Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Harrison Company makes two products and uses a conventional costing system in which a single plantwide, predetermined overhead rate is computed based on direct labour-hours.

Harrison Company makes two products and uses a conventional costing system in which a single plantwide, predetermined overhead rate is computed based on direct labour-hours. These products are customized to some degree for specific customers. Data for the two products for the upcoming year follow:

Rascon Parcel
Direct materials cost per unit $ 29.60 $ 22.80
Direct labour cost per unit $ 20.70 $ 4.60
Direct labour-hours per unit 0.90 0.30
Number of units produced 31,000 121,000

Required:

1. The companys manufacturing overhead costs for the year are expected to be $868,000. Using the companys traditional costing system, compute the unit product costs for the two products. (Do not round intermediate calculations and round your final answers to 2 decimal places.)

2. Management is considering an ABC system in which half of the overhead would continue to be allocated on the basis of direct labour-hours and half would be allocated on the basis of engineering design time. This time is expected to be distributed as follows during the upcoming year:

Rascon Parcel Total
Engineering design time (in hours) 5,800 2,900 8,700

Compute the unit product costs for the two products using the proposed ABC system. (Do not round intermediate calculations and round your final answers to 2 decimal places.)

3. This part of the question is not part of your Connect assignment.

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

Using QuickBooks Online For Accounting

Authors: Glenn Owen

3rd Edition

0357391691, 9780357391693

More Books

Students also viewed these Accounting questions

Question

How would you describe the work atmosphere?

Answered: 1 week ago