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EMD Corporation manufactures two products, Product S and Product w Product W is of fairly recent origin, having been developed as an attempt to enter
EMD Corporation manufactures two products, Product S and Product w Product W is of fairly recent origin, having been developed as an attempt to enter a market closely related to that of Product W Product W is the more complex of the two products, requiring 2 hours of direct labor time per unit to manufacture compared to 1 hour of direct labor time for Product S. Product W is produced on an automated production line Overhead is currently assigned to the products on the basis of direct-labor-hours. The company estimated it would incur $1,072966 in manufacturing overhead costs and produce 19,700 units of Product W and 78,800 units of Product S during the current year. Unit cost for materials and direct labor are s 14 s 25 17 Required a-1. Compute the predetermined overhead rate under the current method of allocation. a-2. Determine the unit product cost of each product for the current year b. The company's overhead costs can be attributed to four major activities. These activities and the amount of overhead cost attributable to each for the current year are given below Total Cost t s $ 523,200 55,890 262,080 232,596 S 1,072,966 3,270 787 18,720 1,638 1,010 2,260 196 11,480 948 Machine setups required orders issued 7,240 690 Machine-hours required Using the data above and an activity-based costing approach, determine the unit product cost of each product for the current year
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