Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Data concerning Cranur Architects Corporations two major business lines are given below: Data concerning Cranur Architects Corporation's two major business lines are given below: Direct
Data concerning Cranur Architects Corporations two major business lines are given below:
Data concerning Cranur Architects Corporation's two major business lines are given below: Direct materials per square metre Direct labour per square metre Direct labour-hours per square metre Estimated annual output Commercial $ 5.00 $ 51 0.1 DLHS 64,000 m2 Residential $ 3.50 $ 38.25 0.075 DLHs 448,000 m2 The company has a traditional costing system in which architecture department overhead is applied to units (square metres of architectural drawings) based on direct labour-hours. Data concerning architecture department overhead and direct labour- hours for the upcoming year appear below: Estimated total architecture department overhead Estimated total direct labour-hours $ 2, 144,000 40,000 DLHS Required: 1. Determine the unit costs of the Commercial and Residential products under the company's traditional costing system. (Round your answers to 2 decimal places.) Commercial Residential Unit cost 2. The company is considering replacing its traditional costing system for determining unit product costs for external reports with an ABC system. The ABC system would have the following three activity cost pools: Activities and Activity Measures Supporting direct labour (direct labour-hours) Drawing software modifications (changes) Quality review and technical checks (tests) Expected Activity Estimated Overhead Cost Commercial Residential Total $1,920,000 6,400 33,600 40,000 192,000 160 200 32,000 128 32 160 40 Total service department overhead cost $2,144,000 Determine the unit costs (cost per square metre of architectural drawings) of the Commercial and Residential lines of business under the ABC system. (Round your answers to 2 decimal places.) Commercial Residential Unit costStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started