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help please!thx,guve the process of function. Brilliant Accents Company manufactures and sells three styles of kitchen faucets: Brass, Chrome, and White. Production takes 25, 25,
help please!thx,guve the process of function.
Brilliant Accents Company manufactures and sells three styles of kitchen faucets: Brass, Chrome, and White. Production takes 25, 25, and 10 machine hours to manufacture 1000-unit batches of brass, chrome and white faucets, respectively. The following additional data apply: Projected sales in units BRASS 30,000 CHROME WHITE 50,000 40,000 PER UNIT data: Selling price $40 $20 $30 $ 8 $15 $ 4 $3 $ 8 $ 9 Direct materials Direct labor Overhead cost based on direct labor hours (traditional system) $12 $ 3 $ 9 Hours per 1000-unit batch: Direct labor hours Machine hours Setup hours Inspection hours 40 25 1.0 30 10 25 0.5 20 30 10 1.0 20 Total overhead costs and activity levels for the year are estimated as follows: Activity Overhead costs Direct labor hours Machine hours Setups $465,500 Inspections $405,000 $870.500 Activity levels 2,900 hours 2,400 hours 95 setup hours 2,700 inspection hours Required: a. Using the traditional system, determine the operating profit per unit for each style of faucet. b. Determine the activity-cost-driver rate for setup costs and inspection costs. c. Using the ABC system, for each style of faucet 1. compute the estimated overhead costs per unit. 2. compute the estimated operating profit per unit. d. Explain the differences between the profits obtained from the traditional system and the ABC system. Which system provides a better estimate of profitability? Why? a. Operating profit per unit Workings Answer 1. Brass faucets 2.Chrome faucets 3. White faucets b. The activity-cost-driver rate Workings Answer 1. setup costs 2. Inspection costs c. 1. Brass faucets Overhead Costs per unit W Workings Answer O R K N G Overhead costs per unit Operating profit per unit Answer c. 2. Chrome faucets Overhead Costs per unit W Workings Answer O R K I N G Overhead costs per unit - Operating profit per unit Answer R K N G Overhead costs per unit Operating profit per unit Answer c. 2. Chrome faucets Overhead Costs per unit W Workings Answer O R K I N G Overhead costs per unit Operating profit per unit Answer 11 c. 3. White faucets Overhead Costs per unit W Workings Answer O R K N G Overhead costs per unit Operating profit per unit Step by Step Solution
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