Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Concord makes two products, Simple and Complex. As their names suggest, Simple is the more basic product, and Complex comes with all the bells and

Concord makes two products, Simple and Complex. As their names suggest, Simple is the more basic product, and Complex comes with all the bells and whistles. The company has always allocated overhead costs to products based on machine hours. Last year, the company implemented an activity-based costing system, and managers determined the following activity pools and rates based on total overhead of $1,495,200:

Rate
Assembly $1.25 per direct labor hour
Fabrication $9.75 per machine hour
Setups $18 per batch
Bonding $118,550 direct to Complex

Only the Complex product requires bonding, so all the costs of bonding should be allocated to Complex. The following data relate to both products.

Simple Complex
Units produced 127,000 42,000
Direct labor hours 240,000 101,000
Machine hours 51,000 33,000
Batches 2,700 4,600

Using the traditional method of allocating overhead costs,

allocate overhead cost to the products.
show that the overhead assigned to each product sums to the total company overhead.
determine the overhead cost per unit for each product.

(Round overhead rate and overhead per unit answers to 2 decimal places, e.g. 15.25.)

Simple Complex Total
Machine hours Enter a number of hours Enter a number of hours
Overhead rate $Enter a dollar amount rounded to 2 decimal places $Enter a dollar amount rounded to 2 decimal places
Total overhead to product $Enter a total amount $Enter a total amount $Enter a total amount

Simple Complex
Total overhead to product $Enter a dollar amount $Enter a dollar amount
Number of units produced Enter a number of units Enter a number of units
Overhead per unit $Enter a dollar amount per unit rounded to 2 decimal places $Enter a dollar amount per unit rounded to 2 decimal places

Using the activity-based costing rates,

allocate overhead cost to the products.
show that the overhead assigned to each product sums to the total company overhead.
determine the overhead cost per unit for each product.

(Round per unit answers to 2 decimal places, e.g. 15.25)

Simple Complex Total
Assembly $Enter a dollar amount $Enter a dollar amount
Fabrication Enter a dollar amount Enter a dollar amount
Setups Enter a dollar amount Enter a dollar amount
Bonding Enter a dollar amount Enter a dollar amount
Total overhead $Enter a total amount $Enter a total amount $Enter a total amount

Simple Complex
Total overhead to product $Enter a dollar amount $Enter a dollar amount
Number of units produced Enter a number of units Enter a number of units
Overhead per unit $Enter a dollar amount per unit rounded to 2 decimal places $Enter a dollar amount per unit rounded to 2 decimal places

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Global Financial Accounting And Reporting Principles And Analysis

Authors: Peter Walton, Walter Aerts

2nd Edition

1408017725, 978-1408017722

More Books

Students also viewed these Accounting questions

Question

What is the status (prevalence) of unions today?

Answered: 1 week ago