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Ellix Company manufactures two models of ultra-high fidelity speakers-the X200 model and the X99 model. Data regarding the two products follow: Product x200 X99
Ellix Company manufactures two models of ultra-high fidelity speakers-the X200 model and the X99 model. Data regarding the two products follow: Product x200 X99 Direct Labor-Hours 0.4 DLHS per unit 0.6 DLHS per unit Annual Production Total Direct 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 Required: $ 220,400 381,500 1,716,000 x200 116 1,090 6,400 Estimated Total Activity X99 174 0 Total 22,200 290 1,090 28,600 $ 2,317,900 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 18 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. Determine the amount of overhead cost that would be applied to each model using the activity-based approach. (Round "Overhead cost per unit" answers to 2 decimal places.) Model X200 Model X99 Total overhead cost Overhead cost per unit
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