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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
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 3 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 $722,201 in manufacturing overhead costs and produce 13,700 units of Product W and 68,500 units of Product S during the current year. Unit cost for materials and direct labor are: Direct material. Direct labor Product S $18 12 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: Activity Cost Pool Machine setups required Purchase orders issued Product W $30 21 Machine-hours required Maintenance requests issued Total Cost $ 262,240 46,209 218,640 195,112 $ 722,201 Product S 900 519 7,470 734 Total Activity Product W 2,080 114 10,750 948 Total 2,980 633 Complete this question by entering your answers in the tabs below. 18,220 1,682 Using the data above and an activity-based costing approach, determine the unit product cost of each product for the current year. Req A1 Req A2 Req B Compute the predetermined overhead rate under the current method of allocation. (Round your answer to 2 decimal places.) Predetermined overhead rate per DLH Req A1 Reg A2 Product S Product W Req B Determine the unit product cost of each product for the current year. (Round your answers to 2 decimal places.) Unit Product Cost Req A1 Req A2 Product S Product W Using the data above and an activity-based costing approach, determine the unit product cost of each product for the current year. (Round your answer to 2 decimal places.) Req B Unit Product Cost < Req A2 Req 8 >
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