Answered step by step
Verified Expert Solution
Link Copied!

Question

00
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: Product X2ee X99 Direct

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage 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: Product X2ee X99 Direct Labor-Hours 2.5 DLHS per unit 2.7 DLHS per unit Annual Production 24, eee units 37,088 units Total Direct Labor-Hours 12,000 DLHS 25,900 DLHS 37,900 DLHS Additional information about the company follows: a. Model X200 requires $39 in direct materials per unit, and model X99 requires $28. 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 $ 169,480 259, 280 2,653, eee $ 3,681,680 Estimated Total Activity x200 X99 Total 132 220 960 960 12,080 25,980 37,900 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 Reg 18 Req 2A Part 1 Req 2A Part 2 Reg 28 Assume that the company continues to use direct labor-hours as the allocation base for applying overhead cost to products. Compute the plantwide predetermined overhead rate. (Round your answer to the nearest whole dollar.) Predetermined overhead rate per DLH Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Req 2A Part 1 Reg 2A Part 2 Reg 28 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 Rate Activity Cost Pool Machine setups Special processing General factory per setup per MH per DLH Complete this question by entering your answers in the tabs below. Reg 1A Req 1B Reg 2A Part 1 Reg 2 Part 2 Reg 28 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 Reg 1A Reg 1B Req 2A Part 1 Reg 2 Part 2 Reg 2B Assume that the company decides to use activity-based absorption costing to apply overhead cost to products. Compute the unit product cost of each model. (Round your intermediate calculations and final answers to 2 decimal places.) Unit product cost of Model X200 Unit product cost of Model X99

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Entrepreneurship

Authors: Andrew Zacharakis, William D Bygrave

5th Edition

9781119563099

Students also viewed these Accounting questions