Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Fairchild Inc, manufactures two products, Regular and Deluxe, and applies overhead on the basis of direct labor hours. Anticipated overhead and direct labor time for

image text in transcribed
Fairchild Inc, manufactures two products, Regular and Deluxe, and applies overhead on the basis of direct labor hours. Anticipated overhead and direct labor time for the upcoming accounting period are $1,727400 and 40,400 hours, respectively. Information about the company's products follows Regular- Estimated production volume: 2,800 units Direct materials cost $30 per unit Direct labor per unit 5 hours at $17 per hour Deluxe Estimated production volume: 4,400 units Direct materials cost $44 per unit Direct labor per unit 6 hours at $17 per hour Fairchild's overhead of S1,727.400 can be identified with three major activities, order processing ($251.000), machine processing ($1.292,800), and product inspection ($189,600). These activities are driven by number of orders processed, machine hours worked, and inspection hours, respectively. Data relevant to these activities follow Machine Hours Inspection Hours Regular 16,200 Deluxe 6.400 Total 10,000 Worked Orders Processed 300 200 500 4.400 24,20 40,400 Required: A. Compute the pool rates that would be used for order processing, machine processing, and product inspection in an activity-based costing system B. Assuming use of activity-based costing, compute the unit manufacturing costs of Regular and Deluxe if the expected manufacturing volume is attained (Round your intermediate calculations and final answers to 2 decimal places.) C. How much overhead would be applied to a unit of Regular and Deluxe if the company used traditional costing and applied overhead solely on the basis of direct labor hours? Which of the two products would be undercosted by this procedure Overcosted? (Round your intermediate calculations and final answers to 2 decimal places.) per OP per MH per A Order processing Machine processing Product inspection B Activity Based Conting Regular Deluxe c Traditional Couting Regular Deluxe Proy 1 of 1 Next

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

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

Financial Markets And Institutions

Authors: Peter Howells, Keith Bain

5th Edition

0273709194, 9780273709190

More Books

Students also viewed these Accounting questions

Question

What are your goals for this interview today?

Answered: 1 week ago

Question

Explain the legal environments impact on labor relations. page 631

Answered: 1 week ago