E5-26 (similar to) Question Help Durable Doors, Inc., produces two types of doors, interior and exterior. The company's simple costing system has two direct cost categories (materials and labor) and one indirect cost pool. The simple costing system allocates indirect costs on the basis of machine hours. Recently, the owners of Durable Doors have been concerned about a decline in the market share for their interior doors, usually their biggest seller. Information related to Durable Doors production for the most recent year follows: (Click the icon to view the production data.) (Click the icon to view additional information.) Read the requirements Requirement 1. Calculate the cost of an interior door and an exterior door under the existing simple costing system Before calculating the cost of an interior and exterior door, begin by calculating the overhead rate under the simple costing system. First select the formula, then enter the applicable amounts and calculate the rate (Round your answer to the nearest cent. Abbreviations used: bgt budgeted, aty quantity.) Budgeted overhead rate Simple costing system Choose from any list or enter any number in the input fields and then click Check Answer. Check Answer 14 parts Clear All 14 remaining HW Score lar to) i Data Table C., produces two pool. The simple the market shal en to view the pro on to view additio gories (materi ble Doors ha for the most Interior ements. Units sold Selling price Direct mat rial cost per unit Direct manufacturing labor cost per hour Direct manufacturing labor-hours per unit Production runs $ $ $ 3,200 125 $ 50 $ 17 $ 1. 602 35 Exterior 1,800 205 75 17 .30 75 . Calculate the co ing the cost of an il amounts and calcu st select the form antity.) Material moves 72 162 Machine setups Machine-hours Number of inspections 6,000 240 150 4,000 160 any list or enter ar Print Done Check Answer ing 11. 8 A @WPXBO son poor hem ad the The owners have heard of other companies in the industry that are now using an activity-based costing system and are curious how an ABC system would affect their product costing decisions. After analyzing the indirect cost pool for Durable Doors, the owners identify six activities as generating indirect costs: production scheduling, material handling, machine setup, assembly, inspection, and marketing. Durable Doors collected the following data related to the indirect cost activities: Activity Activity Cost Activity Cost Driver Production scheduling 86,900 Production runs Material handling 42,588 Material moves Machine setup 21,600 Machine setups Assembly 80,000 Machine-hours Inspection 20,000 Number of inspections Marketing costs were determined to be 4% of the sales revenue for each type of door of dd Alect the 1.) ante Print Done Check Ans nama PH ar to) Ques G . , produC0s two typ wanawake w pool. The simple co the market sharef m to view the produd i Requirements atataptegories (materials X urable Doors have b fion for the most rece en to view additional ments. Calculate the cost o 1. Calculate the cost of an interior door and an exterior door under the existing simple costing system. 2. Calculate the cost of an interior door and an exterior door under an activity-based costing system. 3. Compare the costs of the doors in requirements 1 and 2. Why do the simple and activity-based costing systems differ in the cost of an interior and exterior door? 4. How might Durable Doors, Inc., use the new cost information from its activity-based costing system to address the declining market share for interior doors? ng the cost of an inte mounts and calculate First select the formula quantity.) Print Done any list or enter any Check Answer Clear All ing
