College Supply Company (CSC) makes three types of drinking glasses: short, medium, and tall. It presently applies overhead using a predetermined rate based on direct labor-hours. A group of company employees recommended that CSC switch to activity-based costing and identified the following activities, cost drivers, estimated costs, and estimated cost driver units for Year 5 for each activity center.
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| ^) Compute the production costs for Each product for February using direct labor- hours EE the allocation DIBEE and the PREdetermined rate computed in requirement ('S )_ I {` not round intermediate* calculations . Round Ind answers to the nearest Whole dollar . !` Short Medium Direct material = 2.000| } 2. 500 Direct labor [WETHEED Total Costs C ) Compute the production costs for Each product for February LEing the cast drivers recommended by the* Emp LY'EZE and the predetermined rates computed in requirement [s] . I Hate- DO not assume that total overhead applied to products in February will be the same for activity - biasEd casting EE it was for the labor- hour - based allocation . !` Short Medium Tall Direct matErie* = 4. 00 0\\\\ \\} 2.00 0 \\5 2.50 0 Direct labor Setting Up production -TOCESSing Orders Handling materia* = Using machines Performing quality management Shipping Total 10=$5GallegE Supply Company (^_SEY makes three TYPES of drinking BlaESE=_ Short medium , and tall _ It presently applies overhead using & predetermined rate GEEEd on direct labor-hourE . A group of company EmployEES recommended that LEE Switch to activity - based casting and identified the following activities , Cost. drivers Estimated cost . and Estimated cost driver units for Year { for Each activity center . RECOMMENDED Estimated Estimated Cost Activity Cost Driver LOST Driver Units Setting up production Number of production TUNE $ 2.3, 00.0 ITO runs FROZEEZINE DINETE `umber of orders 5.0. 40.0 210 Orders Handling materiEls Founds of materials TE, 200 3. 040 Pounds Using machines Machine-hours 2, OJO hours Providing quality management Number of inspections 5.5. 3.50 45 inspections Packing and Shipping Units Shipped 42, 00 0 21. OOD units }ZEB, 150 In addition , management Estimated 1. 30% direct labor- hours for year S. ASSUME that the following Fast driver volume = Occurred in Februar, year 5` Short Medium T-Bill Number of units produced 1 . 107 5:00 400 Direct materials costs.* Direct labor-hours 120 1 10 Number of orders Number of production TUNE Pounds of material 300 BOJ 100 Machine -hours 400 200 Number of inspections Unit= Shipped 1 . 100 500 300 Direct labor FOE'S WERE IZZ PER hour . REQUITED .` (a) Compute & predetermined overhead rate for year { for Each cast driver recommended by the* Employees . Also compute a predetermined rate weing direct labor-hours as the allocation beEE . ( Round your answers to 2 decimal places . !` Activity Allocation FlatE Setting up production Fer run Processing ander= Fer order? Handling material = FEr pound LIEing machines per hour Performing quality management Fer inEF Packing & Shipping per unit Direct labor hour rate* per hour
