"ECTED VIEW Be careful files from the Internet con contain viruses. Unless you need to edit it's safe to stay in Protected View Enable ODE F Activity-Based Costing and Activity Based Management Verses Traditional Approach (continued) (3) Per unit prochuct costs Crowded to nearest dollar Answer for Desk Table Deskis Direct materials from parta) Incorrect Direct labor from parta) Incorrect Overhead (from part 2)) 386 Incorrect Total product cost per unit Incorrect Answer for Tables Incorrect Incorrect Correct Incorrect 1. Traditional Costing (Direct laber costs as the allocation base); rounded to nearest dollar Desk Table Direct materials Inco Direct labor Incorrect Overhead 480 Incorrect Total product cost per a Incorrect Sales price Incorrect Theof(b)(a) $ 70 Incorrect Activity-Based Costing several frent location bases rounded to searest dollar Desk Table Direct materials Incorred Derect labore Incomed Overhead Locorre Total productos per Incare Sales priced Incorrect Proto) =- 5164 Income Incorrect Income Correct Incorrect Tocorrect Correct Incorrect Income Incorect Taconect Income Correct rotered for part, but you should recoge the recovered cost per it when comanda casting with the stocanterne in protoforch product depending on the casting method Acts to be me aturate The percent caleste folos Dusk Thacodes Map Table 10 pecho con ce Incorrect Comed Secret corect Tacoma P the to Required: a Calculate the direct materials cost per unit and direct labor cost per unit for each product b 1. Using the plantwide allocation method, calculate the predetermined overhead rate and determine the overhead cost per unit allocated to the desk and table products, 2. Using the plantwide allocation method, calculate the product cost per unit for the desk and table products c. Using the activity-based costing allocation method, calculate the predetermined overhead rate for each activity. (Hint step 1 through step 3 in the activity-based costing process have already been done for you, this is step 4.) 2. Using the activity-based costing allocation method, allocate overhead to each product (Hint. This is step 5 in the activity-based costing process. Determine the overhead cost per unit , Rourd results to the nearest dollar 3. What is the product cost per unit for the desk and table products? a Calculate the per unit profit for each product using the plantwide approach and the activity based costing approach How much did the per unit profit change when moving from one approach to the other? e. Refer to the estimated cost driver activity provided. Calculate the percent of each activity consumed by each product (for example, the desk product issued 900 of the 1000 purchase orders issued in total and therefore consumes 90 percent of this activity). These percentages represent the amount of overhead costs allocated to each product using activity-based costing Using the plantwide approach, 60 percent of all overhead costs are allocated to the desk and 40 percent to the table Compare the activity-based costing percentages to the percentage of overhead allocated to each product using the plantwide approach Use this information to explain what caused the shift in overhead costs to the desk product using activity based costing 42. Calculating and Recording Overhead Applied. Assume Fine Finishing, Inc discussed in Problem 41 uses activity based costing Required: a Using the data presented at the beginning of Problem 41. calculate the predetermined overhead rate for each activity hondakinalaman Activity-Based Costing Versus Traditional Approach, Activity-Based Management Fine Finishing, Inc. produces a wood desk that sells for $500 and a wood table that sells for $900, Last year, total overhead costs of $6,000,000 were allocated based on direct labor costs. Direct labor costs totaled $2,000,000 last year, and the company produced 15,000 desks and 5,000 tables Total direct labor and direct materials costs by product for last year were as follows Desk Table Direct materials $1,575,000 $950,000 $1,200,000 $800,000 The management of Fine Finishing, Inc. would like to use activity-based costing to allocate overhead rather than one plantwide rate based on direct labor costs. The following estimates are for the activities and related cost drivers identified as having the greatest impact on overhead Direct labor costs Estimated Cost Driver Activity Estimated Overhead Costs Activity Cost Driver Desk Table Total Purchase orders Number of purchase orders S 300,000 900 100 7,000 Machine setups Number of setups 1.600.000 240 280 500 Machine maintenance Machine hours 2.400.000 42.000 18.000 60.000 Quality inspections Number of inspections 1.200,000 15.000 5,000 20,000 Total 8,000,000 Required: a Calculate the direct materials cost per unit and duect labor cost per unit for each product b 1 Using the planwider alloction method, calculate the predetermined over madrate and determine the overhead cost per unit allocated to the desk and table products 2. Using the plantide allocation method, calculate the product cost per unit for the desk and