Homework of MANAGERIAL ACCOUNTING

REQUIREMENT

T1. SOLVE THE PROBLEM AND PROVIDE YOUR INSIGHTS WHERE EVER REQUIRED.

1. Pauls Plastics uses an activity-based cost system. The company produces Product X and Product Z. Information concerning the two products is given below:

Product X Product Z

Units produced................................................... 50,000 75,000

Machine hours................................................... 22,000 18,000

Direct labor hours.............................................. 40,000 40,000

Material handling (number of moves)................ 10,000 15,000

Engineering labor (hours).................................. 6,000 4,000

Setups................................................................ 40 20

Maintenance (hours used)................................. 1,500 1,000

Kilowatt hours.................................................... 16,000 14,000

Inspections......................................................... 18,000 12,000

The following overhead costs are reported:

Material handling............................................... $70,000

Maintenance...................................................... 50,000

Power................................................................. 24,000

Engineering........................................................ 60,000

Setups................................................................ 75,000

Labor-related overhead..................................... 60,000

Machine-related overhead................................. 120,000

Inspection.......................................................... 108,000

1. Using the pool rates, assign overhead costs to the two products and compute the overhead cost per unit for each. Round answers to two decimal places.

		Product X		Product Z
Unit-level activities:
Batch-level activities:
Product-level activities:
Overhead cost per unit		$		$