Coronado 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 $2,310,000: Rate Assembly $0.80 per direct labor hour Fabrication $15 per machine hour Setups $20 per batch Bonding $212,000 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 100,000 Complex 40,000 Units produced Direct labor hours 250,000 160.000 Machine hours 80,000 30,000 Batches 2,000 4.000 (a (a) 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, eg. 15.25.) Simple Complex Total Machine hours Overhead rate $ $ $ Total overhead to product $ $ Simple Complex Total overhead to product $ Number of units produced Overhead per unit $ (b) 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 $ $ Fabrication Setups Bonding Total overhead $ $ $ Simple Complex Total overhead to product $ $ Number of units produced Overhead per unit $ $ e Textbook and Media Save for Later Attempts: unlimited Submit Answer Coronado 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 $2,310,000: Rate Assembly $0.80 per direct labor hour Fabrication $15 per machine hour Setups $20 per batch Bonding $212,000 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 100,000 Complex 40,000 Units produced Direct labor hours 250,000 160.000 Machine hours 80,000 30,000 Batches 2,000 4.000 (a (a) 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, eg. 15.25.) Simple Complex Total Machine hours Overhead rate $ $ $ Total overhead to product $ $ Simple Complex Total overhead to product $ Number of units produced Overhead per unit $ (b) 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 $ $ Fabrication Setups Bonding Total overhead $ $ $ Simple Complex Total overhead to product $ $ Number of units produced Overhead per unit $ $ e Textbook and Media Save for Later Attempts: unlimited Submit
