Direct Labor P18-1B yideoPlus, Inc. manufactures two types of DVD players, a deluxe model and a standard model. Annual production is 50,000 units for the deluxe and 20,000 units for the standard. Overhead Total Unit Cost Both require 2 hours of direct labor for completion Therefore, total annual direct labor hours are 140,000 [2 hrs. x (20,000 +50,000)] (b) computation of A-B-C o Expected annual manufacturing overhead is $1,050,000. Thus, the predetermined overhead rate is $7.50 ($1,050,000 140,000) per direct labor hour. Est Ove Activity Cost Pool The direct materials cost per unit is $42 (deluxe) and $11 (standard) model Purchasing The direct labor cost is $18 per unit for both the deluxe and standard models. Receiving The company's managers identified six activity cost pools and related cost drivers and accumulated overhead by cost pool as follows. Assembling Testing Expected Use of Drivers; by Product Estimated Expected Use Overhead of Cost Drivers Finishing Activity Cost Pool Cost Driver Standard Deluxe Packing & Shipping Purchasing Receiving Assembling Testing Finishing Packing and shipping Orders Pounds Number of parts Number of tests Units Pounds S 126.000 30.000 444,000 115.000 140,000 195.000 $1,050,000 400 20.000 74.000 23.000 70.000 80.000 100 4,000 20.000 10,000 20,000 18,000 300 16,000 54,000 13.000 50,000 62,000 (c) Stan Activity Cost Pools Expected Use of Drivers Instructions Purchasing 100 (a) Under traditional product costing compute the total unit cost of both products Receiving 4,000 Prepare a comparative schedule of the individual costs by product Lsee page 841) Assembling 20,000 (b) Under ABC, prepare a schedule showing the computations of the activity-based overhead rates (per cost driver). Testing 10,000 Finishing 20,000 (c) Prepare a schedule assigning each activity's cost pool to each product based on the use of cost drivers. (Include a computation of overhead cost per unit, rounding to the nearest cent Packing & Shipping Total Costs Assigned 18,000 (d) Compute the total cost per unit for each product under ABC (e) Classify each of the activities as a value-added activity or a non--value-added activity Units Produced () Comment on: (1) the comparative overhead cost per unit for the two products under ABC and (2) the comparative total costs per unit under traditional costing and ABC) Overhead Cost Per Unit for you to complete and (a) Computation of unit costs-traditional costing, swers to similar, Prob A. ssignment. Manufacturing Costs Standard Model Products Deluxe Model Direct Materials Direct Labor odel and a standard Overhead standard Total Unit Cost irect labor (b) computation of A-B-C overhead rates per cost driver ermined Estimated Overhead Expected Use of Cost Drivers Activity-Based Overhead Rate Activity Cost Pool Purchasing 400 orders els Receiving Assembling 20,000 pounds ivers and accumulated 74,000 parts ected Use of Drivers Testing 23,000 tests by Product Finishing Packing & Shipping 70,000 units andard Deluxe 80,000 pounds 300 16.000 54,000 13.000 50,000 62 000 100 4.000 20 000 10.000 20,000 18,000 (c) Standard Model Activity Cost Pools Expected Use of Drivers Deluxe Model Overhead Rates Cost Expected Use of Drivers Overhead Cost Rates Assigned Assigned Purchasing 100 300 products Receiving 4,000 16,000 ess page 841). Assembling 20,000 54,000 ctivity-based overhead rates Testing 10,000 13,000 20,000 50,000 Finishing Packing & Shipping Total Costs Assigned duct based on the use of cost to the nearest cent) 18,000 62,000 value-added activity Units Produced 20,000 50,000 ucts under ABC and Overhead sting and ABC Cost Per Unit (d) FYI: This 18-1A. Yo complete Products ABC Manufacturing Deluxe Model Standard Costs Model Direct Materials Direct Labor Overhead Total Unit Cost PROBLEM 1 (a) (e) Manufacturi Activity Value vs Non-Value Added Direct mat Direct labo Overhead Total ur Purchasing Receiving Assembling S16.45 X 1.5 = Testing Finishing (b) Activity Cost Receiving Forming Assembling Testing Painting Packing and ship Packing & Shipping (n Don't forget this: (see answers below for guidance) (1) (2) (c) AaBbCcl AaBbCcl AABBCCDC AA8BCCD TUDDC SLJC AaLCLL ABLALLLA AUBULLD ADBIR.CU AallDCoDe Repla BIU-ab x Normal No Spac Heading 1 Heading 2 Title Subtle Em.. Intense E... Subtitle Emphasis Strong Quote Antense Q.. Subtle Ref Intense Re.. D Select Font Paragraph Styles tditing IMIS IS your "BoD-HOmework"..PTOD T8-1D. This problem is NOT in your textbook PROBLEM 18-1B Required: below this problem B (next page) are the "working papers" for you to complete and then submit to the instructor... by the due date, (a) Computation of unit costs-traditional costing. Optional: Below the Prob B "working papers" (scroll 3 pages) are answers to similar, Prob A If needed, refer to the Prob A to help you complete your problem B assignment Products Deluxe Standard Manufacturing Costs Model Model Direct Materials Direct Labor P18-1B VideoPlus, Inc. manufactures two types of DVD players, a deluxe model and a standard model. Annual production is 50,000 units for the deluxe and 20,000 units tor the standard Overhead Total Unit Cost Both require 2 hours of drect labor for completion Thereforn, total annual direct labor hours are 140.000 12 hrs. x (20,000 + 50,000)1 Expected anual manufacturing overhead is $1,050,000 Thus the predetormined overbead rate is ST 50 (51.050.000 +140.000) per direct labor hour (b) computation of A-B-C overhead rates per cost driver Expected Use of Cost Drivers Activity-Based Overhead Rate Estimated Activity Cost Pool Overhead The direct materials cost par unin is $42 (deluxe) and $11 (standard) model Purchasing 400 orders The deect labor cost is $18 per unit for both the deluoce and standard models Receiving 20,000 pounds Ihe company's managers idantified six sctivity cost pools and related cost drivers and accumulated overhead by cost pool as folows 74,000 parts Assembling Testing 23,000 tests Expected Use of Drivers by Product Estimated Expected Use Finishing 70,000 units Cost Driver Activity Cost Pook Purchasing Receiing Assembling Tesbng Finishing Packing and shipping Oveshead of Cost Drivers Standard Deluxs Packing & Shipping 80,000 pounds S 126,000 30,000 444,000 400 100 300 Deders Pounds Number of parts Number of tests 20,000 74,000 23.000 70.000 80.000 16,000 54,000 13.000 50 000 62 000 4 000 20,000 10.000 115,000 140 000 195.000 $1,050,000 (c) Units 20 000 Pounds 18,000 Standard Model Deluxe Model Activity Cost Pools Purchasing Expected Use of Orivers Expected Use of Drivers Overhead Cost Overhead Cost Assigned Rates Assigned Rates Instructions f) Under tradtional peoduct costing, compute the total unit cost of both produchs Prepare a comparative schedule of the individual costls by product isee paye 841 100 300 Receiving 4,000 16,000 Assembling 20,000 54,000 (b) Under ABC, prepare a schedde showing the computations of the activity-based overheid rates (par cost driver) Testing 10,000 13,000 Finishing 20.000 50.000 (e) Prepare a schedule assigning each activity's coss pool to sach product based on the use of cost drivers (Undude a computation of averhead cost per unh, sounding to the naareat cent) Packing & Shipping Total Costs Assigned 18,000 62.000 d Compute the sotal cost per unit for each product under ABC (e) Classity each of the activities as a value-added acivity or a non-value-added acdivity Units Producedt 20.000 50,000 Comment on (13 the comparaive overhesd cost per unit for the two products under ABC, and (2) the comparative total cossts per unt under tradiionall costing and ABC Overhead Cost Per Unit 24T PM Type here to search Gn/01