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Hello, I need help on question 2 part B for my managerial accounting homework. 2 Snowden Industries produces two electronic decoders, P and Q. Decoder
Hello, I need help on question 2 part B for my managerial accounting homework.
2 Snowden Industries produces two electronic decoders, P and Q. Decoder P is more sophisticated and requires more programming and testing than does Decoder Q. Because of these product differences, the company wants to use activity-based costing to allocate overhead costs. It has identified four activity pools. Relevant information follows: 10 points Cost Pool Activity Pools Repair and maintenance on assembly machine Programming cost Software inspections Product testing Total overhead cost Total Cost Driver $128,800 Number of units produced 167,200 Number of programing hours 26,000 Number of inspections 30,000 Nmber of tests eBook $352,000 Print Expected activity for each product follows: Number of Number of Progranming N Number of Inspections 494 156 650 Number of Tests 1,400 1,100 2,500 References Decoder P Decoder Total Units 16,800 39,200 56,000 Hours 2,100 ,700 3,800 Assume that before shifting to activity-based costing, Snowden Industries allocated all overhead costs based on direct labor hours. Direct labor data pertaining to the two decoders follow: Decoder P Decoder o Total Direct Labor Hours 6,600 15,400 22,000 Required a. Compute the amount of overhead cost allocated to each type of decoder when using direct labor hours as the allocation base b. Determine the cost per unit for overhead when using direct labor hours as the allocation base and when using ABCStep by Step Solution
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