Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Ellix Company manufactures two models of ultra-high fidelity speakers-the X200 model and the X99 model. Data regarding the two products follow: Total Direct Product

image text in transcribed

Ellix Company manufactures two models of ultra-high fidelity speakers-the X200 model and the X99 model. Data regarding the two products follow: Total Direct Product x200 X99 Direct Labor-Hours 0.4 DLHS per unit 0.6 DLHS per unit Annual Production Labor-Hours 16,000 units 6,400 DLHS 37,000 units 22,200 DLHS 28,600 DLHS Additional information about the company follows: a. Model X200 requires $40 in direct materials per unit, and model X99 requires $20. b. The direct labor workers are paid $40 per hour. c. The company has always used direct labor-hours as the allocation base for applying manufacturing overhead cost to products. d. Model X200 is more complex to manufacture than model X99 and requires the use of special equipment. e. Because of the special work required in (d) above, the company is considering the use of activity-based absorption costing to apply manufacturing overhead cost to products. Three activity cost pools have been identified as follows: Activity Cost Pool Machine setups Special processing General factory Activity Measure Number of setups Machine-hours Direct labor-hours Estimated Total Cost X200 $ 220,400 381,500 1,716,000 116 1,090 6,400 Estimated Total Activity X99 174 0 Total 22,200 290 1,090 28,600 $ 2,317,900 Required: 1. Assume that the company continues to use direct labor-hours as the allocation base for applying overhead cost to products. a. Compute the plantwide predetermined overhead rate. b. Compute the unit product cost of each model. 2. Assume that the company decides to use activity-based absorption costing to apply overhead cost to products. a. Compute the activity rate for each activity cost pool and determine the amount of overhead cost that would be applied to each model using the activity-based approach. b. Compute the unit product cost of each model. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Part 1 Req 2A Part 2 Req 2B Assume that the company decides to use activity-based absorption costing to apply overhead cost to products. Compute the activity rate for each activity cost pool. Activity Cost Pool Machine setups Special processing General factory Activity Rate per setup per MH per DLH

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Information Systems The Processes and Controls

Authors: Leslie Turner, Andrea Weickgenannt

2nd edition

9781118473030, 1118162307, 1118473035, 978-1118162309

More Books

Students also viewed these Accounting questions

Question

L A -r- P[N]

Answered: 1 week ago