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Greetings, I am trying to answer this, but it seems simple, perhaps I am doing something wrong. Any help is appreciated. ABC Problem Turn-in Next
Greetings, I am trying to answer this, but it seems simple, perhaps I am doing something wrong. Any help is appreciated.
ABC Problem Turn-in Next Nlonday Jordy Inc. produces golf carts. One of its plants in Canada produces two versions of carts: basic model and a killer model. The killer model has a sturdier frame, a higher horsepower engine, bigger tires, and softer seats. At the beginning of the year, the followingdatawere prepared by the controller's office for this Canadian plant: Expected Quantity to Produce d,rh*",/-. Direct Material Cost Per Cart Direct Labor Cost Per Cart Basic 40,000 carts $ $ 400 250 400,000 Total Direct Labor Hours C.H, : Activity Center ,16e $ $ e00 s00 200,000 *w Level of Cost Driver 1,500 1,000 1,000 20 Engineering Support ( Hours) t Purchasing (Number of Orders) .3 Maintenance (Machine Hours Used) t Equipment Setups Q'{umber of Setups) I Killer 10,000 carts 4,500 2,000 3,000 60 Total overhead costs of $irqqggQg associated with activity centers are reported as: { Engineering Support r Purchasing Materials s Maintaining Equipment t Setting Up Equipment A. B. C. $ $ $ $ 1,800,000 1,200,000 1,240,000 1,760,000 Calculate the cost to make each cart on a per unit scale if the traditional method of using a single overhead rate for allocating overhead is used. For the single rate, use direct labor hours as the allocation base. Calculate the cost to make each cart on a per unit scale if ABC accounting is used to allocate overhead to the two types of carts. Explain the difference in the costs under the two different accounting methods. In your explanation, use purchasing as a batch activity and maintaining equipment as a unit level activityStep by Step Solution
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