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Help, I cannot figure out the ABC?Kunkel Company makes two products and uses a conventional costing system in which a single plantwide predetermined overhead rate
Help, I cannot figure out the ABC?Kunkel Company makes two products and uses a conventional costing system in which a single plantwide predetermined overhead
rate is computed based on direct laborhours. Data for the two products for the upcoming year follow:
Direct materials cost per unit
Direct labor cost per unit
Direct laborhours per unit
Number of units produced
These products are customized to some degree for specific customers.
Required:
The company's manufacturing overhead costs for the year are expected to be $ Using the company's conventional
costing system, compute the unit product costs for the two products.
Management is considering an activitybased costing system in which half of the overhead would continue to be allocated on the
basis of direct laborhours 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:
Compute the unit product costs for the two products using the proposed ABC system.
For all requirements, do not round intermediate calculations. Round your final answers to decimal places.
Answer is complete but not entirely correct.
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