Homework - Problem 1 Our company produces two products: flanges and couplings. Data on the two products follows: Activities Flanges Couplings Direct Labor Hours per Unit 0.80 hours 0.40 hours Direct Labor Rate $ 15 per S 15 per hour 10,000 units hour 40,000 units Annual Production 400 setups Flanges are more complicated to manufacture and require special processing, The Company has identified the following activities related to Overhead: Activities Flanges Couplings Total Machine Setups #setups) 100 300 Special Processing (# Machine hours) 5,000 0 5,000 machine hours Other overhead (assigned on the basis 8,000 16,000 24.000 labor of #Labor hours) hours 1. Compute Overhead application rates for the two products for each of the activities listed above, assuming the costs for those activities are as appears in the following table: Activities and Costs Predetermined Overhead Rates Machine Setups $72,000 Special Processing $ 200,000 Other overhead $ 816,000 Apply Overhead to the two product lines using the Activity Based Costs computed (above) in part 3. Activities Flanges Couplings Machine Setups Special Processing Machine Hours Other overhead Total Overhead costs assigned to product / 10,000 units / 40,000 units What is the unit cost of the standard and executive products under activity based costing? Manufacturing Input Flanges Couplings Direct Material per unit $ 32 $ 18 Direct Labor $ per unit MOH per unit Total