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9-38. ctivity-Based Costing and Cost Driver Rates (LO 9-4) Upriver Parts manufacturcs two products, V-1 and V-2, at its River Plant. Selected data for
9-38. ctivity-Based Costing and Cost Driver Rates (LO 9-4) Upriver Parts manufacturcs two products, V-1 and V-2, at its River Plant. Selected data for an aver- age month for the two products follow. Units produced. Direct materials cost per unit. Machine-hours per unit. Production runs per month.. 10,000 1.000 Production at the plant is automated and any labor Cost is included in overhead. Data on manufacturing overhead at the plant follow. Machine depredation. Setup labor.. Material handling. , . - Total.. Required $36,000 18,000 14,400 $68,400 a. Upriver currently applies overhead on the basis of machine hours. What is the predetermined overhead ratc for thc month ? b. Upriver is thinking Of adopting an ABC system. They have tentatively chosen the following cost drivers: machine hours for machine depreciation, production runs for setup labor, and direct material dollars for material handling. Compute the cost driver rates for the proposed system at Upriver. 9-39. d Costing Refer to the information in Exercise 9-38. (LO 9-3, 5) a. b. Compute the unit costs for the two products, V- I and V-2, using the current costing system at Upriver (using machine hours as the allocation basis). Compute the unit costs for the two products, WI and V-2, using the proposed ABC system at Upriver.
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