Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Finch Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs

image text in transcribedimage text in transcribed Finch Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity cos pools follow: Production of 830 sets of cutting shears, one of the company's 20 products, took 170 labor hours and 7 setups and consumed 20 percent of the product-sustaining activities. Required a. Had the company used labor hours as a companywide allocation base, how much overhead would it have allocated to the cutting shears? b. How much overhead is allocated to the cutting shears using activity-based costing? c. Compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 830 units are produced. If direct product costs are $180 and the product is priced at 30 percent above cost for what price would the product sell under each allocation system? Complete this question by entering your answers in the tabs below. Had the company used labor hours as a companywide allocation base, how much overhead would it have allocated to the cutting shears? How much overhead is allocated to the cutting shears using activity-based costing? Note: Round intermediate calculations to 2 decimal places. Round your final answers to the nearest whole dollar amount. tion by entering your answers in the tabs below. Compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 830 units are produced. If direct product costs are $180 and the product is priced at 30 percent above cost for what price would the product sell under each allocation system? Note: Round intermediate calculations and final answers to 2 decimal places

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

Step: 3

blur-text-image

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

Accounting Ethics A Practical Approach

Authors: Howard J Levine

1st Edition

0692112898, 9780692112892

More Books

Students also viewed these Accounting questions