Question
dino dog collars uses activity-based costing. dino's system has the following features: Activity Allocation Base Predetermined overhead allocation rate purchasing #of purchase orders $ 55.00
dino dog collars uses activity-based costing. dino's system has the following features:
Activity Allocation Base Predetermined overhead allocation rate
purchasing #of purchase orders $ 55.00 per purchase order
assembling# of parts $ 0.30 per part
Packaging # of finished collars $ 0.22 per collar
each collar has 2 parts, direct materials cost is 9.00 per collar, and direct labor cost is 2.00 per collar. suppose animal hut has asked for a bid on 45,000 dog collars. dino will issue a total of 125 purchase orders if animal hut accepts dino's bid.
requirement 1. compute the total cost dino will incur to purchase the needed materials and then assemble and package 45,000 dog collars. Also compute the cost per collar. (round the total cost to the nearest dollar and the cost per collar to the nearest cent.)
2. | For bidding, DinoDino adds a 3535% markup to total cost. What total price will the company bid for the entire Animal Hut order? |
3. | Suppose that instead of an ABC system, DinoDino has a traditional product costing system that allocates indirect costs at the rate of $ 9.10$9.10 per direct labor hour. The dog collar order will require 10 comma 00010,000 direct labor hours. What total price will DinoDino bid using this system's total cost? |
4. | Use your answers to Requirements 2 and 3 to explain how ABC can help DinoDinomake a better decision about the bid price it will offer Animal Hut. |
Step 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