated on the basis of direct labor hours. After implementing activity-based costing, managers determined the following cost pools and cost drivers. They also decided that general costs should no longer be allocated to products. Additional information in word doc. Thank you! |
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Claire Company produces Tablets and Books. Total overhead costs traditionally have been allocated on the basis of direct labor hours. After implementing activity-based costing, managers determined the following cost pools and cost drivers. They also decided that general costs should no longer be allocated to products. Department Costs $269,568 803,296 183,040 633,152 Activity Pool Binding Printing Product design General Total overhead costs Cost Driver Number of units Machine hours Change orders None $1,889,056 Other information is as follows: Tablets 62,800 $3.09 $3.93 25,500 125,000 1,400 Units Direct materials cost per unit Direct labor cost per unit Direct labor hours Machine hours Change orders Books 20,100 $10.09 $8.08 16,100 120,000 3,000 Calculate predetermined OH rate. (Round answer to 2 decimal places, e.g. 15.25.) Predetermined OH rate $ /DLH Determine the unit product cost for Tablets and Books using the traditional costing system. (Round overhead rate and final answers to 2 decmial places, e.g. 15.25.) Tablets Unit product cost Books $ $ Calculate ABC rates. (Round answers to 2 decimal places, e.g. 15.25.) ABC rates Binding Printing Product design $ /unit $ /machine hour $ /change order Determine the unit product cost for Tablets and Books using the activity-based costing system. (Round all rates and final answers to 2 decmial places, e.g. 15.25.) Tablets Books $ Total unit cost $ Show that General cost is the difference between the total overhead costs allocated to products under the traditional system and the total cost allocated to products under the activity-based costing system. (Round answers to 0 decmial places, e.g. 1,525.) Traditional Total allocated overhead $ ABC $ Difference $