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Exercise 17-16 Comparing costs under ABC to traditional plantwide overhead rate LO P1, P3, A1, A2 Smythe Crystal makes fine tableware in its Ireland factory.
Exercise 17-16 Comparing costs under ABC to traditional plantwide overhead rate LO P1, P3, A1, A2 Smythe Crystal makes fine tableware in its Ireland factory. The following data are taken from its production plans for the year Direct labor costs Setup costs 5,570,000 615,000 Expected production Direct labor hours required Machine setups required Wine Glasses 211,000 units 266,000 DLH Commemorative Vases 22,000 units 15,600 DLH 300 setups 700 setups Required 1. Determine the setup cost per unit for the wine glasses and for the commemorative vases if setup costs are assigned using a single plantwide overhead rate based on direct labor hours 615,000 281,600 2.18 per direct labor hour Direct labor hours Activity Driver Units Produced OH Cost per unit Product Overhead Rate 2.18 2.18 Total Overhead Cost 579,880 34,008 Wine Glasses 266,000 211,000 2.75 Vases 15,600 0 2. Determine setup costs per unit for the wine glasses and for the commemorative vases if the setup costs are assigned based on the number of setups 615,000 o per setup Number of setups Activity Driver Units Produced OH Cost per unit Product Overhead Rate 0.00 0.00 Total Overhead Cost Wine Glasses Vases
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